Ever since renewable energy sources came back into focus in the late 20th century, biodiesel has become a worldwide emerging market. Over the past decade, Germany, France, Italy, US and Austria have been the top five countries with the highest volume of biodiesel production. With growth rates of more than 30% global biodiesel production reached 3.5 billion liters in 2005 with approximately 85% coming from the EU (Source: Emerging Markets Online).

The demand for biodiesel in Thailand is expected to rise sharply due to its many benefits over petroleum diesel and above all due to economic reasons related to the rising demand for oil and the soaring price for petroleum diesel. The Thai Government aims to promote domestic biodiesel in place of petroleum diesel with the purpose of reducing the country's dependence on imported oil, enhancing the country's energy security, and strengthening the country’s self-reliance in line with His Majesty’s Sufficiency Economy Philosophy. Accordingly, tax measures will make the price for biodiesel more attractive than for petroleum diesel, especially for blends of biodiesel, which do not require modifications of vehicle engines.

The current domestic diesel consumption is at 50 million liters per day and is expected to rise to 85 million liters per day by 2012. Assuming a B10 mandate by the Government, the biodiesel requirement would thus be 8.5 million liters per day by 2012 in order to meet the total national diesel demand.

Several biodiesel plants are already operating in Thailand with a total production capacity of currently about 1 million liters per day. About 400 petrol stations are distributing B5 (5% biodiesel with 95% diesel) in Chiang Mai and Bangkok (Source: Department of Alternative Energy Development and Efficiency).