Decision No. 177/2007/QD-TTg approving the scheme on development of biofuels up to 2015, with a vision to 2025

48 OFFICIAL GAZETTE Issuenos O+-05fNovcmbe r 2007 (GOng Bao nos 791-792lNovember27,2007) DECISION No. 17712007/QD.TTg OF NOVEMBER 20,2007, APPROVING THE SCHEMEONDEVELOPMENT OFBIOFUELS UP TO 2015, WITH A VISION m 2025 THE PRIME MINISTER Pursuant to the December 25, 2001 Law on Organization ofthe Government; At the proposal of the Minister of Industry and Trade, Article 1.-Toapprove thescheme ondevelopment ofbiofuels up to 2015, witha vision to 2025 (below referred toasthescheme forshort) withthe following principal contents: I. OBJECTIVES 1. General objectives: Todevelopbiofuel, a newandrenewable energy, for use as an alternative to partially replace conventional fossil fuels, contributing to assuring energy security and environmental protection. 2. Specific objectives for eachperiod: aJ From now to 2010: - To formulate a systemof mechanisms, policies and legal documents in order to createa legal setting for attracting investment in and encouraging mdustrial-scale prouucuon auu U~ uf \)iu[u~h. Tu raise public awareness aboutthe important role and great benefits of biofuels. - To map out a schedule for U:5C of biofucls as an alternative to partially replace fossil fuels currently used for transportation and other industries, and formulate a pilotmodel ofbiofuel distribution insome provinces andcities; - To research into, approach and master technologies forproducing biofuels from biomass and © VIETNAM LAW & LEGAL FORUM Issue nos 04-05JNovember 2007 OFFICIAL GAZETTE 49 (Gong Bao nos 791-792lNovember 27,2007) appropriate blending technologies, and solve the to satisfy the need for human resources for biofuel question of raising the efficiency of conversion of development. biomass into fuel; d Vision to 2025: - To plan and develop raw material areas for The biofuel production technology applied in production of alcohol, vegetable oil and animal fat Vietnam will attain the world's advanced leve1. The (sugar cane, cassava, maize, oil-bearing plants, ethanol andvegetable oiloutputwillreach 1.8million recovered animal fat, etc.) for biofuel production. tons, satisfying some 5% of the whole country's - To train human resources to initially satisfythe gasoline and oil demand. biofuel developmentneed; - By 2010, to develop various models of trial II. MAINTASKS production and use of biofuels with a total annual output of l00,(X}() tons of E5 and 50,000 tons of B5 1.Conducting scientific research andtechnological in order to satisfy 0.4% of the whole country's development (R-D), deploying rrial production of gasoline find oil demand; products to serve hiofueJ development- - To approach and master the technology for - Tostudy, elaborate andpromulgate mechanisms, producing seedlingsof high-yieldplants for biofuel policies and legal documents concerning scientific production. research, technological developrnere; transfer, bl During 2011-2015: production and use ofbiofuel, including-Investment - To research into, master and produce materials promotion policies and mechanisms to promote and additives for biofuel production; scientific research, technology transfer andproduction development; the system of technical steodards and - To develop the production and extensiveuse of regulations andthe scheduleof applicaticwt(Vietnarn biofuelsas an alternative to conventional fossilfuels. standards and technical regulations applicable to Toexpand biofuel production establishments and the production and use uf E5 und B5, ccmputsory networkof distribution of biofuels for transportation environmental requirements, and the schedule of and other industries; application to biofuel users in the direction of - To develop raw material areas under planning, encouraging extensive INf". nfhinfllf"k); putraw-material plantvarieties of highyieldandpest - To approach and master the technology for resistance into mass production, thus ensuring blending gasoline, condensate, naphtha petroleum sufficient supplyofbiomass materials to be converted dieselwithethanol, biodiesel andadditives tnproduce into biofuel; gasoline E5 (95% petroleum gasoline and 5$ ethanol) - To successfully apply modern fermentation and diesel oil B5 (95% petroleum diesel and 5% technologies inordertodiversify rawmaterial sources biodiesel), and put into operationblending facilities to be used in the prOCC33 of converting biomass into with an annual output or loo,(X)() tons Of E5 and biofuel; 50,000 tons of B5. To develop a network of product - To build and develop biofuel production and distributors and sellers throughout the country, using ~ stnblj shmt:".nt,> nationwide. By 1015, th~ O~ltpllt especially in hie cities sur-h as Hanoi, An Chi Minh of ethanol and vegetable oil willreach 250,000 tons City, Da Nang; (enough for blending 5 million tons of E5 and B5), - To approach and master the modem technology satisfying 1% of the wholecountry'sgasolineandoil for the Production of ethanol from different biomass demand; sources: production and use of highly effective - To train a pool of specialists in major domains enzyme systemsin the conversionof raw materials, related to biofuel production and technical workers anti-contamination antibiotics, microorganisms © VIETNAM LAW &: LEGAL FORUM

50 OFFICIAL GAZETTE Issue nos 04-05/November 2007 (Gong 880 nos 791-792/November 27,2007) capable of polystromatic fermentation and yielding in biofuel productionand providing services related high efficiency, energy-conserving continuous to biofuel products; fermentation systems (with circulation of enzymes - To form and strongly develop the biofuel and boiling water, recovery of excessivevapor, etc.), production industry, and build an open market To master the modem and high-performance favorable for promotmg enterprises' investment in technology forthe production of standardethanolfor projects on production and tradingof and provision biofuelproduction. Todevelop synchronously alcohol of services related to biofuelproducts. productionestablishments of mediumandlargesizes 3. BUilding biofuel developrneru potential: to supply sufficient ethanol for blending E5; a/ Human resources training: - Toconduct scientific researchand technological development, and organize the production and - To send specializedscientific and technological consumpaon of biodiesel from standard-quality personnel to countries with a developed biofuel vegetableoil and animal fat, which is to be blended production industryto attendshort-term professional with petroleum diesel into diesel B5. To develop trainingcourses of between 6 and 12months; biofuel production establishments of various sizes - Tu train at home technological engineers suitable toraw material areasand sources,in orderto specialized in the technology for biofuel production ensure sui4tient supply of biodiesel for blending B5; from the stage of biomass productionto the stage of - 10 ptan and develop raw material areas for the conversion of biomass into fuels under the scheme: production: of alcohol, vegetable oil and animal fat -Totrain technicalworkers who arehighlyskilled (sugar cene, cassava, maize, oil-bearing plants, in biofuel production technology for the recovered ·ftnimaI far. etc.) in the direction of fully implementation of the scheme in enterprises and tapping oMsting land areas and at the same time localities; efficiently using land areas in each locality, and - To train managerial officers of ministries, promoting the advantages of each raw materialarea. branches andenterprises inknowledge aboutandstate To select and createnew sugarcane, cassava,maize, management capacity with regard to biofuel rice and eil-bearing plant varieties with fairly high development and application. yieldscomparedwith those grownaround the world bI Buildingmaterial andtechnical foundations and and suilaww to pI all ned laud areas, especially arid and modernizing machinery and equipment: degenerated land whichcannot be used for growing - To make intensive investment in upgrading the human food crops; systemof agencies engagedin scientific researchand - To conduct scientific research, technological technological development related to biofuels; to development and production of necessary additives additionally supply modern machinery and and chemicals for use in blending biofuels with equipment and modernize material and technical conventionalfossil gasoline and oil into fuel blends foundations for f'xi"-tine l~horlltnrie~ so that they are which satisfy fuel quality standards and able to approach and receive technologies for envirorunental safetyrequirements. producingcommercial biofuels from biomass; 2.Foundinganddeveloping the biofuel production - To invest in and put into operation a number of industry: advanced laboratories capable of efficiently ~ To establish and encourage enterprises of all facilitating research into biofuel raw materials, economic sectors to invest in researching into, production and blendingtechnologies, givingspecial transferring, receiving and applying technologies to priority to researches into basic techniques for the biofuelproduction; to efficiently applynew technical purposeof quickly creatingproducts and producing and technological advances toproducingand trading biofuels on an industrial scale; © VIETNAM lA-IN & lEGA.l FORUM Issue nos 04.QS/November 2007 OFFICIAL GAZETTE 51 (Gong 8ao nos 791· 792!November 27,2007) - To establish and operate online a national in biofuel production. The State shall adopt database on biofuels in order to promptly and preferential policieson credit,tax and land userights adequately supply and exchange the latest basic for enterprises which invest in the development of information on biofuel production equipment and biofuel production. technology to concerned units and mdividuals. 2. Increasing investment and diversifying funding 4. International cooperation: sources for the effective implementation of the - Totake the initiativein receiving, mastering and scheme: transferring technical and technological advances and -The total fundforimplementation of thescheme's new scientific achievements related to biofuel contentsshall be determinedon the basis of the fund productionin the world so as to quickly, vigorously of each specific component project, suQject or task and sustainably develop Vietnam's biofuel production approved by n competent authority. Anmtully, the industry; State shall increasingly allocate state t.dget funds - To organize the implementation of around 20 for the scheme implementation. To increase schemes and projects on international cooperation investment capital and diversify investment capital sources from enterprises, organiza:ttons and with foreign scientific and technological individuals at homeandabroad,official deselopment organizations, foreignscientists and technologists in assistance, foreign directinvestment capital and other conducting research into. producing and using international cooperation capital sources for biofuel biofuelsin Vietnam. development in Vietnam; -Thetotalstatebudgetfundfortheimp!l:mentation III. MAJOR SOLUTIONS of the scheme in nine years (2007-2015) ill estimated at aroundVND 259.2 billion (VND 28.8 billionper 1. Stepping up the application of researchresults year on average). This funding source shall be used topractical production, promoting technology transfer only for basic research, applied research scientific and creating an invesanem environment favorable research andtechnological development, research for for the developmentof biofue1 production: technological improvement and renewai m order to - To step up the implementation of projects on increase biofueloutput,qualityand compeiitiveness, basic research, applied research and research and produce on a trial basts tnotuet produces support development (R-D) to absorb andmastertechnologies projects ontransfer of technologies forindustrial-scale for producing biofuels and necessary additive production of biofuels; developmentof rnmerial and chemicals, and projects on trial production, technical foundations, additional supply otPMlChinery international cooperation, technology transfer and and equipment; training of human .,.sources; industrial-scale productionof variousbiofuels; international cooperation and some otaer related - To encourage the applir.:ltion of !'>.r.i~ntifir. activities underthe scheme; research and technological development results to - Investment capital for development ofthebiofuel production, boost domestic technology transfer and production industry shall be provided by enterprises. import of technologies from developedcountriesfor 3. Intensifying the building of material and producing biofuels and additive chemicals used in technical foundations and training of humanresources fuel blending in order to promotebiofuelproduction to satisfy the biofueldevelopment need: and consumption; - Tostep up the buildingof materialand technical - To create an open market favorable for biofuel foundations, supply more modern machinery and development, stepup theestablishment of enterprises equipmentfor laboratories and agencies engaged in of alleconomicsectorsand encourage themto invest biofuelresearch, application and development; © VIETNAM LAW & LEGAL FORUM

52 OFFICIAL GAZETTE Issue nos 04-05lNovember 2007 (Gong Bao nos 191-192JNovember 27, 2001) - Toactively implement the planning on andapply biofuel raw materials, additives and products, synchronous solutions todeveloping biomass material enterprises areencouraged toannounce by themselves areas in a sustainable manner at all stages from institutional standards on the basis of referenceto G7 seedling preparation to application of farming countries' standards; techniques awl production ufbiurnass LU be supplied - '10 step up the formulation and promulgation ot to biofuel production establislunents; at the same time, mechanisms and policies to attract investment and incorporate in the planningnew biofuel production encourage talentedpersonnel to take part in scientific establishments f'ng:lg~rl in proce-ssing, trading in snd research, technological development for biofuel providing services relatedto biofuels of high quality production, and sustainable production and andcompetitiveness, thussatisfying market demand; consumption of biofuels. In the 2007-2015 period, - TointlJnsi fy the training of human resources with newgraduates recruited to workin biotuelproduction high teclmological qualifications for the biofuel establishments and biofuelresearch agencies will be productiaa industry, including training, givenpriority in being selected to attendprofessional supplemeatary training and retraining of trainingprograms at home or abroad; technological bachelors, engineers and technicians; - To promote and support the research into and to raise managementcapacity to satisfythe need for hybridization of new microorganism species and sustainable development of Vietnam's biofuel industrial plant varieties (including also genetically production mdustry. modified species and plant varieties) and improve the 4. Per&cting the systemof mechanisms, policies process of industrial-scale cultivation to be applied and legal documents for biofuel development: to production of high-qualityraw materials in large quantities to satisfy the need for development of - To renew tax mechanisms and policies, provide Vietnam's biofuel productionindustry; concessiooalloans and landuserights to enterprises, organizatiess and individuals at home and abroad in - To step up the strict and adequate enforcement order to ennonmge and create favorable conditions of regulations on intellectual property, including for them to-invest in developing biofuel production protection of copyrightand industrial propertyrights in Vietnara In the 2007-2015 period, to classify to microorganisms, plant varieties, technological investrrers in biofuelproduction asa domaineligible processes, machinery, equipment, etc., involved in the biofucl production tcchnology. for special ~vestment incentives. Biofuelproduction enterprises are entitled to income tax exemption or 5. Expanding and promoting international reduction for biofuel products according to the cooperation on study of biofuel development Government's Decree No. 2412007/ND-CP of experience: February .'4, 2007, detailing the implementation of - To intensify bilateral cooperation and expand the Law on EnterpriseIncomeTax. They are entitled multilateral cooperation with countries with a to the highest landrent and landuse incentivesfor 20 developed biofuel industry as well as foreign years. Raw materials, components, machinery and organizations and individuals with biofuel equipment to be used in scientific research and development potential in order to learn their technological development forbiofue1 production are experience in biofuel development; exempted from import tax. Raw materials, - To take the initiative in formulating and components, machinery and equipment used for implementing international cooperation programs and biofuelproductionare eligiblefor the lowest import projects in order to make usc of the international I.i1A rate; community's assi stunce in tenus of experience, - Pending the formulation of a systemof Vietnam knowledge, finance and equipment, and attract technical standards and regulations applicable to investment fordevelopment of biofuel production and © VIETNAM LAW & LEGAL FORUM Issue nos 04.Q5INovembeJl 2007 OFFICIAL GAZETTE 53 (Gong 880 (lOS 791-792/NJovember 27, 2007) consumption in Vietnam. distribution of biofuel products; 6. Raising public awareness about biofuel - Assume the prime responsibility for, and development: coordinate with concerned ministries, branches and To step up communication and popularization localities in, popularizing knowledge to the public efforts tomake thepublicaware oftheimportant role, about the role and benefits ofbiofuels to the country's great socio-economic benefits and environmental sustainable development; protection effect of biofuel in sustainable - The Minister of Industry and Trade shall set up development. To widely propagate information on an inter-branch coordinating commission to organize the building and development of a biofueJ market the implementation of the scheme on development and the use of biofuels in Vietnam. of biofuels up to 2015, with a vision to 2025. This commission will beheaded by a Icaut=ruf01eMinistry IV. ORGANIZATION OF ofIndustry and Trade. The composition end.operating IMPLEMENTATION regulation of the inter-branch coordinating commission and it" assistance office wilfbP: rlf'.C:iclf'n 1. The Ministry of Industry and Trade shall: by the Minister of Industry and Trade. - Assume the prime responsibility for, and 2. The Ministry of Agriculture aad Rural coordinate with concerned ministries, branches, Development shall; organizations and individuals in, organizing the - Assume the prime responsibility for, and efficient and timely implementation of the scheme, coordinate with the Ministry of Industry 'and Trade annually reporting it to the Prime Minister; assume and the Ministry of Planning and Incasnrenr in, the prime responsibility for organizing a review elaborating the planning on developmeat of raw conference by the end of 2010to assess results of the material areas for the biofuel industry; first three years' implementation of the scheme and - Assume the prime responsibility for, and draw experience for the implementation of the scheme coordinate with the Ministry of Plsening and in the 2011-2015 period; Investment and the Ministry of Finance in, - Assume the prime responsibility for working out formulating and organizing the applicatice efpolicies lcug-tenn and annual state budget plans fOI on incentives and supports for production gfbi0rrta.:5s implementation of the scheme, then submit them to materials for biofuel production. the Ministry of Planning and Investment and the 3. The Ministry of Science and Technoli>gy shall: Ministry ofFinanr-e for synthesisnrion and cnhrnissirm - Based on Its own functions, tasks, powers and to the Prime Minister for approval; state management scope, coordinate with !hi Ministry - Assume the prime responsibility for drawing up of Industry and Trade in organizing efficient a list of biofuel projects eligible for investment ;mplf',mF'nt~f;{,1n of thf' ,>(',hf',mf','O;: ('ontl".nt<:. fl"l!ltl"-cl to incentives and formulating a mechanism for applying scientific research and development of the biofuel these incentives; production technology; - Assume the prime responsibility for, and - Assume the prime responsibility for. and coordinate with the Ministry of Foreign Affairs and coordinate with the Ministry of Industry and Trade the Ministry of Science and Technology in organizing and concerned ministries and branches in, formulating international cooperation in biofuel development; and promulgating or submitting to competent - Assume the prime responsibility for, and authorities for promulgatron mechamsms and coordinate with the provincial/municipal People's preferential policies for scientific research and Committees in, setting up a system of supply and technological development for biofuel production; © VIETNAM LAW s LEGAL FORUM OFFICIAL GAZETTE \'Ssue nos 04-Q5lNVY~I\llt:1 100T (C6ng &10 nos 791-792lNovemoor27,2007) legal documents on inteuecrual properry rprorecnon of industrial propertyrightsandcopyright), technical standards and regulations applicable to this domain. 4. The Ministry of Planning and Investment and the Ministry of Finance shall: - Incorporate the allocation of funds and provide guidance on the usc of funds in annual and long-term funding plans for the effective and timely implementation ofthe scheme's contents and tasks; Assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade andconcemed ministries andbranches in,formulating and promalgating or submitting to competent authorities bpromulgation mechanisms andpolicies on tax and investment incentives, a list of biofuel production projects eligible forinvestment incentiyes, and mectramsms for application of preferential policies. 5. The Ministry of Education and Trainingshall: ASSURl8 the prime responsibility for, and coordinate with the Ministry of Industry and Trade andconcemed ministriesand branchesin, organizing the trainin:: of human resources to satisfy the biofuel develcpmeet need. 6. Mini'stries, branches, localities, enterprises, organizations end individuals that wish to take part in implemsering the scheme's contents andtasksshall register with the Ministry of Industry and Trade for considerationand permission. Artick2 .. ThisDecisiontakeseffect 15days after its publioalion in "eONG BAD." Article 3.- The Minister of Industry and Trade, ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial/municipal People's Committees, and concerned organizations and individuals shall implement this Decision. For the Prime Minister Deputy Prime Minister HOANG TRUNG HAl © VIETNAM LAW & LEGAL FORUM