Thailand capable of industrial-grade ethanol production to cut import: FTI

The suggestion came after the FTI discovered Thailand's vast potential for ethanol production through sugar cane and tapioca fermentation, transforming the country into a major ethanol hub.

Citing reduced consumption of sweets these days due to healthy trends of people, which has reduced the demand for edible sugar, he pointed out that allowing Thai sugar manufacturers to produce industrial-grade ethanol would help them survive while increasing the value of sugar cane as well as tapioca – two of Thailand's key economic crops.

He said this unlocking would help Thailand achieve its ambitious goal of becoming a leading green economy, using the Bio-Circular-Green (BCG) model.

The BCG model, officially introduced by the government at the Asia Pacific Economic Cooperation Summit in 2022, provides a roadmap and guidelines for Thailand to achieve its carbon neutrality target while also driving the kingdom towards sustainable growth and prosperity.

"Ethanol can be used for more than just gasohol or E20 – the green fuel of vehicles. Industrial-grade ethanol is commonly used in a variety of industries, including pharmaceuticals, cosmetics, and cleaning products," Isares said. "Currently, we import ethanol worth more than 4 billion baht per year for use in our industries. Would it not be better if we could manufacture it at home, as we already have the capacity to mass produce ethanol, and switch from being a major importer to a key exporter?" Isares said.

Seksan Phrommanich, vice chairman of the FTI Renewable Energy Industry Club, pointed out that imported industrial-grade ethanol costs around 55-60 baht per litre. In contrast, domestic ethanol would cost only around 40 baht.

Unfortunately, some regulations prevent Thai fuel ethanol manufacturers from producing industrial-grade ethanol, which is considered pure alcohol.

"Ethanol is classified as a type of alcohol." As a result, the producer must be licensed under Excise Act BE 2493, which governs all types of alcoholic beverages in the kingdom, including import, production, distribution, and export. Meanwhile, Thailand's Excise Department only allows the state enterprise to produce pure grade alcohol, such as industrial-grade ethanol," he said, citing the main barriers to industrial-grade production in Thailand.

Only the Liquor Distillery Organisation, the Excise Department, is allowed to produce industrial-grade ethanol. As a result, there is not enough supplies to meet demand within the country, making it necessary to import.

Seksan said that during the Covid-19 pandemic, some 27 Thai fuel ethanol manufacturers had upgraded their production to produce pure ethanol for hygiene and cleaning.

"They are now ready to produce massive industrial-grade ethanol, but they cannot due to some regulations," he said. Unlocking domestic production would help increase the value of Thai tapioca and sugar cane by more than 174 billion baht, he added.

Furthermore, he said that officially promoting ethanol liberalisation would increase development opportunities throughout the Thai ethanol industry's value chain.

Ketmanee Lertkitcha, CEO of KOP International, and a member of the FTI executive board on industrial grade ethanol development, agreed with Seksan that the Thai government should amend some outdated regulations to facilitate business operations.

Noting that Thailand requires 76.37 million litres of ethanol per year as raw material for the production of pharmaceuticals, extracted herbs, supplements, cosmetics, medical equipment, and hygiene cleaning products, she emphasised the importance of the ease of doing business for ethanol production.

"Many fuel-grade ethanol plants are currently capable of producing premium industrial grade ethanol to meet market demand, which could rapidly substitute imported products. The FTI now foresees a long-term increase in ethanol demand. If this trend continues, our entrepreneurs should not rely solely on ethanol imports, as it would be detrimental to business in terms of cost control and competition," she said.