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Training Course on Policy and Pricing Structure of Gasohol and BioEthanol Pricing Experiences from USA, Brazil and Thailand

15/01/2019 - 01:18


     Under phase II of the project “Overcoming Policy, Market and Technological Barriers to Support Technological Innovation and South- South Technology Transfer: The Pilot case of Ethanol Production from Cassava”, Food Industries Research Institute together with the Ministry of Industry and Trade organized a Training Course on Policy and Pricing Structure of Gasohol and Bio-Ethanol Pricing Experiences from USA, Brazil and Thailand on Hanoi from 15-17th November, 2018. Two lecturers from Thailand, Assist. Prof. Veara Loha from King Mongkut’s University of Technology Thonburi and Dr. Athikom Bangviwat from ASEAN Center for Energy as well as experts from Institute of Renewable Energy Promotion- Laos’ Ministry of Energy and Mines, Investment and Strategy Division under Petroleum Technical Department of Vietnam National Petroleum Group (Petrolimex), Department of Energy Saving and Sustainable Development, Department of Science and Technology, Department of Domestic Market, Viet Nam Petroleum Institute, Industrial Policy and Strategy Institute – Ministry of Industry and Trade, Ministry of Agriculture and Rural Development joined the course.


Assist. Prof. Veara Loha delivered the speech on bioethanol production


       This activity aims to promote bioethanol production in Laos, Myanmar and Viet Nam through improving gasohol-related policies and pricing structure in these countries. On 16th November 2018, the lecturers made presentations on bioethanol production and gasohol pricing structure in Brazil, USA and Thailand. Lecturers and experts from Laos and Viet Nam exchanged ideas on this field. On the next day, participants visited FIRI and the Bioethanol Pilot Plant in FIRI where the lecturers held discussion with and got feedbacks from participants and reviewed the training course. On this basis, experts and policy-makers in Viet Nam, Laos could make suggessions on supporting policies and mechanism for bioethanol production, and promotion of E5 consumption in the two countries. A forum on policies for gasohol pricing structure will be conducted in Hanoi in the coming time.  


Dr. Athikom Bangviwat made presentation on gasohol pricing structure in USA, Brazil and Thailand


        As mentioned in previous articles, to meet the world demands for a clean and green energy, bioethanol as one kind of biofuels has been widely produced and utilized in many countries in order to reduce green house gas emission and protect the environment. Among bioethanol-producing countries, United States, Brazil and Thailand are considered as the successful cases. Bioethanol is produced in US from corn and in Brazil from sugarcane. With advanced technologies and the abundance of high quality raw materials (sugarcane with high sugar content and corn with high starch content), bioethanol has been produced in both Brazil and USA at very competitive price, much cheaper than gasoline price. Therefore, when blended with ethanol to increase the octane index, it makes the price of gasohol lower than that of gasoline. The more ethanol, the cheaper the price of gasohol will be. Brazil and US are the two largest exporters of bio-ethanol. The requirement of phasing out MTBE and high octane index have boosted the demand for bioethanol in the world. Bioethanol made in the US remains the cheapest among blending components to increase the octane index in the world. It can be observed that bioethanol production in the US increased rapidly from 2007 to 2017. In Brazil, together with gasohol competitive price, the Government also has supporting policies to promote the production and utilization of gasohol. The Brazilian Government committed to implement the plan for increasing the share of sustainable bioenergy up to 18% in the Brazilian energy matrix by 2030. The Brazilian government also sets up a quota for imported ethanol at 600 million liters and applies a tariff of 20% for any bioethanol exceeding the quota to protect domestic bioethanol production.


Introducing bioethanol pilot plant in FIRI


        Different from American and Brazilian cases, bioethanol is produced from cassava in Thailand. Therefore, production cost of bioethanol is higher than that of gasoline. With policies of supporting farmers of cassava production and developing research on cassava of high quality, with high starch content, investing in bioethanol production technology with high productivity and maintaining price subsidy for E20 and E85 through the State Oil Fund, Thai gasohol is cheaper than gasoline. The more bioethanol is blended in gasohol, the cheaper the price will be.


Participants joined in the training course (photographs by Cao Xuan Bach, Khuat ThiThuy, Dinh Duc Hien)


        In Vietnam, since January 1st, 2018 gasoline RON 92 has been replaced by bio fuel E5 RON 92 by the Decision of Government. This is a positive signal for bioethanol production in Viet Nam. However, bioethanol-producing enterprises are still facing many difficulties. Cost for bioethanol production from cassava in Vietnam is  higher than that of gasoline. The supply source of cassava material is unstable and cannot meet the production demand. Moreover, bioethanol bears the special consumption tax of 8%. Bioethanol production in Viet Nam needs supporting policies from the Government.



                                                                                                                            By Khuat Thi Thuy

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