bionasvietnam

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VISION - To Become the leading producer Of Sustainable Second Generation Renewable Energy which is environmentally friendly, do not cause deforestation, do not compete with food while providing socioeconomic value to local communities MISSION - To develop new sustainable green economic activity which will enhance economic growth in rural areas and at the same time eradicate poverty

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Status and potential for the development of biofuels and rural renewable energy: Viet Nam

Viet Nam’s economic boom and growing population will require greater amounts of energy; however, the country’s oil reserves are limited. The volume of oil exploited declined to 91% of the 2004 level in 2005, and 86% in 2006.2 To meet future oil demand, Viet Nam needs to import at an increasing rate of 11%–20% in 2020 and 50%–60% in 2050. Meanwhile, the world oil price continues to fluctuate and could rise to levels which may prove prohibitive for developing countries. Therefore, to prevent energy insecurity, Viet Nam needs to diversify its fuel sources, with a particular focus on green energy.

Biofuels could begin to partially replace the traditional fossil fuel in the near future. Among the members of the Association of Southeast Asian Nations (ASEAN), Indonesia, Malaysia, the Philippines, and Thailand have moved fast to develop biofuels. Viet Nam has just started and is assumed to be at least 10 years behind its ASEAN neighbors. In South Asia, India plans to develop 10 million ha of jatropha plantations by 2010 to produce 7.5 mt of biodiesel.

The Government of Viet Nam is giving increasing attention to biofuel development to promote socioeconomic development. In the Second East Asia Summit in Cebu, Philippines, Prime Minister Nguyen Tan Dung and 15 leaders of ASEAN countries signed the Cebu Declaration on East Asian Energy Security. The declaration noted that “biofuel and hydropower resources are renewable and as such harnessing these resources is an important aspect of our national energy policies.”3 Accordingly, the 16 nations agreed to work together to “reduce dependence on conventional fuels through intensified energy efficiency and conservation programs, hydropower, expansion of renewable energy systems and biofuel production and/or utilization, and for interested parties, civilian nuclear power”. The declaration also considered two important measures to achieve the goal.

These are :	to “encourage the use of biofuels and work towards freer trade on biofuels and a standard on biofuels used in engines and motor vehicles’’,
	to “encourage collective efforts in intensifying the search for new and renewable energy resources and technologies, including research and development in biofuels’’.

International Energy Market Outlook

Oil Market Outlook

World demand for oil in 2007 was 85.8 million barrels per day (mbbl/d) and is forecast to rise to 87.5 mbbl/d in 2008.5 The growth in demand is due to increased oil demand from all economies; however, the rapid economic growth in the People’s Republic of China (PRC) and India alone is responsible for 0.8 mbbl/d of the increase. In the short term, countries in South Asia, Latin America, and the Middle East are projected achieve high rates of economic growth, and hence, to greatly increase their demand for oil.

Average Global Demand Growth for Oil, 1997–2002, 2002–2007, 2007–2012 (‘000 barrels per day)

According to the Australian Bureau of Agricultural and Resource Economics,6 world oil demand is projected to reach 95.1 mbbl/d in 2012. The International Energy Agency (IEA)7 predicts that global oil demand could reach 116 mbbl/d in 2030—a 35% increasefrom 2007. The increase in global oil demand could lead to growing world energy insecurity, especially for countries that rely on oil and gas imports. The Middle East and the Russian Federation are forecast to be the dominant oil producers, and the price levels they set will have a major impact on the economies of developing countries. Sources from outside the Organization of Petroleum Exporting Countries (OPEC) may contribute 56.3 mbbl/d of the 95.2 mbbl/d production forecast for 2012, while OPEC countries may add 38.9 mbbl/d in 2012.

According to the IEA, the world’s oil resources should be enough to satisfy the demand in 2030. The share of output from OPEC countries is projected to rise from 42% of world oil supply in 2008 to 52% by 2030. OPEC’s collective output of conventional crude oil,
natural gas liquids, and non-conventional oil (mainly gas-to-liquids) is projected to be 46 mbbl/d in 2015 and 61 mbbl/d in 2030. Non-OPEC production will rise slowly and level off at around 47 mbbl/d by mid-2010, with a large proportion coming from non-conventional
sources, such as Canadian oil sands

While fossil fuels still account for more than 95% of the global transport fuel market, biofuel production is growing at a rate of roughly 15% per year—over 10 times that of oil. Under mounting pressure to improve domestic energy security and combat global climate
change, countries are now turning to the two main bioenergy sources—bioethanol and biodiesel—as fuels for road transport. In 2005, the volume of biofuel produced globally was around 0.65 mbbl/d, or 1% of the total fuel consumption for road transport.

In the European Union (EU) and the United States (US), biofuel development is being supported to promote growth in agriculture and forestry, reduce energy insecurity, and minimize global warming. In the PRC, in addition to these challenges, greater importance is attached to coping with the increasing energy consumption of the growing economy. Assuming that crude oil remains under pressure and there is broad-based support in many countries with agricultural surpluses, biofuels are likely to continue to receive much attention.8 The US plans to double the 2012 mandatory biofuels share of 7.5 billion gallons per year (equivalent to 490,000 bbl/d) required by the 2005 Renewable Fuels Act to 15billion gallons (980,000 bbl/d) by 2015. It is proposed that by 2022 the renewable share of the total energy mix in the US will more than double to 36 billion gallons. In the EU, a 10% mix of biofuels in transport fuels is likely to become mandatory by 2020, increasing from the probable mandate of 5.75% in 2010. Several other countries, such as Australia, Canada, the PRC, India, and Japan, will require sharesof between 5% and 10% by around 2010. In addition, existing subsidies (usually tax breaks) and import tariffs, at least in the EU and the US, are likely to stay in place at least until 2009.

Energy Demand in Viet Nam

Energy consumption in Viet Nam is reflected in the various forms of use, including electricity, fuel combustion for operating machines and motor vehicles, heating from biomass, and solid fossil (coal) and gaseous forms. Consumption of each type of energy has increased over time, and the country’s total energy consumption rose at an average rate of 4.8% per year during 1996–2005. The average increase in commercial energy consumption—coal, natural gas, electricity, and petroleum products—was 9.0% per year. Petrol and its associated products also increased their share of final energy consumption.

Biomass is the most important energy source in Viet Nam. It supplies around 60% of the country’s energy needs on average, and considerably more in the islands, mountains, and other remote areas. The volume of biomass used has remained stable since 1996. It is used for cooking by 70% of the 80% of the population that lives in rural and remote areas.

Market Outlook for Biofuel in Viet Nam

In assessing the market outlook for biofuels, it is assumed that if Viet Nam decides to produce biofuel to replace 5% of total demand for petroleum—
through blending to attain E5 and B5 starting 2010 up to 2025—then the country may be ready to produce biofuel to meet 10% of local petroleum demand in 2030 and 20% in 2050. Table 7 presents the biofuel prospects as indicated in Decision 177 and estimated by the MOIT. It also shows the research team’s own analysis of biofuel prospects in Viet Nam. The team’s estimates are based on the capacity of a number of companies and factories set up during the last few years. These estimates are much higher than those planned by the MOIT, therefore the figures given by the research team are considerably higher than those of the MOIT.