Thai national petroleum and energy major Bangchak Corporation plc has announced that it, together with its its affiliate BBGI plc, has signed a Memorandum of Understanding (MoU) with Thanachok Oil Light Co. Ltd to be the first producer and supplier of sustainable aviation fuel (SAF) from used cooking oil (UCO) in Thailand.
The parties agreed to establish BSGF Co. Ltd (BSGF), a joint venture with a THB 8-10 billion (≈US$ 220-280 million) investment, with the investment proportion of 51 percent held by Bangchak, 29 percent by Thanachok Oil Light, and 20 percent by BBGI respectively.
A Strategic Partnership
This joint venture is the amalgamation of the experience and expertise of the three partners to lay a solid foundation for BSGF in terms of the procurement of raw materials, production, and distribution.
It draws on the strengths of Bangchak as an operator of a world-class refinery complex and a pioneer in buying UCO for the production of biodiesel in Thailand, along with its expertise in oil trading via its affiliate BCP Trading Co., Ltd (BCPT), the largest independent oil trader in the Singapore market combined with Thanachok Oil Light’s long experience in the procurement of UCO, and BBGI’s leadership in biofuel industry and producer of high-value bio-based products.
BSGF is prepared to increase its capacity to address future SAF demand according to global SAF trends, aligned with the European Union requiring progressive mixtures of SAF in aviation fuel for flights entering European Union countries – according to the resolution of the European Parliament in July 2022 for the level of SAF adoption from 2 percent in 2025 to 6 percent, 37 percent and 85 percent in 2030, 2040 and 2050 respectively – and measures from the International Civil Aviation Organization (ICAO) and International Air Transport Association (IATA) which has set Net Zero target for the global aviation industry by 2050, said Chaiwat Kovavisarach, Group CEO and President of Bangckak Corporation.
Produce 1 million litres per day
BSGF will begin the construction of a production unit of SAF from used cooking (UCO) within Bangchak Refinery, expected to be ready for commissioning by the end of 2024,
With an initial daily production capacity of 1 million liters, the BSGF joint venture plans to start supplying domestic and international aviation industries by Q4/2024, helping to reduce approximately 80 000 tonnes of carbon dioxide equivalent (CO2eq) of greenhouse gas (GHG) emissions from air travel and transport annually.
Securing feedstock
Tanawat Linjongsubongkot, Managing Director of Thanachok Oil Light Co. stated that Thanachok is confident in this joint venture, recognizing the capability of Bangchak, which prioritizes enhancing energy security in harmony with the environment and society, which complements Thanachok’s corporate mission as an industrial group specializing in the production of biodiesel from UCO, working closely with communities in the collection to prevent repeated usage or improper disposal in public waterways.
Presently, Thanachok Group has a UCO collection network covering 77 provinces across the country, able to collect approximately 17 million liters monthly.
Thanachok Oil Light will focus on the development of the mechanism and procurement of UCO for SAF production, to advance UCO collection and storage industry standards to stably and sustainably accommodate aviation industry demands, Tanawat Linjongsubongkot said.
Kittiphong Limsuwannarot, President and CEO at BBGI stated that from its operational biodiesel plant expertise, technology, and feedstock, BBGI is able to sufficiently provide raw materials for SAF production, as well as units that are able to improve the quality of raw materials for SAF production such as Palm Fatty Acid Distillate (PFAD) and UCO.
SAF from used cooking oil presents both socio-economic and environmental benefits, completely in line with the BCG Economy Model, emphasizing the use of bio-resources to create value through the development of high-value products linking the Circular Economy, taking into consideration how to maximize and benefit of various materials, and the Green Economy, which goes beyond just economic development and must balance social and environmental development to ensure concurrent stability and sustainability, Kittiphong Limsuwannarot said.
Chaiwat Kovavisarach concluded that the joint venture establishing BSGF to produce Thailand’s first and only SAF from UCO is a new chapter for Thailand’s energy industry which is transitioning to clean energy through green energy innovation.
This also marks an important milestone of Bangchak’s BCP 316 NET plan targeting Net Zero GHG Emissions in 2050, and steering Thailand towards its Net Zero target in 2065.
