Thailand has delayed its E20 fuel blend target for another year.
Its cane and cassava production are currently too low to hit the target.
It’s also not yet able to manufacture enough E20-friendly vehicles for the fuel type to be adopted on a wide scale.

Thailand’s E20 Fuel Blend Target

In 2018, the Thai Government developed its ‘Alternative Energy Development Plan (2018-37)’, often referred to as ‘AEDP 2018’.
Through this, it hopes renewable energy will account for 30% of Thailand’s total energy consumption by 2037.
To help make this happen, Thailand has vowed to increase the amount of ethanol its blends with gasoline.
It currently has a 10% blend rate (90% gasoline, 10% ethanol) and wanted to increase this to 20% in July this year.
However, this was postponed to next year as ethanol prices soared to a five-year high on the back of higher feedstock prices (notably cassava and molasses).

At this level, it’s tough for the Government to incentive the switch over to E20 fuels.

How Achievable is the Government’s E20 Goal?

The Government has a lot of work to do if it wants to hit its E20 target.
It first wants to increase the amount of cane and cassava it produces, as both crops can be used to produce ethanol.
As it stands, Thailand produces around 99.7m tonnes of cane per year, and 29.1m tonnes of cassava.
However, it needs to be producing at least 182m tonnes of cane and 59.5m tonnes of cassava to hit its E20 target.

To increase its production of both, the Government hopes to enhance the performance of Thailand’s agricultural machinery and invest more heavily in the technology that’s used to make ethanol.
This is because there’s little room for Thailand to expand cane and cassava area, so it must instead focus on increasing agricultural yields.
Thailand’s currently dabbling with urban and vertical farming, but cane and cassava are not the most compatible here as they are “cash crops”, meaning they can’t yet be vertically grown on a large enough scale to turn a profit.

This is interesting because, in theory, the Government could instead reduce the amount of sugar and cassava products it exports, either by increasing the ethanol price or taxing exports.
As it stands, Thailand exports around 4m tonnes of raw sugar each year, along with 5.3m tonnes of cassava chips.

Beyond this, Thailand must also increase its ethanol production capacity.
Thailand has just 27 mills with the capacity to produce ethanol at present, which collectively make 6.3m litres of ethanol a day.
To successfully roll out E20 fuel across the country, they must produce 7.2m litres a day in 2026 and 7.5m litres a day in 2037.

This is because Thailand could be consuming 14.5b litres of gasoline a year by 2037, up from 2.2b litres today.

It therefore needs a lot more of the two major feedstocks (molasses and cassava), and more mills capable of producing ethanol.
Other potential feedstocks, such as barley, sorghum and potato do exist in Thailand, but aren’t grown on a large enough scale to make be widely used at this point.
The mills are also unable to freely change the feedstocks used in their production processes.

If Thailand does hit its target, there are still obstacles to overcome.
It’ll need to increase the number of gas stations that can supply E20 across the country; 60% of Thailand’s gas stations currently supply E20 fuel.
It must then convince the people of Thailand to use the E20 blend.
At the end of 2020, Thailand had 41.5m vehicles registered on the road; it’s likely most of these vehicles were running on E10.

So, using E20 fuel on a wide scale means vehicle technologies must be developed so they’re compatible with higher concentrations of ethanol; generally, cars that were manufactured in or before 1986 are incompatible with E10 fuels.
These developments will cost money, for both the Government and drivers in Thailand, especially if they have to buy new vehicles.
It’ll therefore need to develop and promote tax and financial incentives.

We think it’s unlikely Thailand will be able to increase its cane and cassava production by 152% growth by 2026.
This is purely because, in the recent past, we’ve seen Thailand suffer enormous crop losses due to flooding and drought, both of which are unpredictable and difficult to manage.