Delegates from China, Japan, Brazil, South Korea, Germany and ASEAN member nations met in Bangkok on August 30-31 for a conference on biofuels, an industry which seeks to derive fuel sources from renewable natural resources. Their goal was to coordinate research and expertise toward identifying and developing alternative fuel sources, a timely response to rising global oil costs. Participating nations agreed to exchange information, to discuss policy advocacy measures, and to identify business opportunities available in the biofuels industry. World experts have identified gasahol and ethanol, both derived from agricultural byproducts, as having significant potential for boosting developing economies by reducing fuel import dependency and creating new local industries.

Biofuel: A Natural Solution to Rising Oil Costs (October 2004)

At the opening of the international conference Biofuels:Challenges for Asian Future, Prime Minister Thaksin Shinawatra said, It is crucial for us to find supplementary sources of alternative energy to replace our over-dependence on oil and use existing technological know- how to transform our agricultural produce into energy.

With record high oil prices sending fuel costs skyward and world stock markets plunging, Thailand is turning to its most abundant resource, its farmland, for potentially highly profitable production of fuel alternatives.

Biofuels, derived from sources such as sugarcane, cassava, and palm oil, have become a new growth industry in countries endowed with agricultural surpluses. As one of only five major net food exporters in the world, Thailand is in an extremely competitive position to become a regional biofuels production base.

Since 2002, seven manufacturers of ethanol the most widely-used biofuel worldwide have been approved for production in Thailand by the National Ethanol Committee. A daily production capacity of 1.5 million liters yields an annual export value of US$24 million. The government has further strengthened the industry by establishing the Department of Alternative Energy Development, which plans to build a biodiesel plant in Chiang Mai. In another forward-looking measure, US$50 million has been budgeted for palm oil cultivation in the nation's southern provinces, an area recently designated a BOI special investment zone.

Market potential in Asia is high, with 90% of Thailand's current ethanol exports going to Japan, the world's largest importer of ethanol and second largest consumer of gasoline. Supplying this growing demand means higher value-added for the agro-industry. In a recent address, Energy Minister Prommin Lertsuridej noted that biofuels production is ?instrumental for raising agricultural commodity prices and incomes of farmers, hence helping combat poverty and promoting greater development in rural communities.

The government is offering direct support, including BOI's maximum privileges of duty-free imports and an 8-year corporate income tax exemption. The Thai biofuels industry hopes that it can follow Brazil, the world's leading ethanol producer, and move its agro-industry further up the value chain. Last month the two nations signed a memorandum of understanding (MOU) to exchange biofuels information and expertise.

?Brazil is interested in investing in ethanol production in Thailand as it sees Thailand as [a gateway] to countries in the Asian region, such as China, Korea and ASEAN, Thailand's Energy Ministry reported.

With many cars already equipped to run on gasohol (gasoline-ethanol blends), it seems that the 21st-century Thai farmer now has a twofold mission: feeding and fueling the world.

- by Cody Griggers