There is an increasing need to adopt the concept of supply management by the developing contries under which the supply of agricultural products in the domestic and external markets is regulated in order to increase the price of the commodities. For this, alternative uses have to be developed for diverse food produces including palm and coconut oils. In Thailand, the export earnings from agricultural products fall short of the outgo on the import of petroleum. As the non-renewable oil reserve is likely to get exhausted within the next 40-50 years, it is important lo make use of the renewable carbohydrate case for satisfying the future cnergy needs. In this regard, the progress made in that use of biofuel by many developed countries is an indication of the possibility to replace 80% of the transportation fuel with renewable resources by 2050. While about 68% of the ethanol produced in the US and Brazil is used as fuel for vehicles, more than 90% of the production in Thailand ends up in drinks. Biofuel usage as an alternative lo petroluem in urban transport has to be promoted in Thailand with a view lo reducing the security risk associated with the reliance on imported petroleum. This is also the cheapest method lo bring down the level of air pollution from vehicles in Bangkok and also to reduce the emission rates of green house gases. Presently, Thailand imports about 7.50.(H)0 barrels/day of crude oil which puts the country in real difficulity during economic hardship. This situation warrants the integration of all efforts towards biofuel development