Ethanol sales ready to kick into gear

The will follow the anticipated approval of a legalised bio-fuel sales framework later this year.

Nguyen Phu Cuong, deputy director of the Ministry of Industry and Trade’s (MoIT) Department of Science and Technology, said the MoIT had submitted the draft framework regulating the sale of bio-fuels in Vietnam to the government for approval.

“Under the framework, ethanol fuel will be permitted to be used in major cities and provinces across the country,” Cuong said.

Cuong did not specify the cities and provinces, but another MoIT draft proposal in May singled out Hanoi, Haiphong, Danang, Quang Ngai, Ho Chi Minh City, Ba Ria-Vung Tau and Can Tho for ethanol rollout.

According to the new draft, E5 gasoline sales will commence in those localities  from January 1, 2013, and expand to all other cities and provinces nationwide from January 1, 2015. The next generation E10 gasoline would be introduced in seven cities starting January 1, 2015 and nationwide from January 1, 2017.

Japan’s Itochu Corporation, which two years ago partnered with PetroVietnam Oil, a subsidiary of state-run PetroVietnam, to build  the  $80 million Orient Bio-Fuels facility in southern Binh Phuoc province, decried the delays in authorising domestic sales of  bio-fuels in Vietnam as damaging to the joint venture. The facility started commercial operations from spring 2012 using cassava, a well-grown crop in the region as feedstock, aiming production of around 100,000 kilolitres per year.

“We completed the project and put it into commercial operation several months ago. But we don’t have a market for this product,” Kohei Wantanabe, executive advisory officer of corporate administration of Itochu Corporation said in a meeting with the Ministry of Planning and Investment in July this year.

The ethanol produced by Orient Bio-Fuels was expected to be sold through gas stations of PetroVietnam Oil.

Cuong said the framework for sale of bio-fuels in Vietnam was considered as a remedy for biofuel producers. However,  the promulgation of those regulations may take time and strategies were needed to cope with the present conditions, he said.

Ethanol fuel is considered better for the environment than fossil fuels.  It  is said to make engines run more smoothly, increase engine power, decrease toxic gas emissions and help users save money.

Vietnam currently has two operating ethanol plants, both of which however have had to halt their operations.

In addition to the Orient Bio-Fuels, the  $28 million Dong Xanh plant in central Quang Nam’s Dai Loc district is expected to use 300,000 tonnes of cassava and produce 100,000 tonnes of ethanol, equivalent to 120,000 kilolitres per year. PetroVietnam is building two more bio-fuel plants in central  Quang Ngai and northern Phu Tho provinces with the combined capacity of 300,000 tonnes of ethanol per year.

 Delays in bio-fuel sales approval have also placed a burden on cassava farmers who produce the raw materials used by ethanol facilities.