Recent policy changes in Vietnam and Malaysia have created major new opportunities for U.S. ethanol suppliers, strengthening the fuel’s role as a clean and affordable energy option in Southeast Asia, reports Ethanol Producer Magazine.
Vietnam’s Ministry of Industry and Trade has approved a new roadmap that will expand ethanol blending across all road fuels. The plan increases national integration of ethanol to 5% (E5) and 10% (E10) blends, marking one of the most significant shifts in the country’s fuel policy in years.
The announcement follows years of technical cooperation and policy support from the U.S. Grains & BioProducts Council and USDA’s Foreign Agricultural Service. Their work focused on broadening Vietnam’s ethanol mandate and lowering tariff barriers for U.S. exports.
Beginning in January, fuel distributors in Vietnam will start converting all RON95 gasoline—currently 80% of the market and containing no ethanol—to E10. Full compliance for RON95 is required by June 1. The remaining 20% of the market, E5 RON92, may continue until 2030, though distributors may voluntarily move to E10 earlier. All RON92 must shift to E10 by 2031.
Caleb Wurth, the Council’s regional director for Southeast Asia and Oceania, said the policy marks a turning point for U.S. producers. He noted that Vietnam’s entire gasoline pool—2.7 billion gallons annually—will now require ethanol. He said the country’s fuel ethanol demand will rise to 243 million gallons starting in June, with domestic output at roughly 84 million gallons. That leaves an export gap of about 160 million gallons, worth an estimated $300 million for U.S. suppliers.
Malaysia has also moved to strengthen market competitiveness for U.S. ethanol. Under the U.S.–Malaysia Reciprocal Trade Agreement announced in October, Malaysia has eliminated the import duty on U.S. denatured ethanol. The tariff on undenatured ethanol will be gradually reduced over nine years until it reaches zero.
Wurth said the agreement clears the way for importers and blenders in Malaysia to use denatured ethanol for future applications in gasoline, sustainable aviation fuel and marine fuels. With Malaysia consuming 4.5 billion gallons of gasoline annually—the second-largest gasoline market in Southeast Asia—he said the move represents an important step toward a cleaner energy future in the country.
