Biofuels: The problem lies in policy

The lack of synchronous policies of the State is one of the difficult issues in the development of the biofuel industry in Vietnam, said Luu Quang Thai, Chairman of Vietnam Biofuels Association.

E5 biogas has not really come to life. (Photo: Laodong)

Biofuels play an increasingly important role in addressing world energy and environmental protection issues. Vietnam is a country with great potential in developing biofuels due to favorable climate, land and labor costs. However, at present, Vietnam still exports crude tons of cassava to foreign countries to produce ethanol every year. Therefore, the development of biofuels industry in our country will contribute to solving jobs, consuming agricultural products for farmers and the trade deficit .

The potential and benefits are very clear, however, the development of the biofuels industry in Vietnam still faces many difficulties.

Due to the characteristics of technology, the cost of biofuels is often higher and therefore it is very difficult to compete with traditional fuels. Therefore, one of the solutions that most countries produce biofuel in the world is the state has preferential policies for manufacturing enterprises as well as support prices for distributors. However, in Vietnam, both stages of production and consumption are facing difficult problems.

According to Mr. Luu Quang Thai, the investment in biofuel industry requires a huge amount of capital due to investment in raw materials and production equipment is very poor. This capital is beyond the power of the private sector, while state-owned enterprises often move very slowly. Therefore, the biofuel production industry in Vietnam has not yet developed despite a great potential.

In the project 'Development of biofuels up to 2015 with a vision to 2025' approved by the Government in 2007, it stated: 'Renovating mechanisms and policies on taxes, prioritizing loans and land use belt to support, encourage and create favorable conditions for enterprises, organizations and individuals in the country and internationally to invest in developing biofuel production in Vietnam '. However, up to now, preferential policies for manufacturing enterprises have been really effective.

Meanwhile, the consumption channels of biofuel production enterprises are not much. Current domestic ethanol production is mainly supplied to petroleum distributors to prepare E5 gasoline, the rest is mainly for export, Mr. Luu Quang Thai, Chairman of Dong Xanh JSC, one of 3 Current biofuel production enterprises in Vietnam said.

E5 Gasoline is A92 gasoline mixed with 5% ethanol and officially sold since 2010. However, consumers have so far been indifferent to this type of fuel due to the lower price but not really competitive. With traditional gasoline plus a fear of ignorance of the people, it is thought that using this gasoline "kills" the engine.

Another reason why biofuel products have not been consumed much in the domestic market, according to Mr. Thai, is because 'distribution channels, mainly big oil companies, have not moved in time, slower distribution of production '. Therefore, it is paradoxical that the amount of ethanol alcohol that these businesses produce is mainly for export, not for domestic demand.

The problem is that there must be synchronous policies of the State. (Photo: LV)

It is known that the Ministry of Industry and Trade currently has submitted to the Government a roadmap to use biofuels in Vietnam. According to Mr. Thai, once this roadmap is approved, domestic consumption will increase very quickly, however, when there is no official decision, it is still unknown.

Thus, both in production investment and consumption and distribution channels of biofuel products in our country are facing obstacles that require the intervention of the State.'The policy is also there, however, the problem is that it is necessary to synchronize policies for biofuels that can go into life. There are still certain obstacles' , said Mr. Luu Quang Thai. .

In the context of the production and consumption of biofuels in Vietnam still faces many difficulties, the establishment of an association brings together members including manufacturing enterprises, distributors and research institutes. Scientific research will create a breakthrough for the biofuels industry in Vietnam.

On November 11, 2011, the Congress established the Vietnam Biofuels Association. It is considered to be the earliest established association compared to the formation of a new industry in Vietnam.

The objective of the Association is to gather organizations and businesses operating in the industry to promote the development of Vietnam's biofuels industry, to maximize the benefits of biofuels to society.