Vietnam to complete switch to E5 biofuel by January 1, 2018

All cities and provinces in Vietnam will stop selling RON 92 gasoline (also known as A92) by the end of December and start selling 5% bioethanol (E5) across the country from January 1, the Ministry of Industry and Trade said this week.

E5 will be available at fuel stations along with A95 gasoline, which was lesser used than A92 before the phaseout.

The announcement comes despite doubts expressed earlier this year that smaller operators would be able to finance the switch from A92 to E5.

Industry figures pointed to the slow uptake of the biofuel among Vietnamese fuel retailers and consumers, since its limited introduction in the Asian country in 2014 but it has been dogged by largely unproven fears that it damages vehicles.

However, the government claimed on its website this week that retrofitting gasoline pumps at large and small fuel retailers had gone smoothly, and major refineries and bioethanol producers are ready for the switch.  

The move to E5, which the Vietnamese government says will help “ensure energy security and environmental protection” will involve domestic production of  20,000-30,000 cubic meters of bioethanol each month, Chinese news service Xinhua reported, citing the Vietnam Biofuels Association.

Domestic supply will come from three ethanol plants, one in central Quang Nam province and the two southern provinces of Dong Nai and Binh Phuoc, and will use mainly cassava feedstock.  

Earlier this year, Vietnamese online news service VietNamNet reported business leaders as saying that the supply of cassava would be required to keep pace with surging demand and the prices kept affordable to make E5 biofuel prices competitive with regular gasoline.

Amid forecasts that demand for bioethanol in Vietnam will exceed supply from early 2019 onwards, the Vietnamese government has been considering whether to lower import tax on bioethanol from 20% to 17%.

Most of these imports would be likely to come from Brazil and the US, given that China and Thailand have very little surplus ethanol to export.