Bangchak Corporation pivots to sustainable aviation fuel

Jun 23, 2023

A forward-looking strategy is being implemented by energy conglomerate Bangchak Corporation as it navigates the uncertain future of the oil refinery business, deeply impacted by the global push for electric vehicles. In an endeavour to address this dilemma, the corporation has steered its focus towards the development of biofuel, known as sustainable aviation fuel (SAF), for aircraft, potentially a major source of revenue in the near future.

The significantly eco-friendly nature of this anticipated product is expected to keep the company robust even as the popularity of electric vehicles surges. Governments worldwide are avidly promoting the switch to eco-friendly cars. While this transition would substantially reduce carbon dioxide emissions, it will also impact oil producers and manufacturers of combustion engine cars.

Though some experts have advised the oil refinery operators to pivot towards petrochemicals to stay afloat, Bangchak Corporation has set its sight on the sustainable aviation fuel business instead, confident about the promising returns that it could bring. The ambitious Bangkok-based company aims at setting up a 10-billion-baht SAF production facility near its oil refinery in the capital’s Phra Khanong district.

As the country’s inaugural endeavour into sustainable aviation fuel production, the construction of the plant is projected to be finished by the end of 2024. The company’s ambitious plan includes kick-starting the commercial operations of its one million litres per day capacity production facility by 2025.

Bangchak Corporation views the sustainable aviation fuel business as a critical element of its varied environmental, social and governance (ESG) endeavours. The eco-conscious firm anticipates these projects will enable it to achieve carbon neutrality- a perfect balance between emission and absorption of carbon dioxide- by the year 2030.

As sustainable aviation fuel bears characteristics similar to traditional jet fuel but with the added environmental advantage of a smaller carbon footprint, it is a favourable alternative as it can significantly reduce greenhouse gas emissions. According to various forecasts, this unique biofuel, primarily composed of used cooking oil and agricultural waste, is capable of reducing greenhouse gas emissions by a staggering 80% as compared to conventional jet fuel.

An estimated 1 million litres of jet fuel is consumed per day by flights operating between Thailand and Europe. Switching to sustainable aviation fuel could reduce carbon dioxide emissions by up to 80,000 tonnes annually.

Under the novel campaign Fried to Fly, the corporation also encourages households to sell their used cooking oil to the company at 20-23 baht per litre to ensure a sufficient supply of raw materials for sustainable aviation fuel production. Not only would this initiative address the issue of improper disposal and unhealthy reuse of cooking oil, but it would also aid in the mitigation of environmental pollution.

Bangchak Corporation is also aware of the potential use of hydrogen as an alternate fuel source in the transport sector. But its commercial viability and technical feasibility in international aviation could take a few decades to materialise due to its cost being 6-10 times higher than jet fuel.

In other parts of the world, sustainable aviation fuel usage has gained substantial support. The US, for example, provides tax incentives to SAF producers and the EU has mandated a minimum quota of SAF for aviation fuel supply, with targets for 2025 and 2030 set at 2% and 5%, respectively, and an ambitious 70% set for 2050. Japan has set a SAF blending ratio of 10% by 2030 for international flights passing through its airports, reports Bangkok Post.

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