Demand and Supply of Crude Palm Oil for Biodiesel Production towards Food and Energy Security

Abstract

Energy and food security are two key national policies and agenda of Thailand. The Department of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy has modified a 15-year (2008-2021) Alternative Energy Development Plan (AEDP). According to the modified AEDP, the share of renewable and alternative energy consumption should increase to 25% by 2021. The latest policy aims to promote the biodiesel consumption and production by 5.97 million liters/day within 2021, up from its previous plan of 4.50 million liters/day while nowadays production capacity is 1.62 million liters/day. The current and anticipated production of biodiesel require raw materials, notably crude palm oil (CPO) from oil palm plantations. This paper presents a feasibility study, with respect to the AEDP plan, for biodiesel production by using domestic fresh fruit oil palm as a raw material. Demand and supply are analyzed based on statistical modeling and forecasting techniques, as well as GIS spatial analysis. The results show that the domestic CPO consumption for cooking palm oil will be 1.02 million tons/year, while biodiesel production will be 1.67 million tons/year in 2021. This corresponds to an oil palm plantation area of 11,152 km2 in 2021. Based on GIS spatial analysis along with land-use database and other relevant databases, it was found that the suitable area for palm oil plantation in Thailand is 14,639 km2, which is sufficient for domestic demand and consumption. The suitable area consists of 9,664 km2 for quite suitable and 4,975 km2 for medium suitable. However, the government should provide the guidelines, along with pro-active and supportive policies for worst case scenarios, e.g. drought and flood leading to the insufficient raw material, in order to reduce the negative impacts of biodiesel production for domestic demand and consumption.