The Energy Ministry plans to set biodiesel B10 as the fundamental diesel at petrol stations next week, alongside the current biodiesel B7.
B7 will have to comply with the Euro 5 standard soon in order to be promoted as a premium-grade diesel. B7 means 7% methyl ester from crude palm oil blended with diesel, while B10 is a 10% blend.
The moves are in line with other ministry measures to absorb a surplus of crude palm oil and tackle increasing PM2.5 particles in the air.
Energy Minister Siri Jirapongphan said the Energy Business Department plans to announce the international standards for B7 and B10 next week.
The retail price of B10 will be five baht per litre less than B7 because of lower levy collection for the state Oil Fund.
Mr Siri said while two car makers, Toyota and Isuzu, have announced their pickups, trucks and vans are now compatible with B10, the ministry will maintain B7 availability at petrol stations because some European cars are incompatible with B10.
"But in the future, the ministry will set only one grade of both diesel and petrol in the Thai market," he said.
SET-listed Bangchak Corporation Plc on Thursday launched commercial sale of biodiesel B20, available at Bangchak petrol stations nationwide.
Bangchak president Chaiwat Kovavisarach said motorists can find B20 at 174 stations.
Meanwhile, PTT Oil and Retail Business Plc has made B20 available at 33 stations nationwide, with plans to expand to 100 stations this year.
Like B10, B20 retails for five baht per litre less than B7. But the ministry will widen the price gap of B20 to seven baht per litre after B7 complies with the Euro 5 standard.
Mr Chaiwat said Bangchak is ready to comply with the ministry's policy despite higher refining costs for biodiesel with the Euro 5 standard.
Mr Siri said the higher methyl ester content in biodiesel and increased volume of crude palm oil for power generation will raise local consumption of crude palm oil to 2 million tonnes in 2019 from 1.5 million in 2018.
On Tuesday, the cabinet acknowledged a plan to buy a new block of 200,000 tonnes of crude palm oil to generate power at the Bang Pakong plant of the Electricity Generating Authority of Thailand. The first batch of 100,000 tonnes is to be bought in 15 days.