Thailand will make 3 per cent biodiesel content in diesel compulsory within 45 days from now, in line with the plan to make 5 per cent compulsory next year.
After chairing a National Energy Policy Office (NEPO) meeting, Energy Minister Wannarat Charnnukul said the mixed diesel, so-called B3, will be compulsory given the abundant supply of palm biodiesel output. Under the 15-year alternative energy development plan (2008-2022), diesel with 5 per cent biodiesel content will be common fuel. At present, the content is only 2 per cent.
The NEPO approved the B3 formula as the output of oil palm, the main raw material for biodiesel production, is sufficient.
Wannarat noted that late this year there will be another estimate to determine if output will be sufficient to raise the compulsory content to 5 per cent next year.
The ministry will also narrow the differential between B3 and B5 prices, to signal that B5 will be the only common diesel product soon and then it would no longer enjoy the Oil Fund's subsidy. In the initial stage, the B5 contribution to the Oil Fund will be cut by 30 satang per litre, to cut the differential from Bt1.20 per litre to Bt0.90.
NEPO yesterday also reviewed the biodiesel (B100) pricing formula, to better reflect the raw material prices - or the actual production cost - for fairness to producers and consumers. There has been criticism that few investors want to invest in biodiesel production, due to the current formula, which is based solely on the crude palm oil price. The new formula will based on three raw materials: crude palm oil price, refined bleached deodorised palm, and palm sterene.
