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

Author

Listed:
  • Joni Jupesta

    (Department of Management Science and Technology, Graduate School of Engineering, Tohoku University, Aoba yama 6-6-11-808, Sendai, 980-8579, Japan)

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).

Suggested Citation

  • Joni Jupesta, 2010. "Impact of the Introduction of Biofuel in the Transportation Sector in Indonesia," Sustainability, MDPI, vol. 2(6), pages 1-18, June.
    • Handle: RePEc:gam:jsusta:v:2:y:2010:i:6:p:1831-1848:d:8763
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    Citations

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    Cited by:

    1. Peter Mako & Andrej Dávid & Patrik Böhm & Sorin Savu, 2021. "Sustainable Transport in the Danube Region," Sustainability, MDPI, vol. 13(12), pages 1-21, June.
    2. Satya Widya Yudha & Benny Tjahjono & Athanasios Kolios, 2018. "A PESTLE Policy Mapping and Stakeholder Analysis of Indonesia’s Fossil Fuel Energy Industry," Energies, MDPI, vol. 11(5), pages 1-22, May.
    3. Hunsberger, Carol & German, Laura & Goetz, Ariane, 2017. "“Unbundling” the biofuel promise: Querying the ability of liquid biofuels to deliver on socio-economic policy expectations," Energy Policy, Elsevier, vol. 108(C), pages 791-805.
    4. Jupesta, Joni, 2012. "Modeling technological changes in the biofuel production system in Indonesia," Applied Energy, Elsevier, vol. 90(1), pages 211-217.
    5. Rahmadi, Arie & Aye, Lu & Moore, Graham, 2013. "The feasibility and implications for conventional liquid fossil fuel of the Indonesian biofuel target in 2025," Energy Policy, Elsevier, vol. 61(C), pages 12-21.
    6. Khatiwada, Dilip & Silveira, Semida, 2017. "Scenarios for bioethanol production in Indonesia: How can we meet mandatory blending targets?," Energy, Elsevier, vol. 119(C), pages 351-361.

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