Feasibility of Ethanol in Thailand

1. Feasibility of Ethanol in Thailand • Presented by: CEP-KMUTT Research Group • An academic exchange between the University of North Carolina at Chapel Hill and King Mongkut’s University of Technology Thonburi with the help of Kenan Institute Asia

2. Feasibility of Ethanol in Thailand Faculty Advisors: 3. Prof Richard Kamens (UNC-Ch) 1. Associate Dean Pojanie Kummongkol (KMUTT) 2. Aajarn Suthipong Sthiannopakao (KMUTT)

3. Feasibility of Ethanol in Thailand • Why ethanol? • National security • Carbon-neutral fuel source • Trade deficit reduction • Domestic economic stimulus

4. Ethanol in Thailand • What constitutes “feasibility”? • Economics • Technology • Land Availability/Distribution • Environment • Society • Sustainability interrelated nature of these factors

5. Important Questions 1. What feedstocks fit Thailand? How does this inform technology? 2. What system of distribution (production facilities and land ownership among farmers) is best for Thailand? How is this decision made? How will this affect society? 3. Is ethanol an economic possibility? How does this inform technology? 4. What are the possible social and environmentalnegatives? How does this inform policy decisions? Economics?

6. Format of Presentation • Background • Current Government Policy and Price Structure • Production Technology • End-Use Technology • Land/Feedstock Availability and Production Distribution (GIS) • Social Implications • Ground-level ozone production in Bangkok (OZIPW) • Conclusions

7. BACKGROUND In 1977, the federal government set up the Ethanol Production from Sugarcane Committee In 1978, the government changed the name of this committee to the Ethanol Production from Agricultural Residue Committee In 1980, the Ministry of Industry announced the policy to produce ethanol as a fuel by regulating the standards used to determine the establishment of ethanol plant

8. BACKGROUND Pilot-scale Production of Power Alcohol from Cassava was entrusted to the Thailand Institute of Scientific and Technological Research by the Cabinet’s approval in January 1981 1. In 1997,Thailand’s economy crashed and OPEC decreased their production of oil causing the retail price of gasoline began to increase. 2. In 1999, Thailand lost money to imported oil- more than 1,680 million baht ethanol production project on September 19, 1999

9. BACKGROUND The government considered to solve these problem by setting up the ethanol production project on 19 September 1999 The ministry of Industry was entrusted to set up the National Ethanol Committee by the Thai Cabinet’ s approval

10. CURRENT GOVERNMENT POLICY and Ethanol Price Structures

11. The National Ethanol Committee relate with other agencies • 1.Raw Material Measure • Coordinate with the Ministry of Agriculture and cooperatives • to determine the production plan of raw material supply • Raw materials must be: • stable price • Produced to export • The possible raw materials for Thailand are cassava, sugarcane, and molasses.

12. The National Ethanol Committee relate with other agencies Raw material cost per unit of ethanol production * Average cost all Kingdom at farm, plantation year 1999/2000 ** Average cost all Kingdom at farm, plantation year 1998/1999 Office of Agricultural Economics and office of Committee on Sugarcane and Cane Sugar

13. The National Ethanol Committee relate with other agencies • Cassava policy • Cassava yield = 2600 kilograms per rai • Dose not promote farmer to expand the planted area to increase the quantity • Support the use of new species with higher yields. • The office of Agricultural Economics formulates cassava plan for plantation year 2001/2002 • To stabilize the price of cassava throughout the season • To promote and support production of new value added products such as alcohol.

14. The National Ethanol Committee relate with other agencies • Conclusion • To stabilize the price of cassava will result in: • the cost stabilization of ethanol produced from cassava feedstock. • the price of cassava in the world market will not affect ethanol production business. • To ensure a steady demand for farmer to produce adequate amounts of cassava to meet investors’ requirement.

15. The National Ethanol Committee relate with other agencies 2. Financial and Investment Measure Tax and the amount of surcharge collected structure I) An excise tax of fuel alcohol = 0.05 baht/liter II) The excise tax of octane 95 and octane 91 unleaded gasoline = 3.685 baht per liter III) Municipal tax collected is 10% of excise tax IV) Oil Fund has been 0.5 baht/liter for octane 95 and 0.3 baht/ liter for octane 91. Energy Conservation Fund equal to 0.04 baht per liter for octane 95 and octane 91 unleaded gasoline

16. The National Ethanol Committee relate with other agencies 2.1 Tax and Price Measures The National Ethanol Committee approves the excise tax measure and gasohol price policy a) Coordinate with the Ministry of Finance to exempt the excise tax for fuel ethanol. b) Regulate the ethanol fraction in gasohol at 10% and reduces the gasohol excise tax by 10%. c) Coordinate with NEPO to exempt or reduce the amount of surcharge collected from Oil Fund and Energy Conservation Fund for gasohol (ethanol price is lower than octane 95 gasoline 1 baht/liter).

17. Price structure of gasoline and gasohol on March 8, 2000 (unit: baht/liter) Source: NEPO

18. The National Ethanol Committee relate with other agencies • d) The National Ethanol Committee will consider the establishment of an Ethanol Price Stabilization Fund • The Committee wants the ethanol price to be stable to assure that • the factory can produce ethanol • to assure raw material price from the farmer.

19. The National Ethanol Committee relate with other agencies • The Ethanol Price Stabilization fund • MTBE price that is not stable, depends on the oil price in the worlds market. • When MTBE price is lower than ethanol price, the refinery plant will not consider using ethanol. • When ethanol price is lower than the price of MTBE, the ethanol plant will receive a large profit without distribution of that profit to farmers.

20. The National Ethanol Committee relate with other agencies • The Ethanol Price Stabilization fund (cont..) • To solve these problem by • collecting extra profit that arise from such conditions • pay the ethanol plant when the price of ethanol is higher than the price of MTBE. • The stability that this policy will provide will ensure that the price of ethanol never exceeds that of MTBE.

21. The National Ethanol Committee relate with other agencies 2.2 The Other Measures a) Coordinate with the Ministry of Finance to grant permission to the investor to sale ethanol within domestic fuel market. b) Coordinate with the Ministry of Industry to instruct Petroleum Authority of Thailand (PTT) to consider co-investment in production of fuel ethanol and also distribution and sale of gasohol. c) The Ministry of Finance urges the Thai Cabinet to cut the tax on vehicles that run on alternative fuels such as ethanol.

22. The National Ethanol Committee relate with other agencies 3.Privilege Measure The investor will receive maximum privileges and incentives provided by Board of Investment (BOI) Under the Priority Activities Program: 1) ethanol companies will be allowed an eight-year corporate tax holiday,regardless of location 2) will be able to import ethanol plant machinery without paying duties, regardless of location For a newly establishment projects, the Companies must have a ratio of liabilities : registered capitals not excess of 3 : 1

23. The National Ethanol Committee relate with other agencies • 4.Usage Promotion Measure • Coordinate with government agencies and state enterprises: • To set the priority use of gasohol for all official cars, • To run campaigns for general public to give information on gasohol and promote the use of gasohol.

24. The National Ethanol Committee relate with other agencies • 5.Production Quality Measure • a) Coordinates with the Ministry of Industry to review and update ethanol and gasohol standards. • b) Coordinates with the Ministry of Commerce to • review the Ministry Announcement on Gasoline Quality Definition • or • add definition of gasohol quality in particular in order to support the use of ethanol as fuel.

25. The National Ethanol Committee relate with other agencies 6.Other Support Measure Other support measures proposed by the proponent can be submitted for consideration.

26. Production Technology

27. Production Technology • Ethanol can be produced from simple sugars by fermentation • Ethanol via fermentation can utilize a variety of feedstocks- sugar, starch, biomass • How do feedstocks inform technology?

28. Production Technology • Non-saccharine feedstocks must be saccharified to fermentable sugars • Starch feedstocks -rely on mature, conventional technology -has been researched and is currently used in Thailand • Biomass feedstocks -require advanced technology for hydrolysis of cellulosic or lignocellulosic material, various technologies exist such as acid, steam disruption, GMO’s

29. Saccharification of Feedstocks: Conventional Technology • Starchy materials may be liquefied and saccharified using mature enzyme technology Pretreatment Liquefication Saccharification Fermentation *Based on conventional conversion technology- Shreve’s Chemical Process Industries. McGraw-Hill International Editions. 1984.

30. Advanced Technology • Biomass conversion • Refined use of acid hydrolysis -dilute processes -concentrated processes • Intense research and ever-increasing use of enzyme developments -Genetically engineered bacteria and fungi and enzyme production • Simultaneous Saccharification and Fermentation, SSF • Simultaneous Saccharification and Co-Fermentation, SSCF • Such technologies have yet to achieve widespread commercialization

31. Saccharification of Feedstocks:A Concentrated Acid Example *www.arkenol.com

32. Saccharification of Feedstocks:A Dilute Acid Example • BC International Corporation boasts a simplified biomass to ethanol process employing a marriage of dilute acid and enzymatic technologies Various ag. residues, for example rice hulls Dilute acid treatment to release sugars GMO, KO11 produces alcohol To further distillation *Flow diagram adapted from www.bcintlcorp.com

33. Economic Trends *Wyman, Charles. Biomass Ethanol: Technical Progress, Opportunities, and Commercial Challenges. Annu. Rev. Energy Environ. 1999.

34. Economic Trends • The previous slide indicates that the cost of ethanol has decreased consistently with advances in enzyme technology • The greatest areas for cost reduction are found in the initial processes of cellulose to ethanol technology and these potential reductions are significant-as low as $0.50/gal to $0.34/gal as projected by Chem Systems and NREL studies *Wyman, Charles. Biomass Ethanol: Technical Progress, Opportunities, and Commercial Challenges. Annu. Rev. Enerby Environ. 1999.

35. Technology in the Future andProjected Cost Reductions • Completely enzymatic processes -no acid or explosion treatment, only hot water and enzymes • NREL estimates potential $0.14/gal and $0.19/gal reductions for concentrated and dilute acid processes respectively • However, the greatest reductions are still estimated to come from implementation of completely enzymatic processes

36. Conclusions • Thailand has the capability to produce ethanol using conventional technologies • As the market expands and advanced technologies mature, greater amounts of cheaper ethanol may be produced • The suggestion given here is for foresight, flexibility, and diversity. • Ultimately, specific analyses will have to be performed to determine when and where newer technology may be implemented

37. END USE TECHNOLOGY

38. DIVIDED IN 2 PARTS 1. ALCOHOL-GASOLINE BLENDING 2. ALCOHOL-DIESEL FUEL BLENDING

39. 1. ALCOHOL-GASOLINE BLENDING • 10% ethanol blend doesn’t change significantly properties of gasoline. • Above 15% by volume, negative effects begin to appear • (found in a fleet test conducted of motor cars in Thailand) • Hydrated ethanol (95% to 96% purity) has a cost advantage over • the anhydrous ethanol (purity 99% and higher) • Hydrous ethanol causes corrosive effects • The blended fuel tends to separate into 2 layers when a small content of • ethanol and if the ambient temperature drops towards the freezing point

40. Fuel mileage comparison between Gasohol Vs Gasoline engine (Saengbangpla, 2001) Total in graph is summarized in size, age, used or un-used catalytic converter, brand name, European or Japanese,injection or carburetor engine and type of fuel (octane 91 or 95)

41. Properties of Gasohol

42. Effect of using gasohol in engine

43. USING GASOHOL

44. 2. ALCOHOL-DIESEL FUEL BLENDING • Diesel fuel blend containing up to 20% anhydrous ethanol • can be used to run unmodified diesel engines. • Higher ethanol conc. tend to delay ignition by compression • “QUENCH EFFECT” • An emulsifier was added when blending hydrated ethanol • with diesel fuel...engines running on this blend suffered noticeable quench and misfiring

45. 2. ALCOHOL-DIESEL FUEL BLENDING (continue) • This level blend attacks incompatible parts of fuel system • and causes considerable changes in fuel characteristics • Must use a high compression ratio or ignition improver • Must modify diesel-engine “alcohol-engine” • Add some equipment for feed process (feed ethanol)

46. Effect of using Diesohol in engine

47. CONCLUSION • 10% ethanol is the best percentage • Power when %Ethanol • Effect on some type of rubber and plastic equipment • Emulsifier must be added when blending hydrated • ethanol with diesel fuel • The exhaust gases will increase when the ethanol is • injected the feed process must be adjusted through • further research and development

48. Land/Feedstock Availability and Production Distribution

49. Feedstocks • Major Potential Feedstocks: • Cassava • Sugarcane (molasses) • Future Possibilities (lignocellulosic technology) • Agricultural Residues • Biogases • Rice Husk • Industry biomass Waste

50. Price of Possible Feedstocks Selling Price of Feedstocks at the Farm (data from 2000 Ministry of Industry)