Biomass ventures in Thailand

Biomass as a source of renewable energy in Thailand


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Abundant resources: Biomass produces renewable energy from plants. When biomass is burned, the chemical energy in biomass is released as heat. Biomass can be burned directly or converted to liquid biofuels (bioethanol) or biogas that can be burned as fuel. Thailand is an agricultural country. A significant amount of agricultural waste is left after harvesting and can be used as biomass energy. Thailand intends to utilize these abundant biomass resources.

Green but not clean: Other than solar and wind power, biomass is renewable but not clean energy. Smoke and ash from the burning biomass and the air pollution associated therewith are adverse side-effects which should be taken into consideration when choosing the location of the site. Besides, roads could be damaged by trucks transporting renewable materials, mainly husks from grain mills and chipped wood, to the biomass power plant. Other environmental concerns include noise and wastewater.

Locations: Thai biomass power stations – or the co-generation of heat and power – exist in Chiang Rai, Lopburi, Chachoengsao, Ubon Ratchathani, Siriwattana, Surin, Roi Et, Chumphon, Yala, and Trang. The government announced to continue to promote biomass power plants in the Deep South (Yala, Pattani, Narathiwat) with a total capacity of 300MW as it aims to solve power shortages.


Status quo: Thailand’s electricity production by biogas is reported with MW 1,959.95 in 2012, MW 2,320.78 in 2013, MW 2,451.82 in 2014, MW 2.812 in 2016. The values for heat-generating are ktoe 4,346.00 in 2012, ktoe 4,694.00 in 2013 and ktoe 5,144.00 in 2014. In the year 2014, biomass as renewable energy had the highest share of heat production (89% of the thermal energy produced from all renewable energy).

Biomass development plans: The latest version of the PDP 2018-37, approved in late January 2019 by the National Energy Policy Council, is set to limit the power capacity for biomass to a quota of 3,376 MW by 2037. However, in July 2019, Thailand’s Ministry of Energy has amended its Alternative Energy Development Plan (AEDP) 2018. Under the 2019 version of the AEDP 2018, electricity generated from biomass energy sources will be fed MW 5,786 into the national power grid.

Recycled Energy Asia 2020: The combination of 6th Biomass & BioEnergy Asia and Waste-to-Energy Asia 2020 will take place on February 19-21, 2020 in Bangkok. More information will be available soon. <Conference Link>

Types and classification of biomass in Thailand

Nine types: In Thailand, the maximum potential for biomass bases on nine types of plants, that are rice, sugar cane, corn, cassava, palm crude oil tree, rubber tree, soybean, mung bean, and peanut. Such biomass is delivered as agricultural waste, remaining material in factories. It is used as fuel to produce both electricity and thermal energy.

Three groups: Eights species are classified as Group 1 biomass: (i) rice husk. (ii) bagasse. (iii) cob corn, (iv) palm fiber, (v) palm shell, (vi) rubberwood swarf, (vii) rubberwood slab, and (ix) wood chips and sawdust The Biomass Group 2 consists of (i) rice straw, (ii) cane leaves and tops, (iii) cassava roots, (iv) leaves and stalks of corn, (v) stump and root of rubberwood branches, (vi) leaves and stems of soybean beans, (vii) leaves and stems of mung beans, and (viii) leaves and stems of peanut beans. Finally, Biomass Group 3 consists of palm trunk and palm leaves.

The legal framework for foreign investments in biomass power stations

The development of a biomass facility requires comprehensive legal project management with respect to the following legal aspects:

#1. Corporate structure: Operating in the biomass industry requires a Thai company. Typically, even in case of foreign investment, a Thai partner is involved as a shareholder to act as a bridge to the Thai stakeholder, especially the biomass suppliers.

#2. Investment promotion: Thailand’s Board of Investment (BOI) promotes the production of electricity or steam from renewable energy, such as biomass by an 8-year tax holiday, exemption of import duty on machinery, raw or essential materials used in manufacturing export products. Non-tax incentives are, above all, 100% foreign ownership, permission to acquire land ownership and the authorization to bring skilled workers and experts to work in Thailand.

#3. Land and building: Several legal and business parameters depend on the particular location of the biomass facility. The facilities can be built under a turnkey contract as described at “Lump sum turn-key contracts in Thailand“.

#4. Licensing: The required licenses consist of one to perform electricity business, one to electrical power distribution systems, one to electrical power distribution, one to construct buildings and one to perform business on electricity-generating plants. Other licenses include a factory license under Thailand’s Factory Act. An Environmental Impact Assessment might be required as well, which is reviewed by the Office of Natural Resources and Environmental Policy and Planning (ONEP).

#5. Biomass supply chain management: The development of such supply chains makes it meaningful for a foreign investor to enter into a biomass facility as a joint-venture with a local Thai partner. While wind and solar radiation will be free forever, the costs of future biomass are subject to market conditions and reliability of supply can be much better secured by a Thai partner. Long-term waste supply agreements have to be carefully negotiated and agreed upon.

#6. Power purchase agreement: Under the Power Development Plan PDP 2018-37, Biomass resources have a quota of 3,376 MW only. In 2016, a FIT bidding scheme was implemented for biomass projects. As of today, public tender procedures will probably request SPP hybrid firm PPA agreements which require the combination of biomass with another renewable energy source. Biomass PPAs typically have a duration of twenty years.

Players list for industry stakeholders

Are you considering to develop, acquire or sell sooner or later a biomass project in Thailand? Can you offer long-term waste supply agreements? Register for the Players List curated by PUGNATORIUS Ltd. to enable a business matchmaking with other stakeholders in Thailand’s biomass industry or foreign investors interested in the Thai biomass markets.

Your handpicked project is put in front of the right business partner for the highest caliber opportunities. Real projects, real investors creating real transactions. The law firm will contact you only for a specific business opportunity. No marketing messages, no service offers, no newsletter, no spam.

Professional services offer

PUGNATORIUS Ltd. is the Bangkok-based specialist provider of legal services and tax advice on foreign investments in Thailand’s manufacturing and service industries as well as property acquisitions and developments. Sophisticated solutions in a complex legal environment. Serious legal and tax advice in the land of smile.

Renewable energy projects are one of the law firm’s areas of competence, long-standing experience, and unique market reputation. With respect to biomass projects, the Bangkok law firm offers a legal memorandum regarding

  • Market entry considerations for investments in Southeast Asia
  • Legal requirements and the regulatory framework for biomass projects in Thailand
  • Foreign investment opportunities in Thailand’s biomass markets
  • Investment promotion by Thailand’s Board of Investment
  • Legal aspects of location selection and timing for a Thai biomass venture

Comprehensive professional support for the follow-up steps is available and details are provided on request.


Disclaimer: A little knowledge is a dangerous thing. This low-resolution high-level outlook constitutes neither legal advice, nor an attorney-client relationship, nor equips with the insights, tools or skills to do this without the Bangkok investment law firm.

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