Thailand to save US$2.93 billion in switch to ethanol
BANGKOK ~ In a major push to encourage more motorists to switch to ethanol-based auto fuel, Thailand’s cabinet has agreed to exempt import tariffs on E85 car parts as well as lowering excise taxes for E85-fuelled cars. E85 is a blend of 85 percent ethanol and 15 per cent gasoline.
The director-general of the Ministry of Finance’s Fiscal Policy Office, told reporters this week the cabinet decision would take effect before the end of this year (2008) and is part of a bigger plan for Thailand to switch into alternative fuels as a way of reducing carbon emissions and spending less on oil.
Ms Pannee Sathavarodom, said excise taxes for E85 vehicles will be lowered to equal the taxes currently levied on vehicles certified to run on E20, a blend of 80 percent gasoline and 20 percent ethanol. And the excise tax on E85 fuel will be reduced to Bt2.5 per litre from Bt3.6.
Meanwhile, the energy ministry said state-owned PTT Plc and Bang Chak Petroleum Plc have agreed to make E85 available at 30 to 50 of their service stations before the end of the year. In the longer term car manufacturers are expected to establish plants producing E85 vehicles in Thailand.
It is projected that up to 60 percent of Thailand’s motorists will switch to E85, consuming 4.4 billion litres annually and reducing the country’s gasoline bill by Bt96.7 billion (US$2.93 billion) per year. Thailand currently consumes approximately 20 million litres of gasoline and 8 million litres of E10 per day.
Many environmentalists say E85 is preferable to gasoline because it burns cleaner and can be produced locally. In Thailand the ethanol will be produced from sugar cane or cassava. However, the environmental case for biofuel collapses if farmers destroy forest in order to grow sugar-cane. Thailand faces a big challenge to ensure that the benefits of E85 are not wiped out in a new wave of deforestation.
Which cars can use E85?
Conversion kits are available in Bangkok and other major cities to make your car a flexible fuel vehicle (FFV) which can use E85, or pure gasoline. Except for a few engine and fuel system modifications, they are identical to gasoline-only models.
FFVs experience no loss in performance when operating on E85. However, since a gallon of ethanol contains less energy than a gallon of gasoline, FFVs typically get about 20-30% fewer miles per gallon when fueled with E85.
FFVs have been produced since the 1980s, and dozens of models are currently available. Since FFVs look just like gasoline-only models, you may already have an FFV and not even know it! To determine if your vehicle is an FFV, check the inside of your car’s fuel-filler door for an identification sticker or consult your owner’s manual.