9/1/2004 THE NATION (THAILAND) - Palm growers are set to benefit from thegovernment's latest biofuel promotion scheme, which will need to buy palmoil for the production of biodiesel.

At the Biofuel Bangkok 2004 conference yesterday, Thailand signed amemorandum of understanding (MoU) with Bayer Technology Services fromGermany and ACG Group of Co (Thailand) to study the feasibility ofconstructing of a plant to produce biodiesel and palm oil by-products.

'We expect the study to take six months to complete and then the plantconstruction should require 22 months,' said Jompoj Pijitpakdeekul,president of ACG Group. The project coordinator is in discussions withKrung Thai Bank, BankThai and the Government Savings Bank for a projectloan.

This Bt2-billion project will make use of advanced technology andequipment from Bayer to process palm oil from farmers in eight southernprovinces, starting with Krabi. The daily output is estimated at100,000-300,000 litres of ester, consisting of 2-per-cent palm oil and98-per-cent diesel.

'The viability of the project depends on the minimum production cost,'Jompoj said.

The project will have its own plantation area, stretching over 10,000 rai,which is expected to reduce costs by 40 per cent. By-products such asglycerine can also be supplied to shampoo, soap and supplementary foodfactories.

Next year the government plans to force popular tourist provinces andhighly polluted provinces like Bangkok to convert to biodiesel.

'This will guarantee demand,' said ACG adviser Samai Jai-In.

The two-day Biofuel Bangkok conference witnessed progress in promotingbiofuel consumption. A total of four MoUs were signed, one involving PTTand Coimex, an ethanol producer from Brazil, in boosting ethanol demand.

'We look forward to forging a long-term plan to promote ethanolconsumption,' said Abhisit Rujikiartkamchorn, PTT senior executive vicepresident. Ethanol imports might not be possible in the short term due tothe high duties of Bt6-Bt7 per litre.

'If we import, we'll need to shoulder losses,' the executive vicepresident said.

PTT agreed with Petrobas of Brazil to cooperate in biofuel transportationand with Petron of the Philippines to cooperate in biofuel technologydevelopment.

Thailand and the Philippines will work together to set regional standardsfor biofuel from easily available crops and to lower crude-oil importbills. Both countries host assembly lines of international carmakers, andthey pledged to push auto producers to install engines modified forethanol-blended fuel.

Thailand plans to dilute automobile petrol with ethanol, as high oilprices force it to reduce dependence on energy imports costing US$10billion (Bt414 billion) a year.

The government is replacing the imported octane booster additive MTBE witha mix of 10-per-cent ethanol in petrol, called gasohol.