THAILAND

Swedish bus maker is looking to cut emissions from Thai public buses but certain rules need to be sorted out first.

With the transport sector responsible for more than 70% of the oil used in the Organisation for Economic Cooperation and Development countries, Sweden is turning more to ethanol buses, with 750 of them now plying the streets of the capital.

Scania buses from Sweden, running on ED95 fuel, have started trial runs in Bangkok.

Stockholm had its first biofuel bus, which cut up to 90% of carbon dioxide from fossil fuel, in 1989.

Now its goal is to have 50% of public transportation running on biofeuel by 2015, and 100% by 2025.

Thailand now has a project to import Scania's ethanol buses, of which trials have started since the beginning of 2011.

However, the type of fuel needed for the vehicles is ED95, which is heavy-duty ethanol fuel used in diesel engines adapted for ethanol.

In Sweden, it is supplied by SEKAB Biofuel & Chemicals, but in Thailand the additives need to be produced by PTT Plc.

Scania is currently in the process of signing an agreement with PTT to develop the additives in Thailand. The development should start this year.

The Swedish furniture chain Ikea is also interested in operating ethanol shuttle buses from the skytrain to their store, and will ask their subcontractors to use the buses if the fuel receives support from the government.

"In Thailand, the ethanol needed for this engine is considered liquor-grade, which poses some difficulties. Transporting it requires approval from authorities. Therefore, there is a need to convince the Excise Tax Department that hydrous ethanol 95% is fuel," said Vichai Jirathiyut, managing director of Scania Siam Co Ltd.

He added such categorisation also means one litre of the fuel is subjected to a six-baht tariff, while the tax rate will be only six satang if it is categorised as fuel.

The Department of Energy Business has not registered the fuel for commercial sales either.

Urban Lofvenberg, product manager of sustainable solutions of buses and coaches of Scania, said the price of ED95 needs to be competitive with that of diesel, and the government could help by scrapping the tax on it.

"If you run a truck on diesel and change the engine so it can run on ethanol, you can reduce carbon dioxide emissions by 70-71% on average. But if you use sugarcane, which is the most efficient globally, you can reduce up to 90-95%," he said, adding that ethanol buses are 30% more expensive than diesel buses.

Scania's vision for sustainable transport is to reduce the amount of carbon dioxide per tonne kilometre by 50% from 2000 by using smarter transport, driver training, technology and biofuels.

Biofuels commercially available today include ethanol, biodiesel and biogas. Mr Lofvenberg claimed that Scania is the only company that can make public transport vehicles that run on all three, as well as 100% biodiesel.

Ethanol is the world's major biofuel, totalling around 90% of all biofuels. The average carbon dioxide reduction is 71%, according to the European Union, compared with 38% for biodiesel, and 73% for biogas.

However, biogas has expensive infrastucture costs as liquid is much easier to transport than gas, said Mr Lofvenberg.

Last year, a total of 23 million gallons of ethanol were produced, according to the United States Department of Agriculture. The United States and Brazil are the major ethanol producers.

Scania has engines that currently fulfils the Euro-5 standard that is used in Europe, while the company is currently producing Euro-6 engines, to be made compulsory in the continent in 2014.

Meanwhile, government decisions will hold the key to whether renewable energy investment develops in the years to come.

The Energy Ministry recently announced it will phase out 100% fossil petrol by October this year in order to stimulate demand for locally produced ethanol.

Energy Minister Pichai Naripthaphan said the plan would double ethanol use to 2 million litres per day. The country's total current capacity is estimated at 3 million litres.

As well, the government approved a revised plan that calls for renewable energy to account for 20% of the country's consumption by 2021, up from a previous target of 20%.

The Alternative Energy Development and Efficiency Department said ethanol consumption will rise to 6 million litres a day from 1.62 million litres now, up from the old target of 4 million litres.

The government hopes to shave 574 billion baht off the 1 trillion baht worth of energy imports annually while cutting carbon dioxide emissions to 76 million tonnes a year.

Bangchak Petroleum, a state majority-owned refinery and retailer, is planning to expand its retail outlets for E20 to 600 from 500 now and E85 to 50 units from 30.

Bangchak said it was ready to scrap 91 petrol at the pumps if the government takes seriously its promotion of ethanol.