production cost of ethanol from tapioca is 9.51 Baht per litre.tapioca at 1.10 Baht per kilogram

The plant should have the output capacity of 500,000 litre per day.
The investment is 2,750 million Baht. The raw materials are sugar-cane and molasses, or tapioca. The best
locations with plenty of raw materials are Nakorn Rajasima, Kon Kaen, or Chaiyapum Province. The investor
should be the private sector while government agency such as Petroleum Authority of Thailand should also be
the shareholder in order to create confidence to the private investors and to help build networking
distribution to end-users.
production cost of ethanol from tapioca is 9.51 Baht per litre.
tapioca at 1.10 Baht per kilogram

As for the analysis on production cost, the breakeven point between the cost of raw materials and production
cost is calculated as
follows:
sugar-cane is priced at 550 Baht per ton, molasses at 1,250 Baht per ton, and tapioca at 1.10 Baht per
kilogram ( priced at ex factory) production cost of ethanol from sugar-cane and molasses is 9.51 Baht per
litre production cost of ethanol from tapioca is 9.51 Baht per litre.
The selling price should be 11 Baht per litre. The rate of return is 7.6% If the lending rate
can be reduced from 8% to 3% , the rate of return will become 9.8%
Comparing with benzin, the ethanol's selling price at 11 Baht per litre is higher than benzin
at 9 Baht per litre (ex refinery price).
Therefore, if the government wants to promote ethanol, the excise tax should be reviewed as well as Oil Fund
and Energy Conservation Fund. Furthermore, the government should be looking for other measures to make this
project feasible such as financing with low interest rate, official vehicles to use benzin mixed with
ethanol, setting up new Fund to stabilize ethanol price and push for the ethanol to be the additive in
increasing octane for vehicles instead of MTBE.

Recommendations
The feasibility of the project depends on the support from the government to improve, nullify
or remedy all the bottlenecks as
follows:
1 Regulations
According to the Announcement of Ministry of Commerce No. 1 (B.E.2541) dated 13 January 1998 regarding the
specifications of Benzin, the improvement is needed to allow ethanol to be mixed with benzin or gasohol, or
set up another particular specification for gasohol.
2 Taxation
The excise tax by The Ministry of Finance for unlead gas is 3.685 Baht and regulation under the Liquor Law
B.E. 2493 levied the tax for ethylalcohol for mix with oil at 0.1 % or 0.05 Baht per litre. Both contradict
each other in a sense that if benzin mixed with ethanol for sales as fuel will pay for excise tax at 3.685
Baht for both ethanol and benzin. Therefore, the taxation should be reviewed.
3 Contribution to the Fund
The Committee on National Energy Policy had set the contribution rate for Oil Fund at 0.45 Baht per litre for
benzin unlead octane 95 ,
0.25 Baht per litre for benzin unlead octane 91. Another
contribution rate for Energy Conservation Fund at 0.04 Baht
per litre for both benzin octane 95 and 91. This is another area to be reviewed.
4 Standards
There are two related industrial standards namely Ethanol Industrial Standards No.640-2533 and Gasohol
Industrial Standards No. 990-2533 which require some improvements. Besides, there should be industrial
standards on Diesel with Ethanol or Diesohol.
5 Privileges for Investment
The production wise, the machinery tax is waived, corporate tax is exempted for 8 years no matter where the
location site is, according to the current investment promotion. This privilege will greatly help boost the
investment.
The government should provide the following promotional measures :
1 The Ministry of Agriculture and
Cooperatives should have growing scheme on sugar-cane and tapioca to meet the demand of ethanol production.
2 The Ministry of Finance should
consider the excise tax exemption for ethanol when mixed with benzin to make its price more competitive.
3 The Committee on National
Energy Policy should review the waive of contribution to Oil Fund and Energy Conservation Fund for gasohol.
4 The government should invest in
the production in the first phase as well as facilitate financing with low interest rate.
5 The government should have the
official vehicles used gasohol. For public, the government should campaign the use of gasohol.
6 The government should set up
new Fund to stabilize the price of ethanol.
7 The government should push for
the use of ethanol as additive to increase octane instead of MTBE.