The government's target for alternative fuels replacing fossil fuels in the country's energy mix is unlikely to be achieved, says the Federation of Thai Industries (FTI).
Phichai Tinsuntisuk, chairman of the FTI's alternative energy industry club, said the aim of increasing demand for alternative fuels to 40 million litres a day by 2021, up from 5 million litres now, is "too challenging".
Thailand consumes 90 million litres per day off all fuels, with biofuels accounting for 5.5%.
The government wants alternative fuels to account for 44% of consumption by 2021.
It has set a daily target of 9 million litres for ethanol (2.2 million now), 6 million litres of biodiesel (2.8 million now) and 25 million litres of new alternative fuels ( zero now).
Mr Phichai expects the combined consumption of ethanol and biodiesel will be a maximum of 20 million litres or 22.2% of total demand in 2021.
Ethanol use in petrol is projected to reach 10 million litres due to the launch of E85 fuel. Major car makers in Thailand such as Toyota, Honda, Mitsubishi and Volvo have introduced cars that are compatible with E85, he said.
Ethanol could replace half of conventional petrol in the next three years at 10 million litres a day, while biodiesel is targeted at 10 million litres or 20% of current diesel use of 50 million.
New alternative fuels including jatropha, algae, fatty acid ethyl esters, biohydrogenated diesel (BHD), biomass to liquids and bioethanol for buses (ED95) will be introduced.
ED95, a blend of 95% ethanol with 5% additives, is considered commercially viable as the fuel is available in Sweden and a demonstration project has been launched in Thailand.
Sweden's Scania, a leader in ED95 technology, has cooperated with PTT Plc, the National Science and Technology Development Agency and the King Mongkut University of Technology Thonburi on ED95 since last April.
"This is another alternative fuel that could be viable and appropriate for Thailand due to the abundance of sugar and cassava," said Mr Phichai.
Algae, BHD and jatropha may take more than a decade for research and development, he said.
Mr Phichai said the club will join the Renewable Energy Asia 2013 exhibition from June 5-8 at Bangkok International Trade and Exhibition Centre, where 300 energy firms from 30 countries will participate.