ENERGY, AGRICULTURE EXPERTS WARN ON BIOFUELS PLAN

       Plenty of proposals were floated at last week's "Alternative Energy Development" roundtable, alogn with a warning to the government that unless it tackled the issues raised, Thailand's ambitious goals for the biofuels industry would not be achieved.
       Most of the proposals were centred on overcoming obstacles to increasing production of the biofuelsethanol and biodiese-obstacles that persist despite an abundant supply of raw materials.
       On ethanol, Anusorn Sangnimnuan, president of Bangchak Petroleum, said it remians unclear how Thailand will be able to boost domestic ethanol consumption to 9 million litres per day by 2022, based on the current petrol consumption of 20 million litres a day. Doing so, he said, would require an ethanol content of more than 20 per cent. Though farmers would be pleased, oil retailers with their wn refineries would be discouraged by the drop in demand for refined oil. To express their unhappiness with such a situation, they could shelve a plan to increase the number of petrol stations that sell high-ethanol-content products, he said.
       "E85 should be just an option, while E10 and E20 should be core products. In that case, about 4 million litres would be exported, potentially to japan, South Korea and China. But Thailand will need to do more marketing to persuade them to mix ethanol with their oil products, probably through joint investment in Thailand," he said, He also suggsted the Energy Ministry set a timetable for when it will abolish the sale of 91-and 95-octane petrol.
       Citing the construction of an increasing number of tapioca-based ethanol plants, Anusorn voiced concern over pricing, as tapioca costs less than molasses-an alternation. He said it would be unfair if ethanol produced from both sources quoted a similar price.
       On the subject of Thailand's goal of becoming an ethanol hub, Anusorn pointed out that ethanol export prices are now set by traders in Singapore. If they retain this role, Thailand would simply be a producer and reap no benefits from pricing, he said.
       Anusorn also urged an amendment to the oil trading law, which currently bars retailers from exporting ethanol producers to export the product themselves, he said, as they do not have their own ports and tanks, as some retailers do.
       "If we're to be the hub, we must have our own technology, while personnel must be improved. If we are good, we can export our expertise to help our neighbours," he said.
       On biodiesel, Anusorn suggested the level of biodiesel conten in diesel be raised in line with any additional palm-oil supply, to assure farmers of income. As the country's palm plantation area is to be increased by 500,000 rai per year from 2008 to 2012 the planned compulsory ratio of 5-per-cent biodiesel could be moved forward from 2012, he said.
       As plam-oil suuply is below expectations, he suggested establishing a minumum price in the initial period to encourage the establishment of more plantations.
       Apichart Jongsakul, director-general of the Office of Agricultural Economics, urged the government to look closely at the value chain of palm oil. While tapioca starch can be used in the manufacturing of citric acid, and palm sterine-ther "hard" part of palm oil-can be used in cosmetics and weapon manufactruing, if such manufactruing activities occur it would increase demand for palm oil. This would benefit farmers more than a price guarantee, he said.
       Wiwan Boonyaprateeprat, secretary-general of the Thai Oil Palm and Palm Oil Association, said palm growers are concerned about the coming free trade within Asean, which would allow imports and dampen domestic prices. As 90 per cent of Thai growers ar small operators, she said their plantation costs are higher than those of their counterparts in Malaysia.
       She also expressed concern over price volatility resulting from high concentrations of palm-oil factories in some areas. Running at half capacity, the prowers. Some farmers were encouraged by the high price and cut their young palm kernels early. Low yields then pushed down the price sharply. When factoreis have to source palms from other provinces, they see an increase in operating costly than imports.
       "A zoning system should be in place. A factory must be located in a designated area within which supply can be channelled directly to it," Wiwan said. Apichart noted that Thailand has the potential to become an ethanol hub, as Thailand is the world's largest tapioca exporter, though not the country with the largest output.
       Thailand also has a significant share of the global sgar market.