To realize the goal of developing biofuels towards completely replacing fossil fuels, major challenges in technology, policy, and market must be overcome, said Minister of Industry and Trade Nguyen Hong Dien.

Addressing the international workshop titled "Developing Biofuels in the New Era - Key Tasks to Create a Sustainable Fuel Future for Vietnam” on August 27, minister Dien said "Energy transition towards green and clean is an inevitable global trend. In this trend, biofuels, especially E10 gasoline, are considered one of the strategic solutions, contributing to reducing greenhouse gas emissions, increasing the value of the agricultural sector, promoting the development of green energy industry, and simultaneously ensuring national energy security."

Mr. Dien affirmed that Vietnam has been and is fully preparing the legal basis, technical infrastructure, and production capacity to synchronously implement the use of E10 gasoline nationwide from 2026.

However, to realize the goal of developing biofuels towards completely replacing fossil fuels, major challenges in technology, policy, and market must be overcome. In addition, Vietnam must also improve its domestic biofuel production capacity as it only meets about 40% of the demand for E10 gasoline blending.

"This poses an urgent requirement to expand raw material areas, increase ethanol production capacity, and simultaneously build strong and feasible mechanisms and policies to encourage the production, import, and strategic reserve of biofuel sources," the minister emphasized.

Dr. Dao Duy Anh, Deputy Director of the Department of Innovation, Green Transformation and Industrial Promotion (Ministry of Industry and Trade), stated that domestic ethanol plants also face many obstacles, as out of a total of 7 projects, only 2 plants are operating at about 50% capacity, limiting the ability to actively control supply.

In addition to production difficulties, Vietnam also has limitations in its ability to distribute bio-gasoline, as the infrastructure conditions of many domestic gasoline retail stations, especially in high-density urban areas, are insufficient to simultaneously sell more than two types of gasoline.

Furthermore, communication efforts have not been strong enough to build widespread trust in the community, while financial, tax, and credit mechanisms for this sector still have many entanglements, failing to create a real impetus to promote production and consumption.

"People are still hesitant about the quality of bio-gasoline, especially for new-generation vehicles, motorcycles, and high-end cars," said Dr. Anh.

These bottlenecks have led to a situation where, in the period 2020 - 2024, the consumption of E5RON92 gasoline sharply decreased, accounting for only 21% of the market share (estimated for 2024). Some provinces like Dong Nai, Ho Chi Minh City, and Hanoi recorded E5RON92 sales accounting for less than 20% of total gasoline consumption.