Vietnam invests in a biofuels industry

VietNamNet Bridge – Vietnam is climbing on the biofuels bandwagon with government policies to encourage production of ‘green gasoline’ from cassava, coconut, sesame, peanut, flax and jatropha, and from animal products such as catfish fat.

Biofuel – a global trend

Many countries already manufacture large amounts of biofuels, especially in the US and Brazil. Once a big importer of oil, Brazil has substantially reduced its requirement thanks to biofuel development.

Some Asian countries are strongly investing in biofuels, among them Thailand, China and India.

Vietnam has now joined the game. The government has instructed ministries to give incentives for the production and use of biofuel, defined as fuel made from plants such as cassava, coconut, sesame, peanut, flax and jatropha, or animal products such as catfish fat.

Under the plan on biofuel development to 2015 with a vision to 2025, Vietnam will produce 1.8 million tons of ethanol and vegetable oils for use as fuel annually, meeting 5 percent of domestic petrol and diesel demand in the next 15 years.

There are about four million hectares of deforested hill country in Vietnam – including more than half the Central Highlands – which are considered to be suitable for growing jatropha curcas, the crop that many countries use for biofuel.  Jatropha has a high oil content, and can produce the feedstock for one to three tons of bio-diesel per hectare.

Experimental plantations of jatropha bushes, which grow in poor soils and have a life cycle of 30 years, are being established. The Dong Xanh Joint Stock Company is planting 30,000 hectares of jatropha in seven central provinces to supply its ethanol plant in Quang Nam.  Dong Xanh staff say that growing crops for biofuel and building processing zones will create jobs and help reduce poverty, while reforestation of the hillsides will limit the influence of climate change and prevent landslides.

Dong Xanh JSC’s ethanol plant, the first in Vietnam, began operation in August. Its annual capacity is 100,000 tons of biofuel a year. The plant is already working at 70-80 percent of its designed capacity, supplying ethanol to state-owned Petrolimex.  Its principal feedstock is cassava grown in Quang Nam and Binh Dinh provinces.

Petrolimex began selling bio-petrol (5 percent ethanol and 95 percent petrol) in August at filling stations in HCM City, Hanoi, Vung Tau, Hai Phong and Hai Duong and will add sales points in Da Nang, Hue and Can Tho this year.  The biopetrol is offered at 500 dong per liter less than normal gas.

Three more ethanol plants with capacities in the 100,000 tons per year range are being built in the centre and north. 

In Vietnam’s far south, refiners in Can Tho and An Giang are making bio-diesel from catfish fat, hitherto considered a waste material. The Mekong Delta factories currently process 30,000 tons of catfish fat each year.

The first plant producing biodiesel from catfish fat was inaugurated in the Mekong Delta city of Can Tho in early 2009, ran by Minh Tu Co., Ltd. This plant can produce 50,000 liters of biodiesel a day. The plant has exported its product to Singapore.

By the end of 2011, Vietnam will have five biofuels plants with a total capital of 365,000 tons of ethanol, which, mixed with gasoline, will yield 7.3 million tons of E5 petrol.

The legal framework

The legal framework for biofuel production and trading in Vietnam is nearly complete.  Biofuel has been designated a key industery and biofuel production projects enjoy the highest level of investment incentives.

According to Government planners, from 2007 to 2010, Vietnam will finalise a legal framework to encourage the production and use of biofuel, design the roadmap for using biofuels in Vietnam, learning biofuel technologies, training human resources for this industry, zoning and developing material areas for biofuel, build biofuel plants to meet 0.4 percent of the country’s need for petrol by 2010. This start-up work is basically on schedule.

In 2007, two national standards for bio-ethanol and bio-diesel were issued. In October 2008, the Ministry of Industry and Trade approved projects to grow trees as materials for producing biofuels, to develop technologies for producing biofuels, to design plans and policies to support the development of biofuels in Vietnam and to test and apply ethanol petrol in Vietnam.

In June 2008, the Ministry of Agriculture and Rural Development also approved a project to research and develop jatropha bushes in Vietnam.

The Ministry of Finance in 2007 and 2008 issued two circulars on state funding for biofuel development programs.

In 2009, the Ministry of Science and Technology issued two national standards on biofuels.

From 2011-2015, according to planners, Vietnam will begin to produce additives, enzymes and other materials for biofuels and expand their production, develop new varieties of high productivity, and expand biofuel plant capacity to satisfy 1 percent of the country’s need for petrol by 2015.

From 2016 to 2025, Vietnam will build an advanced biofuel industry that will produce 100 percent of the national requirement for E5 and B5 fuels, i.e., will provide five percent of the fuel needed to run the nation’s motor fleets.

Biofuels are a wide range of organic materials which are in some way derived from biomass and can be used to produce energy. The term covers solid biomass, liquid fuels and various biogases.

Ethanol is an alcohol made by fermenting the sugar components of plant materials and it is made mostly from sugar and starch crops. Using advanced technologies still under development, cellulosic biomass, such as trees and grasses, can also be used as feedstocks for ethanol production. Ethanol can be used as a fuel for vehicles in its pure form, but it is typically used as a gasoline additive to increase octane and improve vehicle emissions.

Biodiesel is made from vegetable oils, animal fats or recycled greases. Biodiesel can be used as a fuel for vehicles in its pure form, but it is usually used as a diesel additive to reduce levels of particulates, carbon monoxide, and hydrocarbons in emissions.

Biofuels in general have 70 per cent less CO2 emissions and 30 per cent less poisonous chemical emissions compared to petrol. Biofuel made from sugar has 89 per cent less CO2.

Compared to traditional fuel like coal and natural gas, biofuel produces less greenhouse gases, disintegrates faster and does less harm to water and land resources. It also causes less wear and tear on engines.

A United Nations Environment Programme report showed biofuels accounted for 1.8 per cent of transport fuel. Ethanol production tripled between 2000-07 and biodiesel production rose eleven-fold.

The UNEP report also said mandates to blend biofuel into fossil fuels for vehicles had been enacted in 17 countries by 2006, most requiring blending with 10-15 percent ethanol or 2-5 percent biodiesel.

Brazil exported 5 billion litres of ethanol in 2008. Its investment in biofuels rose to US$4 billion in 2007 and had most likely risen substantially since then.