What's green and duty-free?

The cabinet today took a major step to encourage the use of ethanol, by drastically lowering the import duties for so-called green cars made abroad, so long as they use E85 fuel - 85 per cent ethanol and just 15 per cent gasoline.

Pannee Sathavarodom, director-general of the Ministry of Finance's Fiscal Policy Office, the government also wanted to promote greater use of alternative energy across the board, to try to cut crude oil imports.

Ministers voted to approve his plan to waive tariffs on green cars for the next three years.

Thai auto factories plan to start making cars that burn E85, but not before next year at the earliest. The fuel is to be sold by the third quarter at many service stations.

Excise taxes for E85 vehicles will be lowered to 25, 30 and 35 per cent for cars with engine capacities not exceeding 2,000cc, 2,500cc, and 3,000cc 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 2.5795 baht per litre of engine displacement from the current 3.685 baht.

Meanwhile, Energy Minister Poonpirom Liptapanlop said she would confer with European and Japanese E85 car manufacturers as well as with state-owned PTT and Bang Chak Petroleum sellers 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. (BangkokPost.com, TNA)