A green light for bio-fuels?

Ethanol manufacturers remain demanding the Vietnamese government’s urgent help to timely create a market for their products despite the latest prime minterial approval of timeline to sell ethanol nationwide.

According to the approval, bio-fuel E5, that is a mixture of unleaded gasoline and ethanol, will be allowed to be sold on a massive scale in seven cities and provinces from December 1, 2014. They are Hanoi, Haiphong, Danang, Quang Ngai, Ho Chi Minh City, Ba Ria-Vung Tau and Can Tho. Meanwhile, bio-fuel E10 will be sold on a massive scale in the seven cities and provinces from December 1, 2016.

After that, bio-fuel E5 and E10 will be sold nationwide from December 1, 2015 and from December 1, 2017 respectively.

Currently, market observers admitted that bio-fuel E5 sales remain very modest compared to traditional fuels. Only three out of more than 10 petroleum wholesalers in Vietnam - PV Oil, Petec and SaigonPetro presently trade bio-fuel E5.

The market is so bad that Japan’s Itochu, the foreign partner in the joint venture to build and operate $80 million ethanol factory in southern Binh Phuoc province, recently expressed its wish to transfer 49 per cent stake to other partners.

The Binh Phuoc factory, which started operating early this year, is invested by the Orient Bio Fuels Company, a joint venture between Itochu (49 per cent), PV Oil (29 per cent) and Licogi 16 (22 per cent). The factory has an annual capacity of 100,000 kilolitres of products.

While industry insiders believed the new government’s timeline for ethanol sales on the nation scale can be a lifebuoy for the sinking sector, an Itochu representative told VIR that the company would review its situation from all possible aspects.

Besides the Binh Phuoc factory, state-run PetroVietnam and its partners is now developing two ethanol factories in northern Phu Tho and central Quang Ngai provinces with the combined capacity of 200,000 cubic metres per year.

Frank Hopfenbach, country manager of Messer Group in Vietnam - which is now operating industrial gases manufacturing facilities in Vietnam, said the deadline of 2014 to popularising the use of bio-fuel E5 for road vehicles was too late.

“It’s a waste because we have started up our CO2 recovery plant already and invested in other supportive facilities,” Hopfenbach said.

Messer Group has invested in a CO2 recovery plant right next to the Orient Bio Fuels Company’s ethanol factory in Binh Phuoc, to collect raw CO2 released from the factory in order to produce food grade CO2 which will be sold to different industry segments such as wastewater treatment.

The Ministry of Industry and Trade forecast that Vietnam will need around 120 million litres of bio-fuels by 2015, and the figure will climb to 833 million litres by 2025.

Bich Ngoc (vir.com.vn)