Thailand’s biodiesel production and consumption are projected to increase by 22% in 2026 compared with the previous year, driven by a higher blending mandate and government subsidies, according to a report by the US Department of Agriculture (USDA), Oils & Fats International reported.
Thailand raised its biodiesel blending requirement from B5 to B7 in March 2026 after reducing it to 5% in late 2024 amid high palm oil prices. The latest increase was aimed at reducing dependence on imported oil and cushioning the impact of rising fuel prices triggered by conflicts in the Middle East, the USDA’s October 26 report said.
As of October 2026, B7 remained the standard biodiesel blend in Thailand. However, the government periodically adjusted the mandate between B5, B7 and B10 depending on feedstock availability and market conditions.
Palm oil continues to be the primary feedstock for biodiesel production in the country. The government introduced restrictions on crude palm oil (CPO) exports in April 2026 to ensure adequate domestic supplies for biodiesel production.
According to the USDA’s Thailand – Biofuels Annual report, the shift from B5 to B7 increased domestic biodiesel demand, prompting the market to conserve available supplies. Biodiesel imports increased, while exports declined in line with restrictions on CPO shipments.
The country’s biodiesel sector has also attracted overseas investments. One company has reportedly started construction of a large bioenergy facility in Chonburi, which is designed to produce 300,000 tonnes of biodiesel annually.
Thailand targets 900 million litres of biodiesel consumption by 2037
Under the draft Alternative Energy Development Plan (AEDP) 2024–2037, Thailand has set a target of consuming 900 million litres of biodiesel by 2037. The broader plan aims to meet 36% of the country’s domestic energy requirements through renewable and alternative energy sources by that year.
The draft plan has also introduced sustainable aviation fuel (SAF) targets for the first time. The government is working to align domestic SAF production with international standards, the USDA report said.
Thailand’s SAF blending mandate came into effect on January 1, 2026, with a phased increase in blending requirements through 2036. The initial phase focuses on the hydro-processed esters and fatty acids (HEFA) technology, using used cooking oil (UCO) as feedstock. The country plans to gradually transition towards the alcohol-to-jet (AtJ) pathway as the technology develops.
The first phase requires a 1% SAF blend, with average production projected at 0.28 million litres per day. By 2036, the blending requirement is expected to reach 8%, supporting production of around 2.22 million litres per day and reducing carbon emissions by an estimated 2.3 million tonnes annually.
Companies expand SAF production capacity
Bangchak and PTT Global Chemical (PTT GC) were producing SAF commercially in Thailand at the time of the report, with supplies distributed through Bangkok’s Suvarnabhumi and Don Mueang airports.
Bangchak began commercial operations at its SAF facility in May 2026. The plant has a production capacity of one million litres per day and uses UCO-based HEFA technology.
PTT GC operates a commercial-scale facility that processes used cooking oil through HEFA technology, producing approximately 16,438 litres of SAF daily.
The USDA noted that Thailand’s SAF industry continued to depend on the HEFA production pathway, while AtJ technology remained under development and had yet to reach commercial scale. High production costs and feedstock supply constraints continued to pose major challenges to the industry’s expansion.
Meanwhile, Thailand has started expanding the use of biodiesel in the maritime sector. Although the country had not introduced a domestic biofuel blending mandate for bunker fuel, Bangchak and state-owned PTT Oil and Retail Business (PTT OR) had begun commercial distribution of B24 marine fuel blends.
The initiative is expected to help Thailand prepare for future international emissions standards governing the shipping industry.
