Vietnam plans to boost ethanol production despite poor local demand

Due to a lack of market demand at home, PetroVietnam announced that it will increase exports of ethanol fuels. Nguyen Anh Toan, deputy director of PetroVietnam Oil (PV Oil), a group subsidiary, said that last year, PV Oil sold only 20,000 cubic meters of ethanol though its150 dealers in 40 cities and provinces across the country. When the Vietnamese government released a plan for developing the biofuel market through 2015 and beyond to 2025, PetroVietnam invested US$ 270 million and established three ethanol plants in Binh Phuoc, Phu Tho and Quang Ngai provinces with a combined capacity of 300,000 cubic meters per year. Toan estimated that without a more aggressive roadmap, the country’s annual ethanol consumption within the next few years will reach only 100,000 cubic meters. In 2007, the government initiated a plan to develop the biofuels market but despite being cheaper by around VND 500 (US$0.02) per liter than conventional A92 petrol, consumers have not patronized ethanol-based fuels. A more definite roadmap is currently being drafted by the Ministry of Industry and Trade which will require drivers in major cities to use E5-blended petrol by the end of next year. Included in the pilot program are Hanoi, HCM City, Hai Phong, Da Nang, Can Tho, Quang Ngai and Ba Ria-Vung Tau. The government envisions that by 2015, the use of biofuels will be made compulsory throughout the country. According to the ministry, there are 13 projects registered to produce ethanol-based fuels. Five plants are expected to begin operations this year. (May 23, 2012)