Abstract:
The future of the biofuel industry in Thailand is expected to grow increasingly at the consumption target of 5,900 million litre per year (approximately 10%) of gasoline and diesel consumption by 2021. This thesis reviews the economic, environmental, and social costs and benefits associated with biofuel implementation in Thailand. The costs and benefits are estimated and monetised, where possible. Due to tax regimes and subsidies in biofuel development, the net cost of biofuel cannot be estimated accurately. However, the net saving from avoided imported petroleum is estimated to be approximately $1.9 billion per year (50 billion Baht per year), substantially improving the country’s trade balance. Environmentally, biofuels substitute fossil-based carbon in burning fuel and help improve air quality problems, such as CO2 and NOX emissions. Social analysis of the case study has indicated a significantly positive impact from the use of biofuels in terms of both monetised and non-monetised values including increase farmers’ incomes, create employment, and improve rural development. The present study also discusses the potential challenges of biofuel development, including limited water supply and land use in feedstock development. As the country’s energy plan aims to double the biofuel production by 2021, this will require an increase in the output of feedstock to three times the current stockpiles. Case studies were proposed to analyse the impacts if the government providing the incentive to improve the water system used in cultivation as well as increasing the yield of the crops. The simple multi-attribute rating technique analysis was also used to assess the long-term implications of the government policies supporting biofuel crop development. The result of the analysis shows that the government incentive to support farmers during drought is necessary for the country’s biofuel sustainability. The criteria used in analysis include energy security, trade balance, CO2 emission, food prices, farmers’ income and governmental expenditure. Additional incentives to support farmers are needed in order to ensure the success of Thailand’s biofuels programme. This includes water management and agriculture development plans to ensure the sustainability of the biofuel industry in Thailand.