Vietnam emerges as promising market for US ethanol

Vietnam emerges as promising market for US ethanol

Vietnam’s planned nationwide rollout of E10 petrol will open up opportunities for US businesses to increase ethanol exports.

Photo: baodautu.vn

The demand for ethanol as Vietnam implements E10 petrol is expected to create opportunities for the US to increase exports, given that the US is currently the largest supplier of ethanol to Vietnam.

According to a report released by the US Department of Agriculture (USDA), Vietnam’s increasing population and rapidly growing GDP have benefitted US agricultural exports, including ethanol.

The report pointed out that the US was the largest supplier of ethanol to Vietnam at $4.3 million in 2025, with a market share of 58 per cent, followed by China (26 per cent), and Japan (6 per cent).

The International Energy Agency forecasts Vietnam to consume around 11 billion litres in 2026 and expects consumption to continue growing throughout the decade.

Vietnam recently expanded its ethanol blending rate, increasing demand for ethanol for on-road fuel use. Previously, Vietnam had a 5 per cent ethanol blend rate mandated for only one grade of petrol.

On June 1, Vietnam successfully began implementing a national requirement that all 95-octane unleaded petrol must contain 10 per cent ethanol (E10). This development will most likely boost ethanol demand.

In addition, on March 31, 2025, in advance of the E10 ethanol mandate, Vietnam announced the unilateral reduction of most-favoured-nation tariffs on ethanol from 10 to 5 per cent.

In June 2025, the Vietnamese government agencies signed 20 memoranda of understanding worth $3 billion to buy US agricultural and timber products, aiming to balance trade and strengthen supply chains.

In October 2025, the US and Vietnam announced the Agreement on the Framework for Reciprocal, Fair, and Balanced Trade. Negotiations for this agreement continue. This agreement aims to grant US exporters access to Vietnam's market while enhancing US national and economic security. Vietnam will offer preferential market access for US exports by eliminating tariffs on nearly all goods, including food and agricultural products.

The US and Vietnam are working together to identify and eliminate obstacles to US agricultural products in the Vietnamese market. This work includes ensuring Vietnam respects US regulatory oversight and continues to quickly process US biotech applications. Additionally, efforts will be made to facilitate trade in agricultural products and ensure ongoing access for US goods.

VIR