B10 biodiesel pushed as antidote to palm oil surplus

B10 biodiesel pushed as antidote to palm oil surplus

The Thai Biodiesel Producer Association (TBPA) has called for energy policymakers to accelerate their enforcement of rules pertaining to the production and use of B10 biodiesel in a bid to absorb the current surplus of palm oil in national stocks.

Policymakers set a goal earlier for B10 to enter the local automotive market by early 2019 to replace B7.

B7 is 7% palm-based biodiesel blended with 93% diesel, but the government wants to increase the content of methyl ester made from crude palm oil to 10%.

Sanin Triyanond, chairman of TBPA, said policymakers may change their mind or feel reluctant to enforce the B10 time frame if they are concerned diesel retail prices will increase.

They enforced the usage of B5 around 2012 before B7 was made available in 2014.

Mr Sanin said B10's increased proportion of pure biodiesel can absorb another 500,000 tonnes a year of crude palm oil.

Last year, total crude palm oil output was 2.63 million tonnes, with 300,000 tonnes of surplus per year used for export. This year's surplus is expected to surpass 560,000 tonnes, higher than the usual amount of 320,000-350,000 tonnes.

He said the ramped up level of production should not cause global crude palm oil prices to fall.

Mr Sanin attributed price changes to several large importers including India that have imposed tariffs, and to Europe, which is cracking down on biodiesel usage amid concerns that it is produced by encroaching on forest areas.

He said Thailand has 13 methyl ester producers with a combined capacity of 6.7-7.0 million litres per day, but they can only use 50% of this.

Demand for pure biodiesel averaged 3.83 million litres last year.

"The TBPA forecasts it will hit 4 million litres in 2018," said Mr Sanin.

"After B10 use is enforced, demand for pure biodiesel will rise to 6 million litres, while the utilisation rate will increase to 75%."

Two methyl ester producers -- Green Global Chemical Plc and PTG Energy Plc -- will come online soon with their crude palm oil projects worth a total of 1 million to 1.5 million litres. This should take total capacity nationwide to nearly 8.5 million litres per day, he said.

Mr Sanin said an unstable policy will heap further pressure on local car assemblers, many of which may be concerned whether locally made biodiesel is suitable for use in the engines of their vehicles.

The TBPA plans to work closely with car assemblers in the country to update data and information regarding international standards for methyl ester.

The Department of Alternative Energy Development and Efficiency is field testing B10 in several kinds of vehicles over a distance of 100,000 kilometres.

The State Railway of Thailand is also testing its train operations fuelled by B10 on the 30km Ban Laem-Mae Klong route in Samut Sakhon and Samut Songkhram provinces.

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