Biofuel development: Need strong "midwife"

Implementing the direction of the Minister of Industry and Trade, this morning (July 9) in Hanoi, Cong Thuong Newspaper coordinated with the Department of Science and Technology - Ministry of Industry and Trade to organize a training course on sustainable biofuel development.

Mr. Nguyen Phu Cuong - Deputy Director of the Department of Science and Technology - said: Developing biofuels helps create many direct and indirect jobs; expands the consumption of agricultural products; and contributes to reducing migration to urban areas.

The environment needs to be given top priority.

Decision 177/2007/QD-TTg of the Prime Minister on approving the "Project on development of biofuels to 2015, vision to 2025" with the goal of developing biofuels, a new, renewable form of energy to replace part of traditional fossil fuels, contributing to ensuring national energy security.

This is also an environmental project, because nowadays, the environment is always an issue of concern to the whole society, because toxic emissions have significantly affected human health, causing many incurable diseases, wasting money, even "losing money and getting sick". This is also a painful issue for the whole society, especially the leaders, therefore, the Party, State, and Government pay special attention and have assigned the Ministries and branches to build a system of mechanisms and policies, issue a series of legal documents, in order to create a legal corridor to attract investment, encourage industrial-scale production of biofuels.

Supply and demand have not met yet

On that basis, the biofuel production sector has attracted economic groups and private enterprises to invest in building factories. Up to now, the Government has approved 6 factories to build and put into operation: Fuel ethanol production factory (Dong Xanh Joint Stock Company) with a designed capacity of 130 million liters/year, but by the end of 2012 it was temporarily suspended due to debt settlement; Fuel ethanol production factory (Tung Lam Company Limited), with a designed capacity of 70 million liters/year; Dak To - Kon Tum bioethanol production factory with a designed capacity of 65 million liters/year; Dung Quat bioethanol production factory with a designed capacity of 100 million liters/year; Binh Phuoc fuel ethanol production factory under PVOIL with a designed capacity of 100 million liters/year.

Currently, those factories are all in a state of limited production; the ethanol production plant (Dai Viet Company) with a designed capacity of 70 million liters/year is only running at about 35% of its designed capacity.

In addition, there are currently 10 factories undergoing investment procedures.

By 2012, due to slow consumption of products, along with financial difficulties, the biofuel industry was in a state of "output" difficulties, so production was limited. Along with that, currently, the Phu Tho Ethanol Production Plant of the Vietnam Oil Corporation (PV OIL) in Tam Nong, Phu Tho has temporarily stopped, causing cassava growers (raw material area) to not be able to sell, thus making it even more difficult.

The invested enterprises all meet the requirement of running at 100% capacity, however, the output products consumed domestically only reach 20% to blend E5 gasoline and sell through the system of Vietnam Oil and Gas Group (PVN) and Saigon Petro Company; the remaining 80% is exported to countries: Japan, Korea, Philippines in the form of 99.5% and 96% Ethanol, but due to high export costs, enterprises face many difficulties.

Need a strong "midwife"

It is known that by the end of 2012, the country's fuel ethanol production capacity reached 535 million liters/year. When the factories come into operation, they will reach their designed capacity, so the ethanol output will be enough to blend 8.35 million tons of E5 gasoline or 4.17 million tons of E10 gasoline, ensuring enough and exceeding to supply the whole country's market with E5 gasoline from the beginning of 2013.

However, the development of the biofuel distribution network is still a challenge, causing manufacturing enterprises to not be able to consume many products, so they have to produce sparingly.

According to Ethanol production enterprises, one of the reasons hindering the consumption of bio-fuel products is that equipment and facilities for distributing E5 gasoline have not enjoyed preferential policies, because the transportation and consumption of E5 bio-fuel must have separate conditions compared to regular gasoline.

Mr. Nguyen Phu Cuong - Deputy Director of Science and Technology Department-said: The training of highly qualified human resources to serve the development of the biofuel industry according to Decision 177 of the Government, in the implementation still has many difficulties. To remove difficulties for enterprises, the Steering Committee of the project has integrated training tasks and the content of research topics into the pilot production project.

Accordingly, by the end of 2012, 23 masters, 60 engineers, and bachelors had been trained with majors suitable for the development of renewable energy, and factories had proactively trained many highly skilled technicians and technical workers to meet the development needs of the renewable energy industry.

Up to now, the legal basis for the organization of production and management of biofuels has been basically completed, through the approval and promulgation of the Fuel Alcohol Production Plan to serve the biofuel production industry until 2020, with a view to 2030; the roadmap for applying the blending ratio of biofuels with traditional fuels and systems of technical standards and regulations on E5, E10 gasoline, along with equipment used for storage, distribution at petrol and oil stores and auxiliary, and then transportation at petrol and oil depots...

Need protection policy for development

The representative of Vietnam Oil and Gas Group said: PVN is a pioneer in investing and introducing bio-fuel products, but due to the high initial cost and the lack of specific policies to support bio-fuel consumption, the consumption output is still far from the initial design capacity. Therefore, while waiting for the roadmap to take effect, factories have to produce at a moderate level, PVN is forced to export abroad at high costs, so it faces many difficulties.

However, to bring about the desired results initially, according to PVN, the unit that has invested the most, the Government needs to have long-term policies for investing enterprises such as exempting import tax on equipment and materials for storage, transportation, blending, and distribution of domestically produced biofuels; exempting environmental tax on base gasoline for blending E5 gasoline; reducing special consumption tax on E5 gasoline put into circulation (including base gasoline used to blend E5 gasoline); supporting VAT on E100 output products of biofuel factories and increasing import tax on E100 gasoline products, in order to protect the domestic production market.

In addition, the Government needs to have policies to support the development of cassava raw material sources for people to increase productivity without having to expand the area to still achieve high efficiency, providing enough raw materials for production input.

In particular, there must be a mechanism for propaganda so that people can understand the quality of the product and trust it. Because most countries in the world have support and encouragement policies through tax and fee incentives and a series of other support policies... If Vietnam can do that, the price of biofuels can compete with traditional gasoline and attract many businesses to participate, meeting the basic goals set out in Project 177.

According to Associate Professor, Dr. Le Anh Tuan - Deputy Director of the Institute of Dynamic Mechanics, National University - affirmed: Research results on biofuels for engines show that we can use E10 gasoline on automobile and motorbike engines in circulation without having to adjust the structure, early ignition angle, helping to significantly reduce CO and HC emissions because the combustible materials of the details in the engine fuel supply system are generally compatible with E10 gasoline. However, we need to pay attention to copper and natural rubber details; at the same time, it is necessary to clean or shorten the fuel filter maintenance replacement cycle, change the lubricating oil and should use E10 gasoline regularly. During operation, it is possible to use regular E10 and Ron92 gasoline without affecting the vehicle's performance. Therefore, biofuel products have been researched and evaluated by scientists as being suitable for the environment, not affecting vehicles, and even reducing the greenhouse effect.

According to trade news - PH