Cabinet Allows Tax-free Import Of 'green' Cars

[george]

Cabinet allows tax-free import of 'green' cars

BANGKOK: -- In an attempt to encourage more motorists to switch to using ethanol-based fuel, the cabinet on Tuesday gave a green light to exempt import tariffs on E85 car parts as well as lowering excise taxes for E85-powered cars.

E85 is a blend of 85 per cent ethanol and 15 per cent gasoline.

Pannee Sathavarodom, director-general of the Ministry of Finance's Fiscal Policy Office, said as global oil prices continued to rise and The government also wanted to promote greater use of alternative energy in Thailand as a substitute for imported crude, the cabinet agreed to the ministry's proposal for a tariff waiver for E85 car parts for three years, from the date when the law takes effect.

Also, excise taxes for E85 vehicles will be lowered to 25, 30 and 35 per cent for cars with engine capacities not exceeding 2,000, 2,000 to 2,500, and 2,500 to 3,000 cc respectively. The planned excise tax reduction will be equal to excise taxes currently imposed on E20 vehicles.

Mrs Pannee said the excise tax on E85 fuel will also be reduced to Bt2.5795 per litre from Bt3.6850.

Meanwhile, Energy Minister Poonpirom Liptapanlop said she would confer with European and Japanese E85 car manufacturers as well as with state-owned PTT Public Co., Ltd. and Bang Chak Petroleum Pcl within this week.

PTT and Bang Chak Petroleum have agreed to start selling E85 at 30 to 50 of their service stations within the next three to five months, Mrs. Poonpirom said.

She said European car manufacturers are expected to establish plants producing E85 vehicles in Thailand in the next 12 to 18 months, which should be considered a positive sign as more motorists could change to using alternative energy.

It is projected that 60 per cent of motorists in Thailand will switch to using E85 with consumption estimated at 4.4 billion litres annually. With more motorists expected to make the change to using E85 in the next three years, the country could save energy worth about Bt96.7 billion annually.

--TNA 2008-06-03

[PeaceBlondie]

If it true that only Volvo makes E85-compatible fuel cars, that is an incredible number of Volvos to be sold at a couple million baht each....

[guava]

Quite a number of manufacturers actually, but I don't know what's available in Thailand yet, or how effective this tax exemption will be. Sounds good in theory.

I'll take a Lexus GS 450h thanks - V6 Flex Fuel + 2 electric motors makes for a pretty hot hybrid.

[mrt273nva]

this would be an amazing deal as you would avoid the 200% import tax on vehicles. i'm half tempted to get one now. i'm curious about having them serviced though. i doubt that too many mechanics would have spare parts for an imported hybrid.

[PeaceBlondie]

I did not see the word hybrid in the opening news clipping, just mention of E85 fuel.

[jayjayjayjay]

I wonder if they will really let these models in duty free!!!!!!!

Mercedes-Benz

* 2.6L C240/C230 luxury series

* 3.0L C300 sports luxury series

* 3.2L C320 Mercedes-Benz sport series

We know what politician will all be driving in 2 months time!

Here's a webpage, maybe some of those moonlighting distilleries upcountry will change there bottling operations to be fuel pumps!!!

http://running_on_alcohol.tripod.com/id36.html

Edited June 4, 2008 by jayjayjayjay

[billd766]

But where would you fill them up?

How many gas stations actually sell the stuff and where are they?

[Lorin]

"PTT and Bang Chak Petroleum have agreed to start selling E85 at 30 to 50 of their service stations within the next three to five months, Mrs. Poonpirom said."

Does it mean they are not selling E85 right now at all in their stations? Plus what is excise taxes? What is excise tax on locally assembled German and Swedish cars right now?

[Gravelrash]

If true sounds like a business opportunity for the right person.

[stumonster]

If true sounds like a business opportunity for the right person.

yes - exporting panels from cars that have had their engines shagged by using a non-suitable fuel

[Plus]

Nornmally Volvo only sells 50 cars a year, that would be one for each planned station.

"60% of Thai motorists will switch to E85" - there's not a single E85 vehicle on the market yet and conversion costs more than some second hand cars. Not to mention that they don't have anywhere near enough ethanol and refineries.

New heights in optimism, perhaps.

[Jimjim]

Ethanol is probably not the wave of the future. It works for now but it seems it could never be produced on the mass scale that oil is being produced. There's even less corn in the world than oil. The world and auto industry needs to focus on other, more well thought out solutions.

[wolfmanjack]

More corn can be grown. Also other crops can be grown that can be used to make ethanol. Why can't wood alcohol be used ? There are Many furniture factories that produce saw dust.

As for the import tax, does it include engines duty free ? I know it says parts that are not available in thailand so why can't the car be built here with the engine imported and put in the car ?

[jayjayjayjay]

Nornmally Volvo only sells 50 cars a year, that would be one for each planned station.

"60% of Thai motorists will switch to E85" - there's not a single E85 vehicle on the market yet and conversion costs more than some second hand cars. Not to mention that they don't have anywhere near enough ethanol and refineries.

New heights in optimism, perhaps.

Plus is that researched data you have? I recall significant gov approvals of ethanol plants around 2 years ago, a lot of these should be comming on line very soon. I dont mind you being critical, but in the face of global warming, what would you suggest as a better approach. Plus for PM would be a joke!

[Jimjim]

More corn can be grown.

Most likely not fast enough. I agree with the business experts. Another direction needs to be taken.

[Hog Head]

Not clear if one can import a complete E-85 car or just the parts duty free.

Any part for a E-85 car, or just the E-85 specific fuel and engine related bits?

CKD or CBU?

So many unanswered questions

[Plus]

Nornmally Volvo only sells 50 cars a year, that would be one for each planned station.

"60% of Thai motorists will switch to E85" - there's not a single E85 vehicle on the market yet and conversion costs more than some second hand cars. Not to mention that they don't have anywhere near enough ethanol and refineries.

New heights in optimism, perhaps.

Plus is that researched data you have? I recall significant gov approvals of ethanol plants around 2 years ago, a lot of these should be comming on line very soon. I dont mind you being critical, but in the face of global warming, what would you suggest as a better approach. Plus for PM would be a joke!

I didn't research Volvo sales, probably closer to 700 cars a year.

Ethanol plants were build to satisfy E10 demand, not E85. Do you need to run a research to understand that it's not enough.

Actually the current overcapacity in ethanol production is due to low prices, not lack of demand. If they sell their ethanol at market price, no one would buy it at the pump.

Same will go for E85, I suppose. The only real benefit of switching to ethanol is lowering oil imports for the coutnry, not that it's cheaper - and this is the main problem they are going to face.

They should speed up eco-cat project and start local hybrid car production in parallel.

Only few carmakers build E85 compatible engines, and none of them are Japanese, afaik, so they have to be developed from the ground up. Volvo and others can import a few cars or even import parts and assemble them here, but their sales volume won't make even a dent in overall consumption.

[wolfmanjack]

Not clear if one can import a complete E-85 car or just the parts duty free.

Any part for a E-85 car, or just the E-85 specific fuel and engine related bits?

CKD or CBU?

So many unanswered questions

The article in the post said around 25% tax on the car but the parts are duty free. I would say that the engine would be a part and could be dropped in a car assembled in thailand.

JimJim,

Any answer to the use of wood alcohol ????? Most of the sawdust produced by furniture factories here in chiang mai is burned.

Also why could more crops that alcohol can be produced from not be put in place in time to abate the use of oil for cars ?? Corn and sugar cane only take 3 to 4 months to grow.

I have a friend that has been producing his own biodiesel from used cooking oil and burning it 50/50 with regular diesel in his cummins engine since 2005. He hasn't had any problems yet. Also a lot of articles about 100% biodiesel vehicles in Europe. Combining a biodiesel engine with an electric motor would be the best of both worlds and would leave the oil for manufacture of plastics. From what i understand hydrogen is at least 10 years away from being affordable

[Farma]

Slightly off topic

I spotted a GMC Suburban with a “E100 Ready” metal badge about a month ago in the most unlikely place….Saudi Arabia

[tartempion]

If they would use their brains they would let in cars running on 5l/100kms such as VW Polo, Peugeot 107.

Seems no one cares for drivers and passengers security neither: you will only find ABS, EBD and sometimes TWO airbags in the top models sold in Thailand. My Vigo 4x4 3G only has one airbag, I ordered a Nissan Tiida G top model to get two, not impressed But it will run on E20....

Please note ABS, EBD, front and side airbags to be standard features in ALL VW's in Europe and most othehr manufacturers.

Top cars will also have window airbags and even knee airbags. Top Nissan Teana 2.3 JS V6 in Thailand has 6 airbags, a wonder

Edited June 5, 2008 by tartempion

[guava]

Like others I'm not entirely convinced Ethanol is the future (well the best option anyway), but I do believe it is here to stay, for a while at least.

From a few things I've read lately Japanese/Asian manufacturers can start rolling off flex-fuel cars in numbers, pretty much whenever they decide. It's all going to be a chicken and egg thing for a while, but the US and Canada seem very committed (amongst other countries of course including Brazil), and it appears also that Japan is very serious. I think we may all be surprised by how fast it happens. I hope so.

http://www.ilcorn.org/update/html/5-30-08.html

The Wikipedia entry on flex fuel is worth a read.

I also recommend checking out the Lexus I mentioned in an earlier post on this thread. It is not the most economical hybrid by a long way, and I wasn't serious about getting one (very wishful thinking), but the technology is amazing, and it has the performance to embarrass a number of high end V8 saloons (and do it very economically in comparison) plus the usual Lexus luxury and loads of other non engine related hi-tech. It's got some amazing reviews and picked up awards all over. I'd love to take one for a spin. I imagine it would feel like driving an Audi with CVT but quieter and faster.

[Naam]

Slightly off topic

I spotted a GMC Suburban with a “E100 Ready” metal badge about a month ago in the most unlikely place….Saudi Arabia

crazy Sa'udis do exist. i speak based on six years experience

[guava]

crazy Sa'udis do exist.

I hereby nominate you for "Under-statement of the Year 2008". Looks like the comp is over this year.

[jayjayjayjay]

Nornmally Volvo only sells 50 cars a year, that would be one for each planned station.

"60% of Thai motorists will switch to E85" - there's not a single E85 vehicle on the market yet and conversion costs more than some second hand cars. Not to mention that they don't have anywhere near enough ethanol and refineries.

New heights in optimism, perhaps.

Plus is that researched data you have? I recall significant gov approvals of ethanol plants around 2 years ago, a lot of these should be comming on line very soon. I dont mind you being critical, but in the face of global warming, what would you suggest as a better approach. Plus for PM would be a joke!

I didn't research Volvo sales, probably closer to 700 cars a year.

Ethanol plants were build to satisfy E10 demand, not E85. Do you need to run a research to understand that it's not enough.

Actually the current overcapacity in ethanol production is due to low prices, not lack of demand. If they sell their ethanol at market price, no one would buy it at the pump.

Same will go for E85, I suppose. The only real benefit of switching to ethanol is lowering oil imports for the coutnry, not that it's cheaper - and this is the main problem they are going to face.

They should speed up eco-cat project and start local hybrid car production in parallel.

Only few carmakers build E85 compatible engines, and none of them are Japanese, afaik, so they have to be developed from the ground up. Volvo and others can import a few cars or even import parts and assemble them here, but their sales volume won't make even a dent in overall consumption.

Then why does Brazil have a system that works? E85 is an important component of Brazil's non import strategy. E85 and FFV use is wide spread and successful. Ethonal capacity in Thailand may not provide the entire market if ALL cars were to be E85 compatible in next year, but that is not the case, neither is it the expectation of the departments introducing this new policy. At least it is a step in the right direction.

Your claim that Ethanol would not sell is a strong one. What is the cost of ethanol. My calculations are ethanol should be no more than 20 baht per litre based on using local tapioca and sugar. Anything above this would be tax. This may not have been competative when fuel was $30 USD a barrel, but that is not the case now and is not likely to ever be again, probably EVER. $140 a barrel!!!!!!

And to say changing to Ethanol has only one benefit is ridiculously nieve "The only real benefit of switching to ethanol is lowering oil imports for the coutnry". At least the fuel is comming from a plant source, it's renewable and closer to carbon neutral than hydrocarbon fuel sources! It is basically carbon neutral depending on the botanical used. If you think electric motors are the only way to go, well think again, where does electricity come from!!!!!!! There has to be a fuel source to create it. In the case of a hybrid, a slave engine has to burn fuel to create the electricity. In the case of having an electric vehicle sitting at home, electricity at the power point doesnt just magicly appear there! Chances are the power electricity to your house is your states highest green house carbon dioxide contributor. But if you think nuclear is the electric answer, "dream on" especially in Thailand!!!!!!!!!

[jayjayjayjay]

Nornmally Volvo only sells 50 cars a year, that would be one for each planned station.

"60% of Thai motorists will switch to E85" - there's not a single E85 vehicle on the market yet and conversion costs more than some second hand cars. Not to mention that they don't have anywhere near enough ethanol and refineries.

New heights in optimism, perhaps.

Plus is that researched data you have? I recall significant gov approvals of ethanol plants around 2 years ago, a lot of these should be comming on line very soon. I dont mind you being critical, but in the face of global warming, what would you suggest as a better approach. Plus for PM would be a joke!

I didn't research Volvo sales, probably closer to 700 cars a year.

Ethanol plants were build to satisfy E10 demand, not E85. Do you need to run a research to understand that it's not enough.

Actually the current overcapacity in ethanol production is due to low prices, not lack of demand. If they sell their ethanol at market price, no one would buy it at the pump.

Same will go for E85, I suppose. The only real benefit of switching to ethanol is lowering oil imports for the coutnry, not that it's cheaper - and this is the main problem they are going to face.

They should speed up eco-cat project and start local hybrid car production in parallel.

Only few carmakers build E85 compatible engines, and none of them are Japanese, afaik, so they have to be developed from the ground up. Volvo and others can import a few cars or even import parts and assemble them here, but their sales volume won't make even a dent in overall consumption.

Then why does Brazil have a system that works? E85 is an important component of Brazil's non import strategy. E85 and FFV use is wide spread and successful. Ethonal capacity in Thailand may not provide the entire market if ALL cars were to be E85 compatible in next year, but that is not the case, neither is it the expectation of the departments introducing this new policy. At least it is a step in the right direction.

Your claim that Ethanol would not sell is a strong one. What is the cost of ethanol. My calculations are ethanol should be no more than 20 baht per litre based on using local tapioca and sugar. Anything above this would be tax. This may not have been competative when fuel was $30 USD a barrel, but that is not the case now and is not likely to ever be again, probably EVER. $140 a barrel!!!!!!

And to say changing to Ethanol has only one benefit is ridiculously nieve "The only real benefit of switching to ethanol is lowering oil imports for the coutnry". At least the fuel is comming from a plant source, it's renewable and closer to carbon neutral than hydrocarbon fuel sources! It is basically carbon neutral depending on the botanical used. If you think electric motors are the only way to go, well think again, where does electricity come from!!!!!!! There has to be a fuel source to create it. In the case of a hybrid, a slave engine has to burn fuel to create the electricity. In the case of having an electric vehicle sitting at home, electricity at the power point doesnt just magicly appear there! Chances are the power electricity to your house is your states highest green house carbon dioxide contributor. But if you think nuclear is the electric answer, "dream on" especially in Thailand!!!!!!!!!

For all to see, over the next six months I will, along with a Thai construction friend, set up a home ethanol producing unit(approx 30-40 litres a day). We will use tapioca and sugar cane from local Lampang production. The "still" will be a design I have sourced from the US which has been refined over 20 years of use. Our plan is to make E85 ourselves. I will do what i can to relate our experience. He drives an E240 which unfortunately is not the correct Merc for the job. We will see what might need to be done to convert it across to E230/E240 specification which are E85 ready cars. If not I'll see if he will swap the E240 for an E230!!! It's planned to be a bit of fun. My friends land will be used as I think it's a bit risky as we have not covered all laws regarding home distilling etc, so the legal side will be his risk. Will keep you informed from time to time if we can make this work.

[astral]

The only real benefit of switching to ethanol is lowering oil imports for the coutnry" .

At least the fuel is coming from a plant source, it's renewable and closer to carbon neutral than hydrocarbon fuel sources!

Isn't this one of the reasons why food prices, particularly staples like grain and wheat, are rising?

[Plus]

I don't know about Brazil, but in the US ethanol production has a significant effect on food crop prices. News about it pop up everywhere, I even saw a CNN report from Mexico where poor people can't afford tacos anymore because all the corn is fed to the cars.

Recently there was a global UN conference on the subject and everyone agreed that there's an effect, they just disagreed how severe.

[Tony Clifton]

The answer is green cars? More and more and more cars?

So, finally we know that man`s collective stupidity will go as as far as starving himself, or a major part of the population (the useless eaters that will never be able to afford a car), in order to grow fuel to quench those thirsty engines.

It`s already done at the individual with way too many spending way too much on a vehicle that eats up more than what could cover for essential living expenses already, similar collective behaviour is unstoppable until a truly efficient and revolutionary alternative is found.

Then again, when multinationals and other groups are stacking the deck, we could wait a looong time.

The only thing that can save us for now is the exposure of some serious scandals and in-your-face manipulation in the oil industry.

Edited June 16, 2008 by Tony Clifton