The Energy Ministry plans to make biodiesel B10 available at 340 petrol stations this year to increase consumption of crude palm oil in the country's transport sector.
Crude palm oil is used in a chemical reaction to make methyl ester, which is a key component of biodiesel. B7, which is pure diesel blended with 7% methyl ester, is now available at all petrol stations nationwide.
The ministry plans to add the B10 category and select the pilot location in the southern region today.
PTT Oil and Retail Business Plc (PTTOR) is the first company to join the scheme.
The increase in methyl ester content is meant to absorb the surplus of crude palm oil facing the country.
Energy Minister Siri Jirapongphan said 12 crude palm oil producers will pass certification by the Japan Automobile Manufacturers Association in the next 18 months.
B10 is compatible with pickups made by Toyota and Isuzu, the two Japanese brands that control more than a 60% market share in the pickup segment.
GM has announced that its current pickup is also compatible with B10.
"There are 11 brands distributing some 930 models of pickups, trucks and buses that are B10-compatible," Mr Siri said.
Luxury cars from European companies are not biodiesel-compatible yet, but they can refuel with premium diesel, he said.
"B10 is cheaper than B7 by another one baht per litre, thanks to a discount on excise tax and a subsidy from the state Oil Fund," Mr Siri said.
The ministry has sought cooperation from other retail fuel companies such as Bangchak Corporation Plc, PTG Energy Plc and Susco Plc on expansion of B10 at their stations.
Thailand produces 67 million litres a day of diesel, while production of B10 stands at 9 million litres a day.
Jiraporn Khaosawas, PTTOR's chief executive and managing director, said the company plans to expand B10 distribution to the central and eastern regions soon.
Moreover, PTTOR has made B20 available at 33 stations nationwide, with plans to expand to 100 stations this year.
Chansin Treenuchagron, president and chief executive of PTT Plc, the parent firm of PTTOR, said the group is cooperating with the state to promote all biodiesel types to support palm oil producers and farmers.
PTT has 238 petrol stations in southern provinces and 1,700 nationwide.