Energy conglomerate Bangchak Corporation believes its plan to produce biofuel for aircraft -- known as sustainable aviation fuel (SAF) -- will be able to deal with any uncertainty in the future if the company's oil refinery business is disrupted by electric vehicles.
More widespread use of eco-friendly cars, which are being promoted by governments as part of the campaign to reduce carbon dioxide emissions, may affect the manufacturers of internal combustion engine-based cars and oil sellers.
Analysts have suggested oil refinery operators diversify into petrochemicals, but from Bangchak's perspective, its plan to venture into the SAF business will provide a promising source of future revenue.
The company is developing a 10-billion-baht SAF production facility adjacent to its oil refinery in Bangkok's Phra Khanong district, said Chaiwat Kovavisarach, president and chief executive of Bangchak.
Construction of Thailand's first SAF production plant is expected to be completed before the end of 2024.
The factory, with a production capacity of 1 million litres a day, is scheduled to commence commercial operations in 2025.
The SAF business is one of Bangchak's various environmental, social and governance (ESG) projects, which are expected to help the company achieve carbon neutrality, a balance between carbon dioxide emissions and absorption, by 2030.
SAF can replace jet fuel because its properties are similar to those of conventional jet fuel, while it has a smaller carbon footprint.
This type of biofuel, which can be made from used cooking oil and agricultural waste, produces up to 80% less greenhouse gas emissions than conventional jet fuel, according to media reports citing various forecasts.
If SAF is used in the Thai aviation business, carbon dioxide emissions from the industry will be cut by 80,000 tonnes a year.
Mr Chaiwat said Bangchak will use used cooking oil as a feedstock for producing SAF under a campaign dubbed "Fried to Fly".
This campaign not only helps ensure that the company has a sufficient supply of raw materials, but will also encourage the public to refrain from polluting the environment through improper disposal of used cooking oil or by repeatedly reusing it.
When repeatedly reused, cooking oil undergoes a chemical reaction that results in the production of harmful substances that can lead to adverse health effects.
Under the campaign, people are able to sell their used cooking oil to the company for 20-23 baht a litre at designated Bangchak service stations.
Mr Chaiwat is aware that alternative fuels such as hydrogen can also be used to replace oil in the transport sector and the usage of such alternative fuels may increase between the 2050s and 2060s if it is proven to be technically feasible and commercially viable.
However, in the global aviation sector it will take time for hydrogen to be widely used as a fuel as its cost is 6-10 times higher than jet fuel.
Many countries and international organisations have shown their support for SAF usage. The US offers a tax incentive to SAF producers while the EU has adopted a mandate requiring a minimum portion of SAF in the overall aviation fuel supply, with targets set at 2% by 2025, 5% by 2030, and 70% by 2050, according to Bangchak.
Japan has also established a goal for international flights passing through its airports, stipulating an SAF blending ratio of 10% by 2030.