Impact of the Introduction of Biofuel in the Transportation Sector in Indonesia

Abstract

Indonesia faces serious energy problems; its status as an oil exporter has changed to that of a net oil importer. Additionally, a highly subsidized price of fossil fuels, combined with a high dependency on oil, burden Indonesia's national budget. In 2006, the government enacted a Mix Energy Policy, which strives for a mixture of energy sources by introducing renewable energy into the existing energy systems. Among the several alternative renewable energy options, biofuel is perceived as having the most potential in Indonesia, due to favorable climate and the availability of land and technology. This paper assesses the impact of the introduction of biofuel in the transportation sector of Indonesia in terms of energy, economics and the environment. A linear programming model was built to simulate the impact of the introduction of biofuel. The author concludes that the introduction of biofuel may have a positive impact by partially replacing the oil used for domestic transportation, generating income due to export of excess production, creating jobs in several sectors, and reducing carbon emissions in a sustainable way. In the model, four scenarios are tested: under the scenario 'land and technology', with proper land allocation and technology development, biofuel production can reach 2,810 PJ/annum and reduce greenhouse gas emissions by 168 million tons/annum CO 2 -equivalent. Furthermore, a profit of 49 billion USD can be generated in 2025 (all maximum values).Keywords: biofuel; energy systems modeling; sustainable production; transportation sector

Large-scale plantations, bioenergy developments and land use change in Indonesia

“…Biofuel production has steadily increased in all of these countries except for Brazil, where it fell between 2010 and 2011 (US Energy Information Administration 2011). 15,941,837 16,962,198 19,112,241 20,802,405 22,391,362 24,766,975 Others* 12,175,552 12,661,198 13,452,053 16,261,624 19,645,100 20,897,370 (Jupesta et al 2011b). BioPremium, BioPertamax and Pertamax Plus used gasoline with an octane number of 88, 92 and 95, respectively.…”