Vietnam will switch to fuel blended with ethanol to increase U.S. exports

Vietnam plans to switch to ethanol-blended fuel from next year. This will allow the Southeast Asian nation to import corn and ethanol from the United States.

According to documents reviewed by the ministry, the Ministry of Industry and Trade submitted a proposal for the government to switch from RON95 and RON92 unleaded gasoline standards to E10 -- a blend of gasoline and up to 10% bioethanol. The current unleaded gasoline standard is RON92 and RON95.

According to a document, the switch will allow the importation of American corn and ethanol to Vietnam, as the Southeast Asian nation seeks to reduce its trade deficit with the United States, which is its largest export market.

It said: "This is a quick and effective solution to increase imports of goods coming from the United States while reducing the surplus."

The United States had a $123 billion trade deficit with Vietnam in the past year, which was one of its largest globally.

In March, Vietnam reduced its import tariff for ethanol from 10% to 5%. Donald Trump stated last month that Vietnam can import U.S. goods with zero tariffs.

Vietnam, whose annual consumption of petroleum products is less than 30 millions tons, has pledged to increase imports of American products such as aircraft, LNG, crude oils, and farm products.

Customs data from Vietnam shows that imports of corn and fuels to Vietnam in the first seven month of this year increased by 22.7%, but they were not specifically listed.

One of the documents stated that the country has six ethanol factories with a combined production capacity of 600,000.00 cubic metres per year. This is enough to meet around 40% of demand for E10 fuel.

Documents also stated that using E10 gas would reduce carbon emissions, and be in line with the country's Net Zero targets.

Vietnam has pledged to be carbon neutral by the year 2050 during the United Nations Climate Conference in Glasgow (COP26), which will take place in November 2021. Khanh Vu, David Stanway and David Stanway are the editors.

(source: Reuters)