Producers of bio-fuel E5 are concerned about sales as Vietnamese consumers have been ignoring the environmentally friendly fuel.
According to a recent report, only two out of 10 customers are choosing to use bio-fuel. Most of the Vietnamese-made biofuel has to be exported to China.
Luu Quang Thai, chairman of Dong Xanh Joint-Stock Company, which owns an ethanol plant in central Quang Nam Province, said the company planned to export 50 per cent of its bio-fuel E5, and the rest would be sold domestically.
However, there are only a few retail outlets for the fuel in the country, and more than 90 per cent of the bio-fuel has to be exported.
Thai told Tuoi Tre newspaper that the bio-fuel could not be sold independently like fossil fuel. The trade relies on the current fuel retail system.
The Petrol Viet Nam Oil Corporation (PV Oil), which began selling the fuel in August last year, has 106 stores that pump bio-fuel E5 in Viet Nam.
They have been selling the fuel at all of its fuel stations this year.
Petrolimex, which has 60 per cent of domestic oil market share, does not have a plan to distribute the fuel, so ethanol makers are worried that their product would not sell well in the domestic market.
The country’s four ethanol-producing plants have a capacity of 320 million litres each year.
PetroVietnam is investing in three other plants in Phu Tho, Quang Ngai and Binh Phuoc provinces. The plants have an annual production capacity of 300 million litres of ethanol.
Many fuel enterprises are not being eager to distribute bio-fuel E5 because they have to spend a lot of money on upgrading.
Le Xuan Trinh, of PV Oil, said the company was building three blending stations that have a capacity of 280,000 cubic metres of fuel each year.
The total investment of the three warehouses is VND19 billion (US$904,761). Other expenses to upgrade the pumping stations amount to VND20 million ($952).
The Ministry of Industry and Trade has asked the Government to make the use of ethanol fuel mixtures compulsory, such as E5 and E10, in Ha Noi, Hai Phong, Da Nang, Quang Ngai, Ba Ria – Vung Tau, HCM City, and Can Tho from July 1, 2013, and the entire country by 2015.
PV Oil has also asked the Government to decide on whether E5 should be a compulsory fuel nationwide.
The Government has identified the production of bio-fuel as a pivotal industry to ensure energy security, environmental protection and reduction of dependence on fossil fuels.
Making bio-fuel from sliced cassava is also an effective solution to replace fossil-fuel energy sources.
Viet Nam still needs a stronger legal framework to stimulate biofuel production, experts say.
