1. INTRODUCTION
Thailand imports a significant amount of oil to meet domestic demand. The ratio of the country’s crude oil import to crude consumption stands at a high level (92% in 2000 [1]). Not only does oil consumption cost the country a huge amount of foreign currency via oil import bills but also contributes to environmental degradation. In that context, domestically produced ethanol has emerged as a potential substitute for conventional gasoline, most likely effective in both fossil oil savings and pollution mitigation. In Thailand, though the promotion for ethanol to enter the energy market had started in the past 20-30 years, its popularity was first recognized in 2001. With the government’s biofuel policy, ethanol is being distributed to consumers in the form of gasohol, a mixture of ethanol and gasoline at a ratio of 9:1. Quite confident about abundant sources of raw materials for ethanol production, the Thai government has launched a project to replace gasoline with gasohol nationwide by January 2007 [2]. Ethanol can be made from a wide spectrum of agricultural commodities, of which, sugar cane, cane molasses and cassava are of importance in Thailand. At present, ethanol in the country is mainly produced from molasses. However, the main disadvantages of molasses-based ethanol lie in supply versus demand and seasonal operation. Recently, after molasses-based ethanol producers raised their product’s prices to cope with sharp increased feedstock prices, cassava-based ethanol becomes an attractive commodity for Thai oil traders. The focus of this study is on the costs of producing ethanol from cassava, in comparison with gasoline, based on a life cycle approach. At present, it seems that without government subsidies ethanol cannot compete with gasoline in terms of price. However, improved cassava yield and co-product market development would favor ethanol’s potential to substitute for gasoline in the long term. In addition, this renewable energy source could provide a stable market for cassava farmers to sell their product as well as contribute to environmental and energy policy goals. Life cycle cost is an important tool for policy makers to assess whether an energy alternative like ethanol is feasible and practical in terms of cost. Moreover, it highlights specific areas where further technological advance and/or strategic policy could yield improvements, eliminating economic barriers.