Such a comical situation has been the case in Thailand for quite a while. E85 fuel - a mixture of 85-per cent ethanol and 15-per-cent petrol - has been available for the past few months, although there have been no cars that can use it. Now, however, Volvo Thailand has launched the first locally produced E85 flex-fuel vehicle.

The S80 2.5 FT is the first car available here that is made locally and can use any fuel ranging from 91- and 95-octane petrol to E10, E20 and E85. The vehicle is priced at Bt3.1 million and is expected to attract those who would like to not only 'go-green' but also lower their fuel costs.

The company will also have on sale the C30 1.8 E85, but this comes in fully imported form and is only available with a manual gearbox. The C30 will be a cheaper option for those willing to go green, with a price tag of about Bt1.9 million.

PTT has just two pumps and Bangchak only one in operation that sell E85 fuel. PTT said it would increase that number to 15 by next year, while Bangchak hopes to open up three to five more pumps.

"Although having more E85 pumps will allow the user to take full advantage of the vehicle, it is important to remember that a flex-fuel vehicle can run on any blend of petrol and ethanol or even pure petrol, which makes it very versatile. The Volvo S80 2.5 FT is an option for companies that want to acknowledge their environmental responsibility, as E85 produces 60 to 70 per cent less greenhouse gas than petrol," said Paul Stokes, president of Volvo Cars Thailand.

The company has stopped production of the standard petrol version of the S80. A total of 150 units have been produced for this year and the company hopes to sell 300 S80 2.5 FTs in 2009. This will constitute to 30 per cent of Volvo's overall sales.

Other models in foreign markets that have E85 technology are the S40, V50 and V70, which Volvo will consider here depending on the S80 2.5 FT's success.

"Besides being greener, opting to use E85 fuel also means supporting the national economy of Thailand as ethanol comes from sugar cane, which is locally produced. Oil on the other hand has to be imported from other countries. Ethanol is one of the smartest fuel choices for Thailand, as it will support agriculture," Stokes added.

Volvo has a competitive edge over other premium brands like Mercedes-Benz and BMW, as the company is a global leader in E85 technology.

Energy Minister Wannarat Charnnukul said: "The government has a major policy to promote the use of alternative energy, no matter what happens to the oil price. The higher mixture of ethanol in petrol would reduce the country's reliance on crude oil imports and reduce the cost of living. It would also strengthen the country's long-term energy security and the economy."

Mitr Phol, the largest ethanol producer, said it would increase production next year to 600,000 litres per day from 400,000.