Energy permanent secretary Pornchai Rujiprapha yesterday said an integrated strategy was necessary after learning that the area of oil-palm plantation was expanding more slowly than expected, resulting in fewer raw materials for palm-oil-based biodiesel production.

A source from a subcommittee on alternative-plant plantations noted that Energy Minister Piyasvasti Amranand had ordered all relevant agencies to work on the strategy, the focus of which will be plantations and biodiesel production. Once ready, the strategy will be submitted for NEPC and Cabinet approval.

"We cannot wait, because plantation area has not expanded. It takes three or four years after planting for a palm to yield oil," he noted.

The source said that under the 2005 strategic biodiesel-development plan, total plantation area was supposed to cover 720,000 rai last year. However, the actual area today is only 300,000 rai. He blamed strict lending requirements by the Bank for Agriculture and Agricultural Cooperatives for farmers not wanting to join the programme. The farmers are charged interest at the same minimum retail rate that other retail borrowers are charged.

"The Energy Ministry is of the opinion that more incentives should be available to promote palm-oil production. Money could come from the Oil Fund, or a biodiesel fund could be set up to promote the investment. We're discussing this in detail," the source said.

Biodiesel demand is expected to be a million litres a day, or 300,000 tonnes of crude palm oil a year, from next April 1, when diesel at all service stations will be required to consist of 2 per cent biodiesel.