Nov 17 3:26 PM - Net oil importer Thailand plans to expand oil palmplantations six-fold by 2008 to use the oil to mix with diesel, reducingits import bill and boosting farmer incomes, Energy Minister PromminLertsuridej said yesterday.

The ministry was finalising its standard formula for biodiesel dieseldiluted with palm oil to be launched as early as next year, Prommin said.

The Ministry of Agriculture was finalising plans to add four million acresof oil palm plantations to the current 750,000 acres this year to meet thenew demand, according to Prommin and the ministry’s Web site.

Experts say diesel can be diluted with at least 10 percent of palm oilwith no modification of engines, but right now we are thinking of usingonly 10 percent of palm oil, Prommin said.

Motorists and factories burned about 50 million litres of diesel a day, soThailand would need five million litres of palm oil a day to makebiodiesel, Prommin said.

Each 0.4 acres of palm plantation gives a litre of palm oil a day,extracted from the yellow fruit, so Thailand needed four million acres ofpalm plantations for the biofuel, Prommin said.

Palm is grown abundantly in countries near the equator such as Malaysia,Indonesia, Thailand, Colombia and Nigeria. The oil is used mostly forcooking or making margarine and cosmetics.

Under the expansion scheme, the government planned to spend 130 billionbaht on palm plantations and 30 refineries to be built near them, Promminsaid.

The Ministry of Energy will not force motorists to switch to biodieselright away, but would use state-owned oil firms like PTT Plc and BangchakPetroleum Plc to sell biodiesel cheaper than regular diesel, Prommin said.

We will resort to the same strategy as we’ve done with gasohol, Promminsaid referring to alcohol-blended gasoline, attracting motorists with acheaper product to start with.

It is cheaper because it carries lower taxes, said Prommin. –Reuters