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To develop bio-fuels: “Knot” at output

In Vietnam, production enterprises and distributors of bio-fuels are still waiting for the Government to promulgate an itinerary to oblige the use of green fuels and develop mechanisms to create a long-term cohesion and harmony of interests between producers, collectors and farmers; including issuing definite plans on material cassava planting for farmers to feel secure to cultivate.


PV Oil has supplied and distributed Gasohol E5 to the market since August 2010

Economic development and environmental improvement

With great use of ensuring the energy security, supporting the economic development and improving the quality of the environment, contributing to a country’s sustainable development, Gasohol E5 and E10 were encouraged and required to use in more than 30 countries around the world. Among them, 20 countries required to use Gasohol having content of 4-20% by volume of denatured ethanol in the country or in major cities / provinces / states. Thailand began distributing Gasohol in 2004 and is about to officially promulgate regulations to replace totally normal petrol RON 91 by petrol 91 E10 and continue encouraging the use of petrol E20 and E85 from December 2012. Bio-fuels Act of the Philippines took effect on 6th February 2008, in which the Philippines government prescribed that 5% ethanol to be blended in normal petrol since 2009; that 10% ethanol to be blended in all traditional petrol (E10) from June 2012. The success of these two countries is due to the comprehensive coordination between state management agencies, enterprises operating in the field of bio-fuels from raw materials development, production and distribution of bio-fuels, and policies to encourage customers.

Still many difficulties to overcome

Recognizing the importance of bio--fuels to the sustainable development of the country, the Prime Minister signed Decision No. 177/2007/QD-TTg approving the "Scheme to develop bio-fuels by 2015 with a vision to 2025". Being the pioneer in the implementation of this project, Petrovietnam has invested to build three bio-fuel production plants in provinces of Phu Tho, Quang Ngai, Binh Phuoc with a total capacity of 300 million liters / year. In which, the Dung Quat Bio-ethanol plant and the Binh Phuoc Bio-ethanol plant having design capacity of 100 million m3/year/plant have produced the first product with good quality, meeting technical standards. The development of markets, raw material areas, research and blending of ethanol into Dung Quat petrol as an additive have also been carrying out by subsidiaries of the Vietnam National Oil and Gas Group.

At the same time, following directions of Petrovietnam, the PV Oil supplied and distributed officially Gasohol E5 to the market in August 2010. After one year of implementation, despite of difficulties, the PV Oil continues producing, processing and providing the market with petrol E5 with quality fulfilling regulations and standards of the Vietnam National General Department of Standard – Measurement and Quality Control. The total volume of petrol E5 consumption reached 23,220 m3, of which the volume in 2010 was 4,120 m3, in 2011 was more than 16,000 m3 and the first two months of 2012 was 2,600 m3. This figure shows that the habit of consumers to use petrol E5 has increased. Currently, petrol E5 prepared by the PV Oil continues to be sold in 150 petrol stations of the PV Oil and agencies in 41 provinces and cities all over the country. The PV Oil will continue to expand its distribution channels in the coming time to ensure the objectives of the Government's Scheme approved for long-term benefit of the nation.

If only E10 is used, the foreign currency to be saved will be doubled, about 400 million US Dollars.

However, the "knot" of output for bio-fuel products in general and petrol E5 in particular in Vietnam has not been "removed" even though laws, decrees, regulations and standards for production and sale of these products have been issued. Up to date, the Ministry of Science and Technology has issued standards on original bio-fuels (E100, B100) and standards on blending bio-fuels (E5, E10, B5, B10). The Ministry of Industry and Trade has issued a National technical regulation on petrol, diesel and bio-fuels. The Ministry is completing the development of two national technical regulations on transport, preparation and storage of bio-fuels. However, the coordination among involving agencies in solving difficulties to develop the bio-fuel market is still limited; current legal documents and regulations still contain certain barriers that make the bio-fuel development difficult. Bio-fuel distributors and traders have not enjoyed incentives in corporate income tax and import tax on equipment for construction of blending facilities, not exempted from environment fee for petrol E5 (only exempted for E100), not exempted 100% of fuel surcharge for petrol E5; there is no credit mechanism for farmers to encourage the development of material areas. Producers and distributors of bio-fuels are still waiting for the Government to promulgate an itinerary to oblige the use of green fuels and develop mechanisms to create a long-term cohesion and harmony of interests between producers, collectors and farmers; including issuing definite plans on material cassava planting for farmers to feel secure to cultivate. Particularly, the tightest “knot” is that the Government has not promulgated any itinerary to oblige the use of bio-fuels.

Regarding this matter, the Ministry of Industry and Trade has submitted to the Prime Minister for review and approval a draft itinerary to oblige the application of blending rate of bio-fuel with traditional fuels in Vietnam following common trends of the region and the world. According to the draft, the obligatory application of the blending rate of petrol E5 for road motorized vehicles will start on 01st December 2013 in seven cities and provinces including Hanoi, HCM City, Hai Phong, Da Nang, Can Tho, Quang Ngai and Ba Ria-Vung Tau. Up to 01st June 2015, petrol E5 will be obliged to use for motorized vehicles all over the country. Petrol E10 is expected to be used in the above cities and provinces from 01st June 2015 and in all the country from 01st December 2016.

According to the research of Dr. Nguyen Anh Duc and Master Huynh Hung My in Vietnam Oil and Gas Institute, the use of petrol E5/E10 helps reduce volume of petrol to be imported, reduce excess of imports over exports, contributes to ensure the energy security. In estimation, if Vietnam uses only petrol E5 in 2012, the import of petrol will be reduced by nearly 300,000 m3, equivalent to about 200 million US Dollars. If only petrol E10 is used, the foreign currency to be saved will be doubled, about 400 million US Dollars.

Differences between methanol and ethanol:

Methanol is an extremely toxic to humans during use, inhalation of methanol vapor or contact with skin. The heating value of methanol is lower than that of ethanol, therefore, the energy efficiency of methanol is also lower than that of ethanol. In particular, metal corrosion and gasket changes in fuel injection system are the main reasons that make automotive manufacturers do not the use of methanol in petrol, at any rate.

For petrol blended with ethanol, after researching, scientists demonstrated that petrol with 5% ethanol does not have any affect to durability and longevity of engines, while it brings benefits in terms of fuel economization and technical features, and especially reduces toxic emission to the environment. Opinions that like methanol and acetone, petrol blended with ethanol (petrol E5) is a cause for vehicle burning are wrong and unacceptable because there is no legal foundation or scientific basis to prove that.

The Vietnam National Oil and Gas Group have requested the Petrovietnam Research and Development Center for Petroleum Processing (PVPro) under the Vietnam Oil and Gas Institute (VPI) to start to do researches and experiments on petrol E5/E10 since 2003. Through three stages from research on the conveyor belt in laboratory to trial running on roads and collecting consumer feedbacks for all kinds of motorcycles and cars, the results show that using petrol E5/E10 helps decrease considerably the amount of environmental pollution emissions, especially CO (up to 44%), hydrocarbon (up to 25%) and NOx (up to 10%).


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