Bangchak eyes 5-7 year ROI on SAF plant

Thai energy conglomerate Bangchak Corporation anticipates a payback period of five to seven years for its investment in sustainable aviation fuel (SAF) revising the initial time frame from three to five years, according to reports from local Thai media.

However, Bangchak’s president Chaiwat Kovavisarach remains optimistic about the profitability of the venture.

The company’s new 10-billion-baht ($288m) SAF production facility is scheduled for a trial run on April 25th, utilising used cooking oil as its primary feedstock.

Mr. Chaiwat cautioned that inaction on carbon neutrality would risk the aviation industry being labeled as highly polluting.

Regulations from international bodies like the International Civil Aviation Organisation and the International Air Transport Association indicate that the European Union will mandate a 2% SAF blend by 2030, with the UK and the US requiring 10% by the same year.

Bangchak intends to commence commercial SAF production in the middle of the current year, reaching half of its 1m litres per day capacity. This capacity is based on an estimated 5% SAF blend in Thailand, calculated from the nation’s 2019 jet fuel consumption of 20 million litres daily.

The company has established partnerships with food and beverage businesses to source used cooking oil and has already secured SAF sales agreements with clients.