Biofuel program: encouragement better than enforcement

VietNamNet Bridge – The government has decided that from December 1, 2014, E5 petrol would be the compulsory fuel for all kinds of vehicles used in seven provinces and cities. Meanwhile, scientists believe that the government should encourage people to use biofuels instead of forcing them to do that.

The Prime Minister on November 22 signed a decision stipulating the roadmap for vehicles throughout the country to use biofuels. After E5 petrol is used in seven provinces and cities, it would be used nationwide from December 1, 2015. From December 1, 2016, a similar roadmap would be applied to E10 petrol.

4-day output is big enough for whole-year sale

E5 petrol first appeared on the HCM City market in late 2010, when PV Oil, Petec and Saigon Petro opened 156 sale points nationwide. However, despite its great advantages, the sales of the biofuel have been going very slowly, while customers keep indifferent to the new kind of fuel.

Explaining the low sales, the owner of a filling station said people still mistake ethanol, a kind of bioethanol for methanol, a kind of cleansing solvent which must not be added into petrol. People have turned their backs to biofuels after local newspapers reported a lot of motorbike explosion cases, believed to be caused by the bad fuels.

Meanwhile, some motorbike technicians have told their clients that the petrol with high ethanol concentration would harm some vehicle parts.

According to the Ministry of Industry and Trade, in the first nine months of 2012, only 15,000 cubic meters of E5 was sold, which was just enough to the 2.5 day output of the ethanol plant.

There are three ethanol plants which can put out 300,000 cubic meters of ethanol, which is enough to make 6 million cubic meters of E5 petrol a year. The output, according to expert, can satisfy 94 percent of the petrol demand in Vietnam in 2014.

Besides, Vietnam also has some 10 other ethanol plants of private investors which have the total capacity of 400,000 cubic meters per annum.

The current oversupply has forced domestic ethanol plants to export ethanol materials to the Philippines, South Korea and China, where biofuels are made.

Encouragement better than enforcement

Dr Nguyen Huu Nguyen from the Southern Economic Research Institute, said the government should analyze the current situation to find out the problems and encourage people to use biofuels, instead of stipulating that biofuels are a must.

“The government should subsidize E5 petrol in order to stimulate the demand, offer higher commissions to retailers. It should also encourage the E5 production by cutting the luxury tax by 50 percent, imposing the VAT and export tax rate of zero percent for five years. Why not?” Nguyen said.

Sharing the same view, Dao Nhat Dinh, a technical expert of the project on strengthening the capacity to remove the POP-group plant protection chemicals in Vietnam said though using biofuels is a growing tendency in the world, the government should not “give command,” but should encourage the use of the clean fuels.

However, it would be impossible to encourage people to use biofuels once the products are still expensive. At present, E5 petrol is just 100 dong per liter cheaper than normal petrol, which is not big enough to encourage the use of biofuel.

Dinh said in Thailand, octane 91 petrol is sold at 29,750 dong per liter, while the petrol with 10 percent of ethanol at 24,058 dong and petrol with 20 percent of ethanol at 22,320 dong, which means that people would get big benefits if they choose biofuels. Especially, the country does not apply any measures to force people use biofuels.


Vietnam, biofuels, environment, E5, encouragement, E10