Incentives to fuel demand for E85 cars

Incentives to fuel demand for E85 cars By The Nation

Published on June 20, 2008

Excise-duty cuts likely to encourage carmakers to launch cleaner models

E85 can provide the quickest, least expensive and most practical solutions to rising energy costs and environmental concerns, General Motors says.

The company, through its Chevrolet brand, along with Volvo and Ford, is asking the government for special privileges to offer E85 models in Thailand.

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

However, special privileges recently announced by the government appear similar to E20 vehicles, especially in the excise duty structure, where there is a 5-percentage-point reduction across the board.

According to a Cabinet resolution, the privileges for E85 vehicles are as follows: Cars with engines under 2,000cc will attract 25-per-cent excise duty, down from 30 per cent. Cars with engines between 2000cc and 2,500cc will attract 30-per-cent excise duty, down from 35 per cent. And cars with engines between 2,500cc and 3,000cc will attract 35-per-cent duty, down from 40 per cent. 

Meanwhile, the excise duty on gasohol E85 will be lowered from Bt3.6850 per litre to Bt2.5795 per litre and the import duty on components required to make an engine E85 compatible is to be lifted for three years.

This will cause the retail price of E85 vehicles to drop by about Bt150,000.

General Motors Southeast Asia Operations and Chevrolet Sales (Thailand) president Steve Carlisle said the company and other carmakers are advocating E85 as a cleaner, more reliable option with lower greenhouse-gas emissions. Ethanol is also a significantly less expensive source of energy that can help Thailand's economy grow while providing new jobs, improving the environment and addressing national security concerns.

Currently, Thailand imports 87 per cent of its petroleum. Of that, 80 per cent is used in the transport sector, he said. 

In 2001, Thailand began its renewable-fuels journey by introducing 10-per-cent ethanol-blended petrol.

Chevrolet has implemented a few alternative-fuel technologies such as compressed-natural-gas versions of the Optra sedan and the Colorado pickup truck in Thailand.

Energy Minister Poonpirom Liptapanlop, said incentives offered for E85 were adequate to start the E85 drive, but they could be improved in the future if necessary.

She said E85 vehicles, which can run on various types of fuel ranging from E10 to E85 gasohol, would attract buyers looking for alternatives to regular unleaded petrol.

At a glance

excise Duty on e85 cars:

-- Engines under 2,000cc: 25 per cent (down from 30 per cent earlier).

-- Engines from 2,000cc to 2,500cc: 30 per cent (down from 35 per cent).

-- Engines from 2,500cc to 3,000cc: 35 per cent (down from 40 per cent).