Since the late 1970s, Thailand has recognised the need for a domestically produced transport fuel. Seeking to reduce reliance on imported fossil fuels, the government turned to ethanol, a renewable biofuel derived primarily from crops.
Ethanol production takes two forms: first-generation ethanol, made from crops such as corn, sugar cane, cassava and molasses; and second-generation ethanol, which uses agricultural residues, wood and grasses.
A major milestone came in 2003, with the launch of the National Ethanol Program and the Gasohol Strategic Plan.
Yet, for much of the past two decades, significant breakthroughs in cassava-based ethanol production were lacking, especially compared to the relatively simpler molasses and sugar cane processes. A major industry advancement occurred in 2024, however, with the yield-boosting adoption of genetically modified (GM) yeast and advanced cellulase enzymes. These technologies, well-established in corn-based ethanol production, are now being adopted for cassava. Recent trials confirm their effectiveness in maximising ethanol extraction, paving the way for higher efficiency and lower production costs.
Beyond energy security, ethanol is a key tool of Thailand’s strategy to cut greenhouse gas emissions in the transport sector. Studies indicate ethanol reduces carbon dioxide emissions by about 40% compared to petrol, making it an attractive option for decarbonising economies.
Following the Thai government’s recent decision to extend its biofuels mandate by two years, to 2026, demand for E20 fuel (20% ethanol, 80% petrol) and E85 (85% ethanol, 15% petrol) is expected to rise.
With biofuels at the centre of Thailand’s energy transition, ethanol will be key in meeting national commitments to achieve carbon neutrality by 2050, and net-zero emissions by 2065.
Optimising ethanol production
Molasses and cassava are Thailand’s primary ethanol feedstocks. Consumption hit 3.3 million and 2.7 million metric tonnes respectively in 2023. The country has consistently produced over 1 billion litres of ethanol annually for the past decade, but producers are increasingly seeking ways to maximise efficiency and sustainability.
New GM yeast strains and advanced cellulase enzymes represent a significant leap forward. GM yeast strains offer greater stress tolerance against organic acids and temperature fluctuations, while also accelerating the fermentation processes that produce ethanol. Combined, these innovations can boost ethanol yields. Additionally, advanced cellulase enzymes help break down complex, fibre-bound starch molecules, which makes the feedstock-to-ethanol conversion process more efficient.
Industry sources suggest these new technologies could increase ethanol production by up to 10% compared to conventional methods, offering producers a clear competitive advantage.
Nonetheless, fuel ethanol consumption during 2020-2021 was severely impacted by Covid-19. It recovered in 2022, but declined again in 2023, mainly due to the Thai government reducing the price subsidy for E85 fuel. This led to a significant drop in E85 consumption, and limited availability of feedstocks, like molasses and cassava. Furthermore, new electric vehicle (EV) registrations in 2023 were about five times higher than in 2022, representing direct and significant competition to the biofuels market. Together, these factors reduced gasohol demand and, consequently, Thailand’s ethanol consumption in 2023.
Ethanol as a complement to EVs
Thailand is expanding its EV industry as part of its transition to a low-carbon economy. While some argue ethanol will become obsolete as EV adoption grows, the reality is more complex.
EVs offer greater environmental benefits when powered by renewable energy, but in Thailand, around 80% of electricity in 2022 was generated with fossil fuels. Another major issue is affordability. Despite government incentives, high upfront costs put EVs out of reach for many people. Finally, charging stations remain scarce, particularly in rural areas, posing challenges for long-distance travel. There are plans to grow the charging network, but it will take time.
Given these issues, ethanol should not be overlooked in Thailand’s energy transition. Instead, it should be seen as a complementary solution that supports immediate decarbonisation while the EV sector continues to develop.
Opportunities for expansion
With the right investments, Thailand could leverage its expertise in ethanol production to enter the sustainable aviation fuel (SAF) market. This is a key target of Thailand’s 2024 Alternative Energy Development Plan (AEDP). Such a move would also help to maximise the use of existing ethanol plants: Thailand’s ethanol plants have a combined production capacity of approximately 2,000 million litres per year, but 2023 production only reached approximately two-thirds of this.
Aviation faces a growing SAF mandate, which will rise from a 1% blend requirement by 2026, to 8% by 2036. This creates a pressing need for increased production, and thus a stable supply of sustainable feedstocks. Currently, Thailand mainly relies on used cooking oil (UCO) for SAF, but as blend rates rise, so too will demand, which is expected to surpass available SAF supplies. While importing UCO is possible, it is not a sustainable long-term solution.
To meet this challenge, Thailand could explore ethanol-based aviation fuel through the alcohol-to-jet (AtJ) process. This technology has already been demonstrated by firms including Gevo and LanzaJet. While these companies have demonstrated both the economic and technical feasibility of AtJ, it has not yet been widely scaled for commercial production.
By contrast, UCO-to-SAF conversion is already well established and commercially proven. It is arguably the preferred starting point for SAF production in Thailand. However, scaling up AtJ could strengthen the country’s ethanol sector, positioning it as a leader in global efforts to decarbonise transportation.
