Ethanol plans still lack spark

Obstacles are slowing ambitious government plans to introduce ethanol fuel across seven cities
and provinces by the end of this year

Deputy Minister of Industry and Trade Cao Quoc Hung last week said that large petrol dealers, including Petrolimex and PVOil, an arm of the state-run PetroVietnam, had already prepared facilities for selling the ethanol fuel in seven cities and provinces since the beginning of this year.

“Bio-fuel products should be promoted to diversify national energy sources,” said Hung

According to the roadmap approved by the government in 2012, the use of bio-fuels will begin in December 2014 in seven cities and provinces of Hanoi, Ho Chi Minh City, Haiphong, Danang, Can Tho, Quang Ngai and Ba Ria-Vung Tau. By December 2015, the fuel is planned to be used nationwide.

Nguyen Sinh Khang, deputy director of the state-run PetroVietnam which is currently the major producer of the ethanol fuel E5 for the entire country, said that it had set up five filling stations and four storage locations for ethanol fuels and upgraded 570 stations to serve the public.

PetroVietnam is an investor in three bio-fuel factories located in Quang Ngai, Binh Phuoc, and Phu Tho provinces which will have the combined capacity of 300,000 cubic metres per year.

Petrolimex chairman Nguyen Ngoc Bao also claimed that most of Petrolimex stations were already ready to sell ethanol fuels.

However, to date, only three out of the country’s 10 petrol dealers have sold bio-fuels at 169 petrol stations, out of 13,000 retail points throughout the country. The consumption of bio-fuel is also estimated at one-eighth of the consumption of traditional fuels.

Khang said that one of the main difficulties that had prevented enterprises from investing in bio-fuel stations was the high cost for converting petrol stations to selling bio-fuels. So the price of bio-fuels remained a few hundred Vietnamese dong per litre higher than other petrol products.

Khang suggested the Vietnamese government and the Ministry of Industry and Trade should adopt long-term policies for firms investing in the sale of bio-fuels, including exemptions on import taxes for equipment and materials that domestic firms could not yet produce.