GS Caltex is aiming to commercialize biobutanol as a renewable fuel for cars that could be used as a substitute for gasoline later this year, market insiders in the oil refinery industry said Wednesday.

The company has reportedly set the launch for the fourth quarter of 2013. It is operating a factory which has the capacity to produce biobutanol from sugar or wood under a joint research project with the Korea Advanced Institute of Science and Technology.

The launch of the factory’s commercial operations would make it possible for GS Caltex to offer biobutanol at a price 120 percent lower than the current price of biobutanol, which is three or four times higher per liter than that of gasoline.

Gasoline prices range between 1,900 won ($1.74) and 2,000 won per liter nationwide.

Biobutanol is an alternative fuel produced from biomasses such as sugar, starch, straw or wood. It can be used as a transportation fuel in vehicles with internal combustion engines without any additional modifications.

Whenever gasoline prices spiral, biobutanol’s marketability becomes quite high, according to refiners.

Of the four refiners in Korea, GS Caltex and SK Innovation launched their projects to develop biofuels in 2007 and 2008, respectively.

S-Oil and Hyundai Oil Refinery reportedly have yet to map out such projects.

By Kim Yon-se (kys@heraldcorp.com)