Dung Quat Biofuel Plant Resumes Ethanol Production After Decade-Long Shutdown

Overview

The Dung Quat Biofuel Plant, a VND 2,200 billion project that had been idle for over a decade, has resumed ethanol production at approximately 70% capacity. The plant is now supplying ethanol to the Dung Quat Refinery for blending into E10 gasoline, with plans to increase output to 300 m³ per day by the end of 2026. The restart is a key step in Vietnam’s biofuel roadmap and involves BSR (Binh Son Refining and Petrochemical Joint Stock Company), the operator of the Dung Quat Refinery.

Key Facts

• Total investment in the Dung Quat Biofuel Plant was over VND 2,200 billion.
• The plant was originally commissioned in 2009 and ceased operations in 2015, remaining idle for more than 10 years.
• Production restarted in early March 2026, with the first ethanol output after over a decade.
• Current production capacity is about 70%, yielding approximately 200 m³ of anhydrous ethanol per day.
• The ethanol is supplied to the Dung Quat Refinery for blending E10 gasoline.
• Target is to increase production to about 300 m³ per day by the end of 2026.
• The production process takes nearly 60 hours from raw material (cassava chips) to finished ethanol.

What Happened

According to the article, the Dung Quat Biofuel Plant, one of three large-scale ethanol fuel projects under the oil and gas sector, was shut down in 2015 due to market difficulties and high raw material costs. Following the government’s roadmap for E10 gasoline usage, Vietnam National Oil and Gas Group (Petrovietnam), BSR, and Central Petroleum Biofuel Joint Stock Company collaborated on a recovery plan.

The restart required extensive inspection, maintenance, and replacement of deteriorated technology components, including piping, equipment, electrical systems, and automation controls. After months of testing and calibration, the first ethanol batches were successfully produced in early March 2026. The plant now operates at about 70% capacity, producing around 200 m³ of anhydrous ethanol daily for E10 blending at the adjacent Dung Quat Refinery.

Market Context

BSR shares closed at VND 25,500 on July 10, 2026, down 3.23% on volume of 7.8 million shares. The stock trades on HOSE. The restart of the biofuel plant is a positive development for BSR’s integrated refining and petrochemical operations, as it supports the government’s E10 mandate and could reduce reliance on imported ethanol. However, the plant’s long idle period and the need for significant refurbishment highlight the challenges in Vietnam’s biofuel sector, which has struggled with economic viability.

Strategic Significance

The resumption of ethanol production at Dung Quat aligns with Vietnam’s national biofuel policy, which aims to increase the use of E10 gasoline. For BSR, the plant provides a captive source of ethanol for blending, potentially improving margins on gasoline sales and reducing supply chain risks. The plant’s location adjacent to the Dung Quat Refinery offers logistical advantages. The target to raise output to 300 m³/day by year-end suggests management’s confidence in demand and operational stability. However, the project’s history of economic challenges underscores the importance of sustained government support and favorable raw material costs.

What to Watch

• Monthly ethanol production volumes and capacity utilization rates at the Dung Quat Biofuel Plant.
• BSR’s Q3 2026 earnings release for commentary on ethanol blending margins and cost savings.
• Government policy updates on E10 blending mandates and any changes to ethanol import tariffs.
• Raw material (cassava) price trends, which directly impact production costs.
• Any further investment or expansion plans for the biofuel plant beyond the 300 m³/day target.