A Feasibility Study of Investment on Sustainable Aviation Fuel Using Alcohol-to-jet Synthetic Paraffinic Kerosene (ATJ-SPK) Technology for Thailand

Abstract

The study aimed to: 1) Market Feasibility Study, (2) Technical Feasibility Study, and (3) Financial Feasibility Study of investment on sustainable aviation fuel using alcohol-to-jet synthetic paraffinic kerosene (ATJ-SPK) technology for Thailand, The research methodology involved primary data collection through in-depth interviews and secondary data obtained from relevant government and private sector documents. The data were analyzed using descriptive and quantitative methods, including financial tools that incorporate time value of money adjustments. The results revealed feasibility across all three aspects. In terms of market feasibility, the global sustainable aviation fuel market is expanding rapidly, driven by policies and mandates such as ReFuelEU Aviation. However, the current production growth remains insufficient to meet the projected demand of 449 billion liters by 2050. In terms of technical feasibility, the production technology is proven at an industrial scale, requiring an initial investment of 10,419,992,067 Baht and annual operating and production costs of 1,656,363,682 Baht. Additionally, domestic ethanol feedstock is sufficiently available. In terms of financial feasibility, assuming a 25-year project lifespan and a Weighted Average Cost of Capital (WACC) of 9.23%, the project yields a Net Present Value (NPV) of 30,124,462,544 Baht, a Profitability Index (PI) of 3.89, an Internal Rate of Return (IRR) of 29.38%, and a Modified Internal Rate of Return (MIRR) of 15.33%, indicating strong investment potential. However, the high returns are largely due to sustainable aviation fuel prices being approximately three times higher than fossil-based aviation fuel. Therefore, even if the market-driven price decreases from the current average of 67.96 Baht/liter to 57.16 Baht/liter, the project would remain financially viable.