The ethanol plant in Phu Tho province won’t be revived as it has been following procedures for filing for bankruptcy. However, the two ethanol projects in Dung Quat and Binh Phuoc, which have been left idle after unprofitable trial runs, are expected to be rescued.

Under the revival plan approved by agencies, the investors will reactivate the plants and then withdraw the capital (the capital contribution of Dung Quat Oil Refinery to Ethanol Dung Quat and PV Oil’s capital contribution to Binh Phuoc project).

Under the revival plan approved by agencies, the investors will reactivate the plants and then withdraw the capital (the capital contribution of Dung Quat Oil Refinery to Ethanol Dung Quat and PV Oil’s capital contribution to Binh Phuoc project).

Analysts commented that the opportunities to revive the projects are positive with the government’s decision to use E5 biofuel instead of RON 92 and the environmental protection tax law, which is being amended to encourage biofuel use.

A report shows that the total petrol volume consumed in Vietnam in 2016 was 7.4 million cubic meters, including 590,000 cubic meters of E5 RON 92, accounting for 8 percent of total consumption only. 

However, once Vietnam shifts to use E5 instead of RON 92 from early 2018, the figure would reach 5.35 million cubic meters, according to MOIT. The remaining would be RON 95.

To have biofuel, it is necessary to mix ethanol and RON 92 at certain ratios. To make E5, the ratio would be 5 percent ethanol and 95 percent of RON 92, while E10 has 10 percent of ethanol.

At present, there are only two plants owned by Tung Lam Company in Dung Quat that make ethanol for mixing. With the capacity of 200,000 cubic meters per annum, the output would be enough to mix 3.9 million cubic meters of E5 a year, satisfying 73 percent of the domestic demand.

The remaining demand will be satisfied by two plants in Dung Quat and Binh Phuoc once they become operational with the capacity of 100,000 cubic meters a year for each plant.

In the report about the preparation for the elimination of RON 92, MOIT mentioned the resumption of the operation of the two plants from late 2017.

Though the state is not spending money to directly save unprofitable projects, it will still be able to save the plants on the verge of bankruptcy.

Ten years ago, the government released a plan on the development of biofuel in Vietnam by 2025. Only two privately run projects have existed, while three projects developed by PVN took losses because of ineffective investment.

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