Learning from the E5 Setback: Vietnam’s Push for Green Energy Revolution
The Ministry of Industry and Trade proposes a new decree to introduce a roadmap for the blending ratio of biofuels with traditional fuels, marking a potential turning point for Vietnam’s green energy development.
From January 1, 2031, the Ministry proposes a nationwide transition to E15 gasoline (containing 14-15% ethanol) or other biofuel blends as mandated by the Minister of Industry and Trade, based on practical considerations.
In the interim, organizations and individuals are encouraged to voluntarily engage in the production, blending, trading, and consumption of diesel biofuels (B5 and B10).
Vietnam has previously implemented the use of E5 and E10 biofuels and discontinued the sale of RON92 gasoline in 2018. As a result, E5 RON92 accounted for over 40% of total gasoline consumption during 2015–2019. However, since 2020, its market share has declined, currently standing at approximately 20%. In some provinces, E5 gasoline is even absent from retail stations.
The Ministry proposes a mandatory switch to E10 gasoline for all vehicles with gasoline engines nationwide from January 1, 2026.
The Ministry attributes the decline in biofuel consumption to several factors, including storage challenges due to moisture absorption and evaporation, insufficient tax and fee policies to encourage consumption, inadequate communication to address consumer concerns about engine damage, and a lack of monitoring and enforcement.
To address these issues, the Ministry emphasizes the urgency of a more comprehensive roadmap to overcome the setbacks faced by E5 and seize international trade opportunities while restarting the ethanol industry.
The proposal applies to all organizations and individuals involved in the production, import, blending, distribution, and trading of biofuels, excluding diesel, aviation, and specialized defense fuels.
Ministry Confident in Production, Import, and Blending Capacities
In terms of production and blending capabilities, Vietnam currently has six ethanol plants with a combined designed capacity of approximately 600,000 cubic meters per year, which can meet about 40% of the ethanol demand for E10 blending (estimated at 1.5 million cubic meters of E100 per year, based on a total gasoline demand of 15 million cubic meters in 2024).
The Ministry affirms Vietnam’s capability to produce, import, and blend biofuels for the proposed mandatory implementation of E10 from January 1, 2026.
Any shortfall can be compensated by imports from the US and Brazil, the world’s largest ethanol producers, through major ports like B12 (Quang Ninh), Nha Be (Ho Chi Minh City), and Van Phong (Khanh Hoa).
Regarding blending infrastructure, major players such as the Vietnam National Petroleum Group (PLX) and the Vietnam Oil and Gas Group (PVOIL) possess capacities exceeding the current demand. PLX’s blending capacity for E5/E10 reaches over 8.4 million cubic meters per year, far surpassing practical needs. PVOIL has a blending capacity of more than 1.6 million cubic meters of E5RON92 per year but currently utilizes only a fraction of it, leaving about 1 million cubic meters of spare capacity.
Other enterprises like BSR (Dung Quat) and Saigon Petro have also prepared the necessary infrastructure to participate in the blending process.
“Considering our production, import, and blending capabilities, Vietnam is fully capable of mandating the use of E10 from January 1, 2026,” affirmed the Ministry.
Local governments are instructed to support raw material regions, blending infrastructure, and local communication strategies. Enterprises are responsible for restoring ethanol plants, importing to make up for shortages, and ensuring the quality of E10 before distribution.
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