Vietnam Revives Biofuel Plan for 2018

After failing to promote a locally-produced biofuel product in major cities, Vietnam has announced a national switch to biofuels.

The trade ministry will make sure the 92-octane gasoline A92, currently the most popular grade in Vietnam, is phased out and replaced by the greener E5 by 2018. The ministry has also ordered top state-owned fuel companies PV Oil and Petrolimex to promote the use of E5. Five percent of the said product is ethanol from cassava.

Vietnam had previously planned to make Hanoi, Ho Chi Minh City and some large cities switch to the fuel by the end of 2014. However, the product never caught on. Some industry insiders now believe that a national switch could be impossible. Fuel companies also said a complete switch to E5 also means investing in blending facilities which could cost a lot.

According to PV Oil, the domestic supply of ethanol is 150,000 tons per year, which is enough to produce around three million tons of E5. Government sources also said that two ethanol plants in the southern province of Binh Phuoc and the central province of Quang Ngai will resume operations soon, which would potentially increase supplies.

Retailers said the government should offer more tax incentives to widen that margin and make E5 more attractive.