Developing new era biofuels, towards sustainable energy future

(Chinhphu.vn) - Biofuel is considered a strategic solution, not only helping to reduce greenhouse gas emissions but also adding value to agriculture, promoting new industries and opening up opportunities for green economic development.

Minister of Industry and Trade Nguyen Hong Dien speaks at the workshop

This is the main content of the Workshop "Developing biofuels in the new era - Key tasks to create a sustainable fuel future for Vietnam" organized by the Ministry of Industry and Trade on the morning of August 27.

According to Minister of Industry and Trade Nguyen Hong Dien, the green energy transition to respond to climate change, reduce dependence on fossil fuels and ensure energy security is an inevitable trend. In that context, biofuels are considered a strategic solution, not only helping to reduce greenhouse gas emissions but also adding value to agriculture, promoting new industries and opening up opportunities for green economic development. Vietnam has great potential to participate in this trend thanks to its advantages in available raw materials, and has clearly defined the direction of biofuel development in the National Energy Development Strategy, associated with the goal of carbon neutrality by 2050 in the spirit of Resolution 55 of the Politburo .

According to the Minister, in fact, E10 bio-fuel has begun to be supplied on a pilot basis in Hanoi, Ho Chi Minh City, and Hai Phong, and has received infrastructure preparation from key enterprises such as Petrolimex , PVOIL, and Saigon Petro. It is expected that from January 1, 2026, E10 will be supplied synchronously nationwide.

However, the Minister acknowledged that the path to biofuel development still faces many challenges. Domestic production capacity currently only meets about 40% of demand, the rest still has to be imported. Consumers' concerns, especially with new cars, combined with the price difference between E5 and RON95 not being attractive enough, have caused the biofuel market share to decline. By 2024, E5 will only account for about 21% of the market; in many large localities, this rate will fall below 20%.

The Ministry of Industry and Trade has determined that from 2026, Vietnam will require the use of E10 gasoline nationwide, except for some specific fields such as defense, security or aviation.

Knots to be untied

According to Dr. Dao Duy Anh, Deputy Director of the Department of Innovation, Green Transformation and Industrial Promotion (Ministry of Industry and Trade), the current difficulties do not only come from consumer psychology but also from limitations in distribution infrastructure and the fact that some private enterprises have not complied with the mandatory E5 trading regulations. Domestic ethanol factories are also facing many obstacles when out of a total of 7 projects, only 2 factories are operating at about 50% capacity, limiting the ability to proactively source supplies.

In addition, communication work is not strong enough to create widespread trust in the community, while financial, tax and credit mechanisms for this sector still have many problems, not creating real motivation to promote production and consumption.

In that context, the Ministry of Industry and Trade has clearly defined a new roadmap. From 2026, Vietnam will require the use of E10 gasoline nationwide, except for some specific sectors such as defense, security or aviation. After 2030, the Ministry will study increasing the blending ratio to E15 or E20 depending on socio-economic development conditions, production capacity and energy security.

To implement this, the Ministry assigned the Department of Innovation, Green Transformation and Industrial Promotion to be the focal point for guiding blending and amending technical regulations, while promoting research on new generations of biofuels and enhancing international cooperation. The Department of Domestic Market Management will develop policies on prices, taxes, fees, inspection and supervision of distribution; People's Committees of provinces and cities are responsible for developing raw material areas and local production and distribution infrastructure; while enterprises must proactively restart ethanol projects, ensure compliance with the prescribed blending ratio and be subject to sanctions if they violate.

Dual opportunities for green energy and agriculture

Mr. Do Van Tuan, Chairman of the Vietnam Biofuel Association, said that the country currently has 6 ethanol factories with large design capacity, but actual output only reaches 40-60%. Ethanol demand will increase rapidly when the E10 program is deployed nationwide, forcing businesses to both improve domestic production capacity and consider import options to avoid supply disruptions. According to him, the existing distribution infrastructure is qualified to deploy E10, only requiring minor technical adjustments. Ethanol prices have been lower than mineral gasoline prices for many years, so E10 can contribute to stabilizing retail prices and supporting inflation control.

Not only does it bring environmental benefits, biofuels also create opportunities for Vietnamese agriculture. With more than 500,000 hectares of cassava and an output of over 10 million tons/year, the ethanol industry will create stable output, reduce dependence on informal exports, and help farmers feel secure in production. Ethanol factories are also improving technology to utilize by-products such as liquid CO₂, fusel oil, and DDGS for livestock farming, thereby reducing costs and increasing competitiveness. According to Mr. Tuan, domestic ethanol is completely capable of competing with imports and only needs to be imported when domestic production cannot meet demand.

Anh Tho

Source: https://baochinhphu.vn/phat-trien-nhien-lieu-bi-hoc-thoi-ky-moi-huong-toi-tuong-lai-nang-luong-ben-vung-102250827144607776.htm