HANOI (Reuters) — Vietnam is preparing to fully adopt ethanol-blended gasoline starting next year, a move that could increase its demand for U.S. ethanol and corn.
According to documents reviewed by Reuters, the Ministry of Industry and Trade has proposed shifting nationwide fuel standards to E10, a blend of gasoline with up to 10% bioethanol. At present, the country primarily relies on RON95 and RON92 unleaded fuel.
The transition would open the door for greater imports from the United States, particularly ethanol and corn, as Vietnam looks to reduce its large trade surplus with its biggest export market.
Vietnam set to adopt ethanol-blended gasoline, opening door for more U.S. trade
“This is one of the fast and practical solutions to expand imports from the U.S. and help shrink the trade gap,” one of the ministry documents stated.
Last year, the U.S. recorded a $123 billion trade deficit with Vietnam, among its largest worldwide.
To facilitate the shift, Vietnam lowered its ethanol import tariff from 10% to 5% in March. Former U.S. President Donald Trump recently suggested Vietnam could eventually bring in American products tariff-free.
Vietnam consumes under 30 million tons of petroleum annually and has also pledged to increase imports of other U.S. goods such as aircraft, liquefied natural gas (LNG), crude oil, and agricultural products.
A vehicle is refueled with ethanol-blended biodiesel at a gas station in Nevada, Iowa.
Customs data show that imports from the U.S. grew 22.7% year-on-year in the first seven months of 2023 to $10.54 billion, though corn and fuels were not specifically listed.
Currently, six ethanol plants operate in Vietnam with a combined annual output of 600,000 cubic meters—enough to cover only about 40% of projected E10 demand.
Officials added that adopting E10 fuel would help cut carbon emissions and support Vietnam’s pledge to reach net zero by 2050, a commitment made at the COP26 climate summit in Glasgow in 2021.