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Thailand Announces $11.3 Billion 10-Year Plan to Build Sugarcane and Cassava Bioeconomy

Submitted by on January 26, 2017 – 6:46 pmNo Comment

by Jim Lane (Biofuels Digest) This week we reported from Thailand:  “The government launched its 10-year plan to build a bioeconomy hub for the region with private and public sector investment expected to reach $11.3 billion as it focuses on sugarcane and cassava to feed modern biorefineries that will produce biofuels and biochemical as well as biopharmaceuticals, “future” food and “future” feed. The first $1.44 billion phase of investment is set for 2017/18, first in the eastern province of Rayong and later into Khon Kaen.”

Whoa, there. $11 billion? Time to move to Thailand, everyone. While you’re packing, we’ll analyze the news.

The struggle for feedstock

In the past 60 days with a late start to the sugarcane season, it has less been about expanding mandates as much as scrambling for feedstock to meet the current ones.  We reported last month that In Thailand, 4 million metric tons of spoiled rice is set for use as feedstock for ethanol production to help fill the gap in supplies required to meet current blending mandates.

Meanwhile, there have been imports of cassava, and trouble with those imports. As we reported in August, Cambodia’s cassava farmers are looking at alternative cash crops like corn and soy in an effort to reduce reliance on Thailand’s manipulation of prices and markets for the crop. The country doesn’t have processing facilities for ethanol or starch, so it is exported to Thailand for further processing but since the military junta took over the country in 2014, it manipulates the prices by closing unofficial border checkpoints when it wants to reduce the prices. Cassava only fetches around 10 cents per kilo.

And E20 is the chosen direction. As we reported in March, the government is phasing out lower 10% ethanol blend fuels by 2018 and 2027, instead bringing in E20 and E85. Doing so will triple ethanol demand to more than 25 million liters per day. To boost demand for the higher ethanol blends, excise taxes will be levied on the lower blends to help counteract cheaper fossil-based fuels. All fuels except E20 and E85 include an oil fund levy that is meant to help subsidize higher biofuel prices to be more competitive at the pump.

So – even with the use of cassava for roughly 30% of the country’s biofuels feedstock needs, we can see that there’s a substantial acreage increase in the wings for Thailand with this switch to E20.

Hence, the build-up will focus not only on ethanol production capacity, but also on adding acreage. It’s all at the expense of imported oil, so good for the Thai economy and trade balance — and the blend rate of E20 is aimed at avoiding a cost crunch for drivers.

One interesting area of activity may be the question of what to do with all the sugarcane bagasse. One third of the tonnage that comes in to a refinery is bagasse. Traditionally, combusted for power — now, an opportunity for cellulosic ethanol as well as renewable chemicals that offer far higher price values. So, think opportunity.  READ MORE

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