Energy conglomerate Bangchak Corporation Plc is preparing to sell sustainable aviation fuel (SAF), accounting for 60% of its production capacity, from its factory in Bangkok, which is scheduled to open in the second quarter.
Though aviation business operators in some countries may postpone SAF usage, the company's plan to sell this biofuel for aircraft is on schedule, said Chaiwat Kovavisarach, chief executive of Bangchak Group and president of Bangchak Corporation.
The construction of an SAF factory, with daily production capacity of 1 million litres, near Bangchak's oil refinery in Phra Khanong district is now 93% complete. The facility uses used cooking oil as a raw material.
The aviation industry is promoting SAF because this type of fuel produces up to 80% fewer greenhouse gas emissions than conventional jet fuel, according to media reports citing various forecasts.
Bangchak has so far signed agreements to sell 60% of its SAF with two companies, said Mr Chaiwat.
It will sell certified used cooking oil-derived SAF to Singapore-based Shell International Eastern Trading.
Bangchak also signed a memorandum of understanding (MoU) with Japan's Cosmo Oil which agreed to procure 300,000 kilolitres of SAF a year by 2030.
Under the MoU, the two companies will also jointly conduct a study on ways to reduce carbon dioxide emissions, including the use of products made by Bangchak, such as SAF, bioethanol and bionaphtha.
A feedstock for the petrochemical industry, naphtha is usually derived from crude oil, but some renewable sources such as used cooking oil can be also used to make bionaphtha.
Bangchak and Cosmo Oil also plan to study the utilisation and transportation of low-carbon hydrogen, which is made specifically to cut greenhouse gas emissions.
According to Mr Chaiwat, Bangchak is allocating 50 billion baht this year to support its investment projects.
Up to 20 billion baht is to be spent for the company's natural resource business, notably its petroleum drilling, along with an investment in a potash mine in Nakhon Ratchasima.
Another portion of 20 billion baht goes to Bangchak's green power business, including a wind farm in Vietnam.
The remaining budget is to be used for other businesses, including oil refinery and trading and bio-based business.
The company plans to build 100 new petrol stations this year, adding to almost 2,200 stations countrywide at present, with an aim to increase its market share to 30%, up from 28.9% in 2024.