Việt Nam Needs to Accelerate Adoption of Biofuel Amid Global Energy Supply Uncertainty

March 17, 2026

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(VietStock) Although the mandatory roadmap for biofuel blending will take effect from June 1, Việt Nam should consider accelerating the use of biofuel-blended petrol in response to increasingly complex geopolitical developments affecting global energy supplies, Deputy Minister Nguyễn Sinh Nhật Tân said at a conference on March 9.

Speaking at a conference on implementing the roadmap for blending biofuel, the Deputy Minister emphasised that earlier adoption of the fuel would help reduce Việt Nam’s reliance on conventional fossil-based petrol.

According to the Ministry of Industry and Trade, Việt Nam already has a roadmap for blending and using biofuels. However, developments in the global oil market over the past week have highlighted the volatility of international energy supplies.

Under the roadmap, authorities must carefully prepare several key elements, including ethanol supply, blending and distribution systems, and management and monitoring mechanisms to ensure transparency, efficiency and compliance with technical standards.

Đỗ Văn Tuấn, chairman of the Việt Nam Biofuels Association, noted that Circular 50 stipulates that from June 1 petrol sold in Việt Nam must be either E5 or E10 biofuel-blended gasoline. However, companies are already able to sell these fuels ahead of the deadline.

In practice, several major petroleum distributors began selling E10 petrol as early as August 1, 2025, and throughout March this year E10 has been introduced to the market in increasing volume.

“If Việt Nam can proactively secure ethanol supply, it will clearly help ease pressure on crude oil imports and refined petroleum products, which are currently heavily affected by instability and conflict in the Middle East,” Tuấn said.

Following Government directives, the Ministry of Industry and Trade issued Circular 50 on November 7, 2025, establishing new regulations on the blending ratio of biofuels with conventional fuels to replace the previous roadmap.

The Circular's implementation has also been reinforced by Directive 07 issued by the Prime Minister on February 26, which calls for stronger production, blending, distribution and use of biofuel petrol.

Tân said that expanding the use of E5 and E10 biopetrol reduces emissions compared with traditional gasoline, thus contributing to environmental protection.

In addition, it supports the development of the biofuel industry, creates stable demand for agricultural products and helps reduce dependence on imported petroleum.

Amid growing uncertainty in global energy supplies due to armed conflicts, many countries, including the US, Brazil, European nations, China and Thailand, have widely adopted higher ethanol blends, such as E10, E15 and E20.

In Việt Nam, E5 petrol has been distributed nationwide since 2018, while E10 was introduced to the market on August 1, 2025.

“In practice, there have been no recorded cases of negative reactions related to the quality of E5 or E10 petrol affecting vehicle performance or damaging engines,” the Deputy Minister confirmed.

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The country has operated E100 ethanol production plants for many years and possesses an extensive petroleum distribution network.

However, to fully leverage these advantages, closer coordination is required among ministries, local authorities, research institutions and the business community.

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In addition, expanding biofuel use could contribute to lowering emissions in the transport sector and support Việt Nam’s national climate objectives. Beyond environmental benefits, the development of the biofuel sector is also expected to support agricultural and rural economic growth.

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Meanwhile, the Deputy Minister also called on Government agencies, industry associations and businesses to strengthen communication and public outreach efforts, providing accurate and objective scientific information about the environmental and socio-economic benefits of biofuelsto build public consensus and strengthen consumer confidence in biofuel petrol. READ MORE

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E10 biofuel rollout could be accelerated as energy risks rise (Saigon Times)
Petrolimex to replace mineral petrol with biofuel ahead of schedule (Vietnam Plus)
Golden time for biofuel energy in Vietnam: Japanese company (Vietnam Plus)
Vietnam advised to build sustainable linkages for bioethanol production (Vietnam News Agency/Vietnam Pictoral)
Vietnam rushes biofuel rollout as Iran war prompts energy pivot -- The move follows similar drives in Indonesia and Thailand (Bloomberg/Business Times)
Firms complete infrastructure, supply preparations for E10 biofuel rollout (VNA/VPAVietnam Pictoral)

Excerpt from Vietnam Plus: While Vietnam’s biofuel programme has been quietly building for nearly a decade since E5 bio-gasoline officially introduced in 2018, the programme itself has been pulled forward with the rollout of E10 biofuel nationwide from June 1, 2026, one month earlier than the previous schedule, due to the impact of the soaring global oil prices resulting from the Middle East tensions.

Japan’s B&Company on April 2 published an article assessing Vietnam’s biofuel market, noting that it is recording positive shifts amid rising crude oil prices and biofuel’s growing potential of contributing to energy security.

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From 2014 - 2020, the E5 ethanol gasoline fluctuated, while increasing rapidly and reaching its peak in 2018, the trend slowly decreased its share in the total gasoline consumption from 50% to only around 40% in 2020.

Meanwhile, Vietnam has about six fuel ethanol production plants; however, only about half of them are operational, and most are not operating at full capacity due to previously limited market demand. If all plants operated at maximum design capacity, the total domestic ethanol production could be equivalent to about 40% of demand. Thus, in the initial phase of E10 rollout, the biggest problem that Vietnam still has to face is that importing fuel is still a must of up to 60% of ethanol for fuel blending.

However, in order to achieve the goal of developing biofuels that completely replace mineral gasoline, Vietnam needs to overcome major challenges in technology, policy, and market; in which the obstacle exposes an urgent need to expand raw material areas, increase ethanol production capacity, and build a strong and feasible policy mechanism to encourage production, import, and strategic reserve of biofuel sources.

Consumer perception has also lagged. On the consumer side, there is still fear around the quality of biofuel, while on the business side, the price difference between E5 RON92 and RON95 gasoline is quite low, not enough to create a strong motivation for people to switch. Infrastructure for blending and distribution requires huge capital, and the raw material supply chain from farm to ethanol plant remains fragmented.

Guiding effective market entry, the company said foreign investors with logistics expertise, particularly in tank storage, port handling, and cold chain management, have an immediate role to play that complements ethanol production investment. READ MORE

Excerpt from Vietnam News Agency/Vietnam Pictoral: According to the Vietnam Biofuels Association, the country currently operates six fuel ethanol plants with a combined designed capacity of approximately 600,000 cubic metres per year. At full capacity, these facilities could meet around 40% of the demand for E10 RON95 blending. However, securing sufficient feedstock to operate at full capacity continues to face considerable difficulties.

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As demand for blending E10 RON95 biofuel continues to rise, ensuring a stable supply of input materials such as cassava and maize for ethanol production remains a significant challenge, requiring coordinated and comprehensive solutions.

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In practice, most domestically produced ethanol is derived from cassava, a feedstock with limited availability and relatively low efficiency, leading to higher production costs.

Associate Prof. Dr. Chu Tien Quang, former head of the rural development policy department at the Institute for Policy and Strategy Studies, noted that local cassava cultivation areas have been shrinking due to declining yields, rapid soil degradation and environmental impacts. In addition, fragmented farming and limited mechanisation have kept productivity low and harvesting costs high. Farmers also lack incentives to cultivate cassava due to low purchase prices and the absence of stable off-take contracts.

Sharing a similar view, Nguyen Tri Ngoc, Vice Chairman and General Secretary of the Vietnam General Council of Agriculture and Rural Development, said that cassava cultivation linked to ethanol feedstock supply has been promoted for years. However, ensuring sustainability requires appropriate policies and technical processes, as cassava is both a valuable raw material for biofuel production and a potential source of environmental overexploitation.

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... maize is sourced both locally and imported from South American markets such as Argentina and Brazil, as well as from the US.

He added that maize offers a more stable supply and consistent quality in terms of starch content, impurities and technical specifications for ethanol production. By contrast, cassava is highly seasonal, with abundant supply and low prices during harvest periods, followed by sharp price increases in the off-season.

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Alongside value chain development, better utilisation of existing agricultural by-products, such as bran, straw and corn cobs, should also be considered a key solution for ensuring feedstock supply for ethanol production. This approach would help reduce environmental pollution, minimise waste and prove far more cost-effective than establishing new cultivation zones, he added.

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Furthermore, the Government should consider granting corporate income tax exemptions or reductions for a period of 5–10 years for ethanol production projects in order to encourage long-term investment. With the current import tariff on ethanol set at 5%, businesses have called for this level to be maintained to provide reasonable protection for domestic production. READ MORE

Excerpt from Bloomberg/Business Times: VIETNAM has moved up its timeline for the mandatory use of biofuel despite concerns over supply levels, quality and cost, as it seeks to strengthen energy security while the Middle East conflict drags on.

A nationwide rollout of E10, a mix of 10 per cent ethanol and 90 per cent unleaded petrol, aims to start at the end of this month, ahead of an original June timetable, according to a trade ministry draft regulation. The move, which follows similar drives in Indonesia and Thailand, is intended to reduce dependence on petroleum products that are becoming increasingly expensive as the Iran war disrupts global oil and gas supplies.

Domestic production will only be able to meet about 40 per cent of estimated demand once at full capacity and the country will need to rely on imports from countries such as the US and Brazil to bridge the gap. That could still leave it exposed to volatility from logistics disruptions and price fluctuations, said Do Van Dung, president of Ho Chi Minh City Society of Automotive Engineers.

For customers at one Ho Chi Minh City fuel station last week, news of the switchover came as a surprise. 50-year-old Huynh Thanh Binh, who works in the financial sector, said that he was not aware of the change and had never used biofuel previously, as he’d heard it could harm his engine.

“If biofuel becomes mandatory, then we have no choice,” Binh said. If the level of engine wear is minimal compared to the cost savings, then people will support it, he said. “But if the damage is significant, it could generate public discontent.”

Local operators are rushing to prepare for the early launch. Dung Quat bio-ethanol plant is expected to reach full capacity this month, producing about 330 cubic metres of ethanol per day. Ethanol demand is projected at around 1.1 million cubic metres per year following the rollout, according to the trade ministry. The country can generate around 400,000-500,000 cubic metres of ethanol annually if all of its six plants operate at maximum capacity.

The E10 plan is expected to revive domestic production, but it will take time, said Bui Ngoc Bao, chairman of the Vietnam Petroleum Association. “Building new facilities cannot be done overnight, meaning Vietnam will likely continue to rely on imported ethanol in the near term,” Bao said.

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Back at the pump, 34-year-old office worker Nguyen Hoang Nam said that he sometimes uses E5, but it’s not always available.

“What matters to us is whether this biofuel is compatible with motorbike engines and whether the price is reasonable,” he said. READ MORE

Excerpt from VNA/VNP/Vietnam Pictoral: Fuel distributors in the central province of Ha Tinh are entering the final stage of preparations to roll out E10 biofuel, completing upgrades to infrastructure and supply systems to ensure a smooth market transition without disruptions.

Following the Prime Minister’s Directive No. 09/CT-TTg dated March 19, 2026 on accelerating energy efficiency, energy transition and the adoption of cleaner transport fuels, the E10 rollout has been brought forward to April—two months ahead of schedule. In response, local petroleum businesses have proactively invested in storage facilities and blending technologies.

At PVOIL Vung Ang, early preparations have enabled the company to deploy both in-tank and in-line blending systems since late 2025. With a capacity of 25,000–30,000 cubic metres per month, the firm has already begun supplying E10 across its entire retail network from early 2026.

Meanwhile, Petrolimex Ha Tinh, which operates 82 outlets across the province, has switched to E10 from April 15, with full system-wide coverage expected by the second half of May.

Ha Tinh’s fuel distribution network includes four key wholesalers, 17 external distributors and 242 retail outlets, supported by total storage capacity exceeding 129,000 cubic metres across three depots, providing a solid foundation for uninterrupted supply during the transition.

Authorities are stepping up public communication to raise awareness of the benefits of biofuel for engines and the environment, while maintaining inspections to safeguard consumers' rights in terms of both product quality and pricing.

According to Tran Van Lam, from the provincial Department of Industry and Trade, regulatory oversight will focus on compliance with standards for quality, measurement and e-invoicing, ensuring a stable market without localised shortages.

Alongside major distributors, retailers and agents are upgrading storage systems and technical equipment, while strictly adhering to regulations on quality, pricing and product origin to ensure safe handling and distribution.

With infrastructure, supply plans and regulatory oversight all in place, Ha Tinh is poised for a smooth transition to E10, marking a significant step in advancing cleaner energy use and supporting sustainable socio-economic development. READ MORE