Vietnam's BSR, Germany's GIZ to develop SAF pilot plant using power-to-liquid tech

Vietnam's Binh Son Refining and Petrochemical signed a memorandum of understanding with Germany's GIZ on May 7 to develop a power-to-liquid pilot plant producing sustainable aviation fuel and "green methanol" at its facility, Vietnam's Ministry of Industry and Trade said in a statement May 8.

This marks Vietnam's first move into synthetic fuel production as the refining sector adapts to global decarbonization pressures, with the MOU covering feasibility studies and engineering design work for the plant, targeting readiness for engineering, procurement and construction bidding before June 2028.

The project will evaluate production pathways for e-methanol and e-SAF using renewable electricity combined with CO2 from biological by-products or direct air capture technology, BSR Chairman Bui Ngoc Duong said.

The pilot plant addresses emission-reduction challenges in aviation and maritime transport, both of which are under pressure to cut greenhouse gas emissions in line with international climate commitments.

Vietnam has set targets requiring at least 10% SAF use for short-haul flights by 2035 and 100% by 2050, with the amended Civil Aviation Law taking effect July 1, 2026, including provisions for sustainable fuels.

Pathway progress

Power-to-liquid technology produces synthetic liquid fuels by combining "green hydrogen" from renewable electricity with sustainable carbon sources to create low-carbon fuel products. The BSR-GIZ project will assess technical, technological, economic and environmental factors to determine commercial viability under Vietnam's operating conditions.

"Through cooperation with GIZ, we can verify the technical and economic feasibility of the project, providing a basis for considering the next steps in the investment chain," Duong said.

The collaboration extends GIZ's support for green hydrogen and Power-to-X development in Vietnam, including policy advice, capacity building and the establishment of the Green Hydrogen Center at the Vietnamese-German University. The International Power-to-X Hub, under Germany's International Climate Initiative, is supporting the pilot plant through GIZ's Energy Support Program in Vietnam.

"Through our collaboration with BSR on this pilot plant project, we aim to promote Vietnam's sustainable fuel production capacity and build a reference model for the Power-to-X sector in Vietnam," said Christiana Hageneder, director of the GIZ Energy Support Program in Vietnam.

The project timeline calls for joint planning and launch in May 2026, followed by detailed feasibility studies and plant engineering design. If technical conditions and approvals proceed as scheduled, the EPC bidding process will begin before June 2028.

Vietnam will voluntarily participate in the International Civil Aviation Organization's carbon offsetting and reduction mechanism for international aviation from early 2026, with mandatory participation from 2027.

BSR, established in 2008 to manage the Dung Quat Refinery, has operated as Vietnam's primary domestic refining facility. The company's move into synthetic fuel production marks a strategic shift from traditional petrochemical refining toward an integrated energy model aligned with green development and circular economy goals.

The pilot project could position Vietnam to meet domestic sustainable fuel demand and potentially supply regional markets as the aviation and maritime sectors accelerate decarbonization. The EU, US and Japan are also promoting policies to support the development of green fuels to meet emission-reduction targets in logistics and transportation chains.

Platts, part of S&P Global Energy, assessed SAF HEFA-SPK FOB Straits at $2,485/metric ton on May 8, unchanged from May 7.