Thailand Weighs 2026–2030 Biofuel Plan as E20 Support Nears Expiry

Farm groups seek policy before support expires

Thailand's cassava and sugarcane growers are pressing the government to establish a clear energy transition plan for 2026–2030 before biofuel price compensation under the Oil Fuel Fund Act expires on September 24, 2026. The groups fear that the end of support could narrow the price gap between E20 gasohol and conventional gasoline, reducing motorists' incentive to choose the ethanol blend.

Thai PBS and RYT9 reported that Rangsee Phisard, president of the Thai Tapioca Growers Association, and Sittiboon Ratchasuwirot, chairman of the Northeastern Sugarcane Growers Institute, are seeking measures to protect demand across the ethanol supply chain. Ethanol provides a major outlet for domestically produced cassava, sugarcane and molasses, linking farmers with fuel producers and refiners.

Consumption is about half of installed capacity

Thailand's 28 ethanol plants have combined production capacity exceeding 7 million litres per day, while current consumption is approximately 3.5 million litres per day, according to both publications. The industry is therefore using no more than roughly half of its available capacity. The grower groups warn that demand could fall below 3.5 million litres per day without a replacement mechanism, intensifying the existing surplus.

E20 consumption increased during some periods early in the year as oil prices fluctuated, but the broader ethanol market remained flat or declined slightly amid a weak economy, Thai PBS reported. If compensation ends and E20 loses its price advantage, lower fuel demand could pass quickly through to ethanol plants. Producers could then reduce their purchasing quotas and prices for cassava, while sugar mills and associated plants could curb demand for sugarcane and molasses.

Proposal shifts focus toward new markets

The agricultural groups want policy to move from a fund that supports prices toward a system that creates additional value and new markets. They are asking the government to define long-term targets for ethanol and E20, provide continuity for investment and production planning, and make greater use of domestic agricultural feedstock. Earlier in the year, the government considered positioning E20 as Thailand's base gasoline as part of an effort to strengthen energy security and reduce dependence on imported crude oil, according to RYT9.

Sittiboon said a smaller ethanol market without an alternative outlet would affect feedstock demand, factory purchases, production volumes and costs, sugarcane prices and farmers' income. He pointed to Brazil and India as major ethanol producers that coordinate long-term policy for sugarcane, sugar and ethanol. The Thai groups are calling for farmers, industry and government to participate in designing the 2026–2030 framework before the existing compensation regime ends.

Policy choice affects agriculture and energy

The immediate issue is the retail economics of E20, but the consequences extend beyond fuel stations. With consumption already around 3.5 million litres below installed daily capacity, any additional decline would increase competition among plants for sales while weakening their ability to absorb agricultural output. Uncertainty also makes it harder for growers and processors to plan crops, raw-material procurement and investment.

A replacement policy has not yet been detailed in the supplied reports. The industry's request therefore centres on timing: it wants targets and market mechanisms in place before September 24, rather than after demand and feedstock purchasing begin to adjust. The government's decision will determine whether domestic ethanol remains a strategic outlet for cassava and sugarcane as Thailand changes the way it supports biofuels.