Vietnam to Roll Out E5 Nationwide

Vietnam plans a nationwide implementation of E5 or fuel blend with 5 percent ethanol for all motorized vehicles in 2015, starting with seven cities and provinces from December 2014.

E5 was released on the domestic market in August 2010, but sales have not picked up as expected. Despite the increase in number of biofuel producers in Vietnam, slow distribution has hampered sales. The Ministry of Industry and Trade reported that the production, distribution and use of biofuels face many challenges, including high production costs, slow development of distribution systems and customers' preference for traditional fuel.

The ministry said at the end of 2012, Vietnam had six plants producing biofuel with a total capacity of 535 million liters per year. However, only 20 percent of the total output was used in the domestic market through the distribution of 175 petrol stations in 34 provinces. The remaining of 80 percent was exported to other countries at a low price.

The government is now studying how to address the challenges in the local biofuel industry.