THE ORIENTATION IN THE PRODUCTION AND USE OF BIO-FUELS IN VIETNAM
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1 REGIONAL WORKSHOP ON SUSTAINABLE BIOENERGY PRODUCTION AND USE IN SOUTHEAST ASIA THE ORIENTATION IN THE PRODUCTION AND USE OF BIO-FUELS IN VIETNAM Presenter: Dr. Dong Do-Xuan Department of Science and Technology VIETNAM MISNISTRY OF INDUSTRY AND TRADE Hanoi, November
2 CONTENT OVERVIEW OF BIO -FUELS ORIENTATION IN THE PRODUCTION AND USE OF BIO-FUELS IN VIETNAM EVALUATING THE PERFORMANCE OF THE PLAN OF THE GASOLINE E5 RON 92 IN VIETNAM CONCLUSION
3 Overview Alternative fuels used on internal combustion engines:: Liquefied Petroleum gas (LPG) Natural gas (CNG, LNG) Bio - Diesel Ethanol Hydrogen Dimethyl Ether (DME) Synthesis gas..
4 Overview Europe: Mandatory application of E5, E10 is expected by America: started testing bio-fuels in By the end of 2010, more than 90% of all gasoline sold in the United States was blended with ethanol. Brazil: since 1976 mandated the use of bio-fuels, in 2007 used up to E25. Australia, New Zealand: compulsory use of E10. China: compulsory use of E10 petrol in 10 provinces and cities. India: compulsory use of E5 petrol since 2008; From October 2015, compulsory use of E10 petrol. More than 50 contries used bio-gasoline. E100: Processed from corn, sugarcane, cereals... Vietnam mainly comes from cassava.
5 Target Contribute to the goal of energy security, reduce the dependence on petroleum. Improve the environment, while implementing the commitment of the Government of Vietnam to international reduction of greenhouse gas emissions. Contribute to sustainable income generation for the agricultural sector and promote agricultural sector restructuring
6 Oriented Development Decision No. 177/2007/QĐ-TTg, November 20, 2007, approving the Scheme on bio-fuel development up to 2015 with a vision toward Decision No. 53/2012 /QĐ-TTg, November 22, 2012 on the promulgation of a road map for applying the rate of blending of bio-fuels with traditional fuels.
7 Decision No. 177/2007 /QĐ-TTg - To formulate a system of mechanisms, policies and legal documents aiming to create a legal corridor to attract investment and encourage industrial-scale production and use of bio-fuels. Raising public awareness of the important role and benefits of biofuels; - Developed production and widespread use of bio-fuels to replace traditional fossil fuels. Expand the scale of bio-fuel production facilities and distribution networks for transportation and other industrial purposes; - To build and develop bio-fuel production and use establishments throughout the Viet Nam teritory. By 2015, ethanol and vegetable oil output will reach 250,000 tons (with 5 million tons of E5, B5), meeting 1% of the country's petroleum demand.
8 Decision No. 53/2012 /QĐ-TTg 1. Bio-gasoline E5 a) From December 01th, 2014, gasoline is produced, formulated and traded for use in road vehicles in the provinces and cities of Hanoi, Ho Chi Minh City and Hai Phong. Da Nang, Can Tho, Quang Ngai, Ba Ria - Vung Tau are gasoline E5. b) From December 01th, 2015, gasoline produced, processed and traded for use in motor vehicles nationwide is E5.
9 Decision No. 53/2012 /QĐ-TTg 2. Bio-gasoline E10 a) From December 01th 2016, gasoline is produced, formulated and traded to be used for road motorized vehicles in the provinces and cities of Hanoi, Ho Chi Minh City and Hai Phong. Da Nang, Can Tho, Quang Ngai, Ba Ria - Vung Tau are bio-gasoline E10. b) From December 01th 2017, gasoline produced, processed and traded for use in motor vehicles nationwide is E10 gasoline. 3. Encourage application In the period of not applying the rate of mixing according to the Roadmap, organizations, individuals are encouraged to produce, coordinate and trade petrol E5, E10 and diesel B5 and B10.
10 Results The legal document system is sufficient to meet the management needs of a newly formed bio-fuel industry. The system of standards, quality standards... have been promulgated to serve the management of gasoline production and trading activities E5 and E10. The quality of E5 bio-gasoline is well controlled, no complaints of consumers. The production capacity of ethanol fuel E100 of domestic production units can completely meet the demand of mixing to completely replace RON 92 gasoline with E5 RON92 gasoline according to the set schedule.
11 Results Trends in the use of gasoline E5 tend to gradually show that gasoline E5 RON92 consumption reached about 50,000m3/month, accounting for 12.18% of the total amount of RON 92. Number of petrol dealers sell Gasoline E5 reached stores accounting for 10% compared to the total number of petrol stores, especially, Quang Ngai, Quang Nam, Da Nang, Can Tho reach nearly 100%. In the pricing formula for E5 bio-gasoline have been shown the incentives of state through excise taxes and environmental taxes, as well as allowed to increase the norm cost to ensure the right benefit of the business.
12 Dificults The exiting two types of petroleum RON 92 and E5 RON 92 have caused bad psychology for consumers as well as difficulties for management agencies and businesses trading petroleum in production, business and management. The habit of people for using petrol as well as psychological concerns about the quality of gasoline E5 when used still in a consumer. Price difference between gasoline E5 and gasoline RON92, RON95 is not big enough to encourage customers. The construction and installation of equipment, auxiliary equipment, tanks, pump columns E5 at the dealer and petroleum store requires investment in the ground as well as capital, leading to the store owner hesitant to invest.
13 Dificults - The cost of ethanol fuel of domestic plants is not competitive with mineral oil, leading to the factories having to operate in moderation, the consumption is very low compared to the capacity. The main reason causing difficulties for ethanol production is high cassava prices, crude oil prices plummeted. - The transportation to remote areas, the complex terrain as well as the weather conditions differ between regions and seasons have pushed up the price of E5 gasoline, reducing the competitiveness of E5 gasoline compared to the RON92 and RON95 mineral gasoline.
14 Some main reasons World oil prices fluctuate sharply. Changing habits and psychology of consumers using RON92 and RON95 petroleum to use gasoline E5 is a long time. The participation of the local goverment as well as the focal points of petroleum business have not been strong enough. Price policy is not sufficiently strong, flexible and timely to cope with changes in oil prices to create the necessary price difference encouraging companies investment in E5 petrol business. Information is not strong enough to change cognitive habits, understand the benefits as well as create trust for consumers.
15 The Government's direction Accoding to the announcement No. 255/TB-VPCP of June 6, 2017 of the VietNam Government Office on the implementation of the Bio-fuels Development Scheme and the Roadmap for applying bio-fuel blending ratio to fuel the system: "From January 1, 2018, only production and business on the E5 RON 92 and RON 95 gasoline.
16 Ministry of Industry and Trade's direction On September 22, 2017, the Ministry of Industry and Trade promulgated the Directive No.11/CT-BCT on strengthening the implementation of the Roadmap for the application of bio-fuel mixture ratio to traditional fuels. This directive further confirms the drastic and urgency of the VietNam Government in replacing completely RON92 gasoline with bio-gasoline E5 RON92 nationwide from 01th January, 2018.
17 EVALUATING THE PERFORMANCE OF THE PLAN OF E5 RON 92 IN VIETNAM Production capacity of ethanol fuel E100 plant The supply of ethanol fuel for mixing bio-fuel E5 RON 92 mainly from two biofuel plants of Tung Lam Co., Ltd: total capacity of 200,000 m3/year (200 million liters/year). That is enough to mix 3.9 million m3 (3.0 million tons) of biodiesel E5 RON 92 per year. There are two factories with a capacity of 100,000 m3/year (100 million liters/year) in Dung Quat and Binh Phuoc, which are halting production due to lack of market for their products. These factories are urgently preparing and implementing plans to bring the plant to work back, expected to restart at the end of 2017.
18 EVALUATING THE PERFORMANCE OF THE PLAN OF E5 RON 92 IN VIETNAM About the material Cassava Cassava is grown from north to south of VietNam with planting area of about ha. Cassava attracts about 50,000 people in factories, and more than 1.2 million people in cassava processing plants. The VietNam Ministry of Agriculture and Rural Development has developed and approved a detailed plan for cassava planting areas nationwide, accounting the needs for fuel ethanol production as well as other purposes. Cassava productivity increased continuously in the period : the average cassava productivity in the whole country in 2016 reached tons/ha.
19 EVALUATING THE PERFORMANCE OF THE PLAN OF E5 RON 92 IN VIETNAM Implementation of E5 blending system 05 traders have the system of mixing gasoline E5 are operating, including: Petrolimex, PV Oil, Saigon Petro, Company Military Petroleum Company, Nam Song Hau Petroleum Investment and Trading Co., Ltd 02 others traders have deployed but not yet put into operation: Dong Thap Petroleum Trading Limited Company and Thanh Le Trading Import Export Company Limited. The total capacity of E5 RON 92 gasoline mixing stations from 07 traders has been about million m3/year. In addition, a number of other traders have also taken to set up a blending plant to be put into operation in 2018: Nam Phuc Investment Joint Stock Company, Thien Minh Duc Joint Stock Company, Trading - Investment - Investment - Construction Bach Khoa Viet, Hai Linh Co., Ltd.,
20 EVALUATING THE PERFORMANCE OF THE PLAN OF E5 RON 92 IN VIETNAM Forecasts for the E5 and E100 gasoline market in VietNam Total of gasoline consumption in VietNam, 2016 Total gasoline consumption in the whole VietNam country in 2016 reached about 7.4 million m3, of which E5 RON 92 gasoline was about m3, accounting for 8% of the total gasoline consumption in the market; When changing the total consumption of RON 92 gasoline into E5 RON 92 petrol started on January 1, 2018, total E5 RON 92 gasoline consumption nationwide is estimated at 5.3 million m3. Total of the demanded E100 for VietNam Total demand for E100 in 2016 is about 29,500 m3. As of January 01, 2018, when converting all RON 92 gasoline consumption to E5 RON 92 bio-fuel, it is estimated that the demanded E100 for E5 RON 92 is about 267,000 m3. Total of the demanded cassava material for producing E100 Estimated total E100 demand for E5 RON 92 is about 267,000 m3/year (about 267,850 million liters of alcohol, equivalent to 212,003 tons of alcohol per year), about 604,209 tons of dry cassava, about tons of fresh cassava/ year.
21 CONCLUSION Up to now, from the implementation of production and business of petroleum trading enterprises, E100 production plants, E5 RON 92 gasoline mixing station system in Vietnam, The E5 RON 92 gasoline supply can meet the market demand when replacing all RON 92 petrol with E5 RON 92 biofuel gasoline starting January 1, From the result of implementation of production and trading of E5 RON 92 bio-gasoline, Vietnam will study and adjust the roadmap for the application of E10 bio-gasoline and bio-diesel to meet the practical conditions of Vietnam.
22 Thanks for your attention!
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