Ministry's B20 plan to end surplus issue

Ministry's B20 plan to end surplus issue

New biodiesel to be available nationwide

Energy Minister Siri Jirapongphan attends an exhibition at Egat's head office in Bang Kruai, Nonthaburi.
Energy Minister Siri Jirapongphan attends an exhibition at Egat's head office in Bang Kruai, Nonthaburi.

The Energy Ministry has set a new goal to make biodiesel B20 available nationwide to tackle the persistent surplus of crude palm oil.

B20 is a blend of 80% diesel and 20% methyl ester content from crude palm oil. The current formulation is 7% crude palm oil for biodiesel B7.

In 2019, crude palm oil output is expected to reach 2.5 million tonnes, but 2 million is the normal annual output. The 500,000-tonne surplus will need to be absorbed by other sectors.

Energy Minister Siri Jirapongphan said policymakers will set long-term measures to mitigate the surplus output that takes place every year.

"The widespread use of B20 should be started in the next couple of years and motorists can refill B20 at every petrol station," Mr Siri said. "Diesel-powered pickups should be B20-compatible in the coming years."

Last year was the first time the ministry announced commercial sale of B20, but viability was limited to diesel-powered buses and trucks.

B20 has been available for fleet operators of trucks and buses as well as boats.

Two companies, PTT Plc and Bangchak Corporation Plc, have agreed to distribute B20 at their petrol stations.

Other traders such as Susco Plc and PTG Energy Plc are expected to follow with B20 distribution in the next few months.

The first year of commercial sales will be voluntary for buses and trucks, while pickups should be able to refill using B20 in the near future.

Mr Siri said the ministry will team up with several oil traders and vehicle assemblers to create field tests for B20 in pickups, which is the next step.

"Once B20 can be distributed nationwide, demand for crude palm oil will rise by another 600,000 tonnes per year and the surplus will be depleted," he said.

Mr Siri said purified biodiesel or B100 is part of the longer term plan.

Another measure to absorb the surplus is to use crude palm oil for power generation, set at 160,000 tonnes.

With this volume, the surplus in stock will decline from 360,000 tonnes to 200,000 tonnes, the normal monthly level.

Mr Siri said this measure will not impact the power tariff.

"This amount for power generation should soon push up the price of fresh palm to a range of 3.1-3.25 baht per kilogramme from 2 baht now," he said.

In related news, the state-run Electricity Generating Authority of Thailand (Egat) signed purchase contracts yesterday with 22 crude palm oil millers for a combined 83,000 tonnes at a price of 18 baht per kg. Egat plans to purchase another 22,000 tonnes in the second contract and 55,000 tonnes in the third. The agency has allocated a budget to purchase crude palm oil of 2.88 billion baht.

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