One of the Thai government's measures to promote ethanol use is excise tax exemption, making gasohol cheaper than gasoline. The policy in favour of biofuels is being supported by their contribution to fossil energy savings and greenhouse gas (GHG) mitigation. An analysis of energy balance (EnB), GHG balance and GHG abatement cost has been done to evaluate molasses-based ethanol (MoE) in Thailand. A positive EnB of 19.2 MJ/L implies that MoE is a good substitute for gasoline, effective in fossil energy savings. GHG balance assessment based on the baseline scenario shows that emissions are most likely to increase with the substitution. Scenarios using biogas captured from spent wash treatment and rice husk to substitute coal used in ethanol conversion give encouraging results in improving the GHG balance. However, the higher price of MoE over gasoline currently has resulted in high GHG abatement costs, even under the best-case scenario. Compared to the many other climate strategies relevant to Thailand, MoE is much less cost effective. Governed by the rule of supply and demand, a strong fluctuation in molasses price is considered the main cause of volatile MoE price. Once supplies are stable, the trend of price drops would make MoE a reasonable option for national climate policy.

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