Vietnam considers incentives for gasohol E5

Vietnam plans to offer more incentives to stimulate local consumption of clean fuel. Recipients of the new incentives would be biofuel producers, distributors and traders. Demand for ethanol from local fuel wholesalers has been low, prompting many refineries to export most of their products to China. In an interview with the Tuoi tre newspaper, Nguyen Phu Cuong, vice head of the Department of Sciences and Technology under the Ministry of Industry and Trade, said, ”By the of end-2010, as many as 13 enterprises had registered to produce ethanol with the peak annual capacity of up to 300-400 million liters. However, only two facilities owned by Tung Lam Co. (in Dong Nai province) and by Dong Xuan Co. (in Quang Nam province) was put into production. Others are under equipment installation.” Luu Quang Thai, chairman of Dong Xanh Co., said that the company’s Dai Loc ethanol refinery, with an annual capacity of 25 million liters, was operational in April and produced gasohol E5, which is gasoline mixed with 5% ethanol. But since the company does not own filling stations, and with poor domestic demand for the fuel, Dong Xanh had to export 90% of its total gasohol E5 production. PetroVietnam Oil Corp. has been selling gasohol E5 since August 2010 through its 106 stations nationwide. It plans to distribute gasohol E5 through all its fuel stations by the end of this year, but this is not enough to ease the concern of ethanol producers because the country’s biggest fuel distributor, Petrolimex, has no plans of distributing gasohol E5. Petrolimex holds 60% of the market share in Vietnam. Many fuel distributors refuse to sell gasohol E5 because of the required change in equipment; and other dealers said they would have to spend large amounts for the construction of infrastructure needed for mixing ethanol with gasoline.

Benefits of using gasohol E5

Fuel experts say that the consumers and the economy would benefit from the complete synchronization of the biofuel market. A liter of gasohol E5 is VND200 (US$.0095) cheaper than A92 gasoline. The use of gasohol E5 would help the country save on fuel imports, which could amount to hundreds of millions of dollars, and CO2 emissions would also be reduced by as much as 30%. Clean fuel is also deemed the appropriate replacement for gasoline because of the dwindling reserves of oil and coal. A draft from the Ministry of Trade indicates that the use of gasohol E5 in Vietnam would most likely be made compulsory beginning January 1, 2015. (November 23, 2011)