The Energy Ministry's decision to delay the plan to replace gasohol 91 with E20 -- a mix of 20% ethanol and 80% unleaded gasoline 95 -- is bad news for the country's efforts to combat worsening air pollution, especially PM2.5 fine dust particles.
E20 fuel is known to emit less health hazardous compounds during the combustion process -- including 24% lower levels of carbon monoxide and hydrocarbons, and 25% less PM2.5 dust while it contains 40% less benzene, a carcinogenic volatile organic compound.
The about-turn in this good energy policy was unveiled early this week by the permanent secretary of energy Kulit Sombatsiri.
He explained on Monday that the decision to delay the switch to E20 fuel was taken as biofuel ingredients have gone up in price, putting a strain on the nation's Oil Fuel Fund. This move showed the ministry places the Oil Fuel Fund's balance sheet and market prices firmly ahead of the environment.
Launched over a decade ago, E20 -- which uses ethanol from sugarcane and cassava -- was at one point seen as the energy source of the future, especially when oil prices neared US$100 (3,000 baht) a barrel.
But as of Feb 12, ethanol derived from sugarcane and cassava roots cost 24.83 baht a litre, compared to gasohol 95, which cost 13.83 baht a litre. Methyl esters, which are made from palm oil, cost 42.83 baht a litre, compared to 15.5 baht a litre for high-speed diesel fuels.
The increasing price of biofuels, therefore, effectively shut down the government's ambitious plan to make E20 Thailand's primary fuel by this year.
But instead of putting the plan on hold indefinitely, the Energy Ministry could -- and should -- adjust its policy, in addition to setting an exact time frame to prove its commitment. In order to reduce the burden on the Oil Fuel Fund, the ministry must work closely with the Ministry of Agriculture and Cooperatives, as well as farmers' associations in the provinces to secure adequate supplies of biofuel crops at fair prices.
Deeper cooperation to ensure adequate supplies are urgently needed, as to date state agencies seem to be working in a silo. The Agriculture Ministry, for instance, is urging farmers to grow popular cash crops, without considering the need for biofuel materials.
Such a mismatched approached is the result of a mismanagement of the sector's resources.
For instance, when palm oil prices plunged due to oversupply in 2019, the state ordered power plants managed by the Electricity Generating Authority of Thailand to switch to palm oil as a fuel.
As a result, the price of palm oil -- a key ingredient in the production of methyl esters and biodiesels -- surged tremendously.
At the same time, there is currently not enough molasses from sugarcane -- which is needed to produce biofuels -- to produce E20 petrol economically, as large amounts of sugarcane are being diverted for the production of alcohol-based hand sanitisers amid the Covid-19 pandemic.
This is unfortunate, as the availability of E20 and other biofuels should not depend on demand for other products, especially given the higher benefits the fuels offer, in terms of human health and the environment.
The Energy Ministry has been praised for using the Oil Fuel Fund to help solve environmental problems and improve the quality of petrol. Such a legacy should not be abandoned only to maintain the Oil Fuel Fund's balance sheet. The government must remember that delaying the rollout of biofuels like E20 will end up costing more, due to pollution and declining public health.