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Forget about an earlier plan to launch it a couple of years from now. A new timetable has been set for the third quarter.

In the initial stages, western carmakers such as General Motors, Ford and Volvo said they are ready to import completely built E85 vehicles for the local market if the government offers more tax and other incentives. Meantime, a number of service stations belonging to state owned PTT and Bangchak Petroleum would have to struggle to sell the bio-fuel made from locally made ethanol.

In E85, ethanol accounts for 85 per cent of the fuel, while petrol forms 15 per cent.

At this stage, it seems the government's latest plan for E85 appears hasty and poorly organised. It could take some time to properly address the task.

Nevertheless, E85 possesses a long term potential in Thailand, which earlier granted promotional privileges to projects that assemble E20 vehicles here.

Based on prevailing crude prices, E20 vehicles look pale in comparison to E85 models, since fuel savings will vary significantly.

In addition, the country could look forward to saving a great deal in foreign exchange since a preliminary estimate shows the import bill on fuel could be reduced by about Bt90 billion annually when E85 is widely used.

The farm sector will also benefit greatly from the rise of biofuels as molasses from the sugar industry and tapioca are main ingredients for ethanol production.

The ethanol industry is now waiting for an acceleration of demand and stronger price for its output, which is now capped at just Bt17 per litre.

Currently, most ethanol comes from molasses-based producers, while tapioca-based supplies are waiting for a better price before tapping the market.

Overall, the shift from E10, now widely used here, accounting for about half of total consumption, will be far more challenging than the previous switch from 100 per cent petrol to E10 (a 10 per cent ethanol blended petrol) as vehicles need to be replaced with specific E85 models.

In addition, thousands of service stations need to be E85-ready, while oil refineries will essentially become ethanol plants, since only 15 per cent of petrol will be used in the biofuel.

All these big changes will take time to implement, but economically they will be worth it, based on prevailing crude prices.