Regulations

Vietnam to switch to 500 ppm sulfur diesel fuel in January 2016

Vietnam will ban diesel fuel containing 2,500 parts per million (ppm) or 0.25% sulfur, and will switch to 500 ppm or 0.05% sulfur, starting 1 January 2016, according to a government statement.

High levels of sulfur in diesel fuel are harmful for the environment because they prevent the use of catalytic diesel particulate filters to control diesel particulate emissions.

Several countries in Asia, including Bangladesh and Sri Lanka have recently switched to 500-ppm sulfur, which leaves only Pakistan and Indonesia with sulfur content above 500 ppm.

Vietnam, which consumes around 120,500 barrels per day (bpd) of diesel fuel, mostly produces 500 ppm. It imports diesel fuel with higher content primarily from China, which is used for water transport. About 60% of the Dung Quat refinery’s production is the lower sulfur grade, but about half of its production is sold at the price of the higher sulfur grade, which is about 50 dong or 1 U.S. cent cheaper, because the local market is price sensitive. By totally eliminating the higher sulfur grade, the local market will be forced to switch to using only one grade.

The Ministry of Science and Technology and the Ministry of Industry and Trade conducted an informal survey among local importers and major oil consumers in January to raise awareness about the impending change.

Among Vietnam’s major importers, Petrolimex has already switched to 500 ppm, while Saigon Petro and PV Oil still import 2,500-ppm diesel fuel.

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