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Thailand Advances Sustainable Aviation Fuel Initiatives with Tax Framework and Production Milestones
Government and industry collaborate to position Thailand as a low-carbon aviation hub in Southeast Asia.
Thailand is actively developing a comprehensive excise tax framework for sustainable aviation fuel (SAF) to establish itself as a low-carbon aviation hub within the Association of Southeast Asian Nations (ASEAN).
The Excise Department is currently defining SAF qualifications, specifications, and tax rates to encourage its development and production expansion.
This initiative aims to make SAF more financially attractive compared to conventional Jet A-1 fuel.SAF, a blend of biofuel and traditional aviation fuel, has the potential to reduce carbon dioxide emissions by up to 80% compared to standard jet fuel.
This supports Thailand's goal of achieving net-zero carbon emissions by 2050. The country's SAF production meets the International Sustainability and Carbon Certification – Carbon Offsetting and Reduction Scheme for International Aviation (ISCC CORSIA) standard.In a significant industry development, PTT Global Chemical Public Company Limited (GC) announced the successful launch of Thailand's first SAF production at its Rayong biorefinery.
Initially, GC plans to produce six million liters of SAF annually using used cooking oil as the primary raw material, with plans to expand production to 24 million liters per year in the future.
GC's SAF has been certified with the ISCC CORSIA standard, indicating its compliance with international sustainability criteria.To further promote SAF adoption, the Thai government is considering financial incentives, subsidies, and tax breaks for airlines utilizing SAF.
These measures aim to offset the higher costs associated with SAF, which is currently priced two to three times higher than conventional jet fuel.
Discussions are also underway to potentially reduce the jet fuel excise tax, currently set at 20% of the retail price, to encourage SAF usage.The Department of Energy Business (DOEB) is planning to provide promotional packages for investment in the SAF sector to accelerate the aviation industry's progress toward net-zero emission goals.
Talks with related authorities are planned to provide benefits to investors in the first five years to expedite SAF manufacturing.Globally, the International Civil Aviation Organization supports SAF usage as a strategy to achieve net-zero targets by 2050. Various countries and international organizations have endorsed SAF use; for instance, the United States provides tax incentives to SAF producers, while the European Union mandates a minimum quota of SAF in the aviation fuel supply, with targets set at 2% by 2025, 5% by 2030, and 70% by 2050. Japan has set a goal for international flights passing through its airports, aiming for a SAF blending ratio of 10% by 2030.In Thailand, companies like Bangchak Corporation Public Company Limited and Energy Absolute Public Company Limited have announced plans to produce SAF from used cooking oil.
Additionally, GC has partnered with PTT Oil and Retail Business Public Company Limited (OR) and Thai Airways International Public Company Limited to utilize SAF for both domestic and international flights.
This collaboration aims to develop a comprehensive distribution network across the region and set new standards for the environmentally friendly aviation industry.These coordinated efforts between the Thai government and private sector underscore the country's commitment to sustainable aviation practices and its ambition to become a leading low-carbon aviation hub in Southeast Asia.
The Excise Department is currently defining SAF qualifications, specifications, and tax rates to encourage its development and production expansion.
This initiative aims to make SAF more financially attractive compared to conventional Jet A-1 fuel.SAF, a blend of biofuel and traditional aviation fuel, has the potential to reduce carbon dioxide emissions by up to 80% compared to standard jet fuel.
This supports Thailand's goal of achieving net-zero carbon emissions by 2050. The country's SAF production meets the International Sustainability and Carbon Certification – Carbon Offsetting and Reduction Scheme for International Aviation (ISCC CORSIA) standard.In a significant industry development, PTT Global Chemical Public Company Limited (GC) announced the successful launch of Thailand's first SAF production at its Rayong biorefinery.
Initially, GC plans to produce six million liters of SAF annually using used cooking oil as the primary raw material, with plans to expand production to 24 million liters per year in the future.
GC's SAF has been certified with the ISCC CORSIA standard, indicating its compliance with international sustainability criteria.To further promote SAF adoption, the Thai government is considering financial incentives, subsidies, and tax breaks for airlines utilizing SAF.
These measures aim to offset the higher costs associated with SAF, which is currently priced two to three times higher than conventional jet fuel.
Discussions are also underway to potentially reduce the jet fuel excise tax, currently set at 20% of the retail price, to encourage SAF usage.The Department of Energy Business (DOEB) is planning to provide promotional packages for investment in the SAF sector to accelerate the aviation industry's progress toward net-zero emission goals.
Talks with related authorities are planned to provide benefits to investors in the first five years to expedite SAF manufacturing.Globally, the International Civil Aviation Organization supports SAF usage as a strategy to achieve net-zero targets by 2050. Various countries and international organizations have endorsed SAF use; for instance, the United States provides tax incentives to SAF producers, while the European Union mandates a minimum quota of SAF in the aviation fuel supply, with targets set at 2% by 2025, 5% by 2030, and 70% by 2050. Japan has set a goal for international flights passing through its airports, aiming for a SAF blending ratio of 10% by 2030.In Thailand, companies like Bangchak Corporation Public Company Limited and Energy Absolute Public Company Limited have announced plans to produce SAF from used cooking oil.
Additionally, GC has partnered with PTT Oil and Retail Business Public Company Limited (OR) and Thai Airways International Public Company Limited to utilize SAF for both domestic and international flights.
This collaboration aims to develop a comprehensive distribution network across the region and set new standards for the environmentally friendly aviation industry.These coordinated efforts between the Thai government and private sector underscore the country's commitment to sustainable aviation practices and its ambition to become a leading low-carbon aviation hub in Southeast Asia.
