Presently, there are 17 factories operating with the total production capacity of 2.575 million liters/day but most of them have operated under their full production capacity due to oversupply of ethanol. The influencing factor for decreasing ethanol demand is other alternative energy for transportation, i. e. Liquid Petroleum Gas (LPG) and Compressed Natural Gas (CNG), being promoted by the government. LPG is a primary fuel for household use such as for cooking that is why it is important to control the price of LPG (being low at 18 Baht per kilogram or 0.59 USD per kilogram). This promotes an increase usage of LPG in automobile sector, as indicated by increasing automobile engine change from gasoline to LPG. For CNG, there are several policies being released to promote the use

of CNG in automobile sector in order to reduce the amount of gasoline consumption. Firstly, there is an exemption of tax for CNG fuel tank. Secondly, government agrees to cover the cost of changing car engine to CNG-using engine for taxi countrywide and tax reduction for CNG fuel cost. With the cost of production and fuel itself, the actual price is at 14.75 Baht per kilogram but the selling price is only at 8.50 Baht per kilogram. This difference requires a significant amount of subsidized oil fund to compensate the gap. At present, the government led by Ministry of Energy, has considered different mechanisms to intensify ethanol demands in transportation sector by promoting use of gasohol with a higher ethanol component (E85 and E100) for Flexible Fuel Vehicle (FFV), use of ethanol in motorbikes and use of ethanol as diesohol for trucks. These applications need technical support to acquire consumer’s confidence. In addition, supporting policy and effective mechanism for exporting bioethanol can help expand market demand.