Thailand has begun commercial production of sustainable aviation fuel (SAF). State-owned oil and gas company PTT started producing SAF in January 2024. The fuel is made from waste oil and biomass. PTT’s subsidiary, PTT Global Chemical (PTT GC), will initially supply domestic airlines and has signed an agreement with Thai Airways.
PTT GC plans to produce 6 million liters of SAF in the first year. This amount can fuel around 2,000 flights for midsize aircraft traveling 2,000 to 3,000 kilometers per trip. The company plans to increase production in the future. It is considering using cassava and sugar as raw materials, in addition to sourcing waste oil from overseas.
Another state-owned company, Bangchak, is also expanding SAF production. A new facility is under construction near Bangkok, with an investment of at least 8.5 billion baht ($250 million). It is expected to start production by June 2024. The facility will have a daily capacity of 1 million liters. Bangchak has signed agreements with Japanese companies for raw material sourcing and distribution.
The Thai government has introduced policies to promote SAF. Airlines in Thailand will be required to use a 1% blend of SAF by 2026. The government plans to increase the percentage over time. Tax incentives will also be offered. The Board of Investment has announced a three-year corporate tax exemption for companies supplying SAF-mixed jet fuel.
Tourism growth in Thailand is expected to drive SAF demand. The number of flights to and from Thailand is projected to increase by 10-20% annually between 2024 and 2026. The International Civil Aviation Organization has set a global target of net-zero emissions from aircraft by 2050.
Other Southeast Asian countries are also expanding SAF production. In Malaysia, Petronas is developing a biorefinery in partnership with Japanese and Italian companies. It is expected to begin operations in 2028. In Singapore, Neste has started SAF production with an annual capacity of 1 million tonnes.
The cost of SAF remains high. Prices are currently three to five times higher than conventional jet fuel. Singapore plans to introduce an SAF levy on outbound flights in 2026 to share the costs with travelers.
