Published on June 24, 2005

Expert says state assistance is crucial

The government will have to spend Bt2.5 billion to set up a biodiesel plant, start contract plantations and subsidise biodiesel prices by 20-25 satang per litre if it wants to push ahead with its alternative fuel project, an expert said yesterday.

Jompoj Pijitpakdeekul, managing director of ASG Corp Group, said the biodiesel project would only be feasible if it receives government support for plantations to grow raw materials for the plant as well government assistance to build the factory.

ASG has signed a preliminary agreement with Bangchak Petroleum and TMB Bank to study if the biodiesel project can meet commercial needs. The feasibility study will take three to five months.

The biodiesel plan is one of many efforts to reduce demand for crude oil, the rising price of which has caused the economy to stumble.

The government could help by providing Bt2.5 billion in seed capital, which would be used to pay for contract farming as well as the plant.

The biodiesel plant, with a capacity of 300,000 litres a day, would initially cost Bt1.5 billion to build. The raw materials it could use include vegetable oil, animal oil, palm oil or black soap oil.

Jompoj said black soap trees would be the main source because they take only 18 months to grow, while palm trees normally take four years.

Black soap orchards can yield 300 litres of oil per rai per year, so 300,000 rai would need to be planted.

Over the next seven years, 8.5 million litres of biodiesel could be sold every day in lieu of diesel.

But Thibodee Harnprasert, president of Nawaporn Transport Co, said the government’s target for biodiesel was too ambitious.

“The plantation programme is not yet clear, not to mention the variety of the plants. Whether the project is commercially feasible or not is another question. We need a good feasibility study,” he said.

Watcharapong Thongrung

The Nation

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