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Bio-diesel production using mobile processing units: A case in Indonesia

Author

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  • Kate, Joeri ten
  • Teunter, Ruud
  • Kusumastuti, Ratih Dyah
  • van Donk, Dirk Pieter

Abstract

Bio-diesel is a sustainable alternative to fossil fuel, in particular if the input materials are not edible. This paper considers the production of bio-diesel from rubber seeds, which are currently viewed as a waste product and discarded by farmers. We investigate whether technological innovations in local pre-processing at individual farms and oil production via mobile processing units (MPUs) visiting villages, makes bio-diesel production profitable for groups of farmers. A mixed integer programming model optimizing supply chain decisions is developed and applied to a specific case in Indonesia. We find that operating the relatively expensive MPUs at maximum capacity is essential for economic sustainability. Furthermore, variations in the price of bio-diesel affect the profitability and governments may consider offering minimum price guarantees.

Suggested Citation

  • Kate, Joeri ten & Teunter, Ruud & Kusumastuti, Ratih Dyah & van Donk, Dirk Pieter, 2017. "Bio-diesel production using mobile processing units: A case in Indonesia," Agricultural Systems, Elsevier, vol. 152(C), pages 121-130.
    • Handle: RePEc:eee:agisys:v:152:y:2017:i:c:p:121-130
    DOI: 10.1016/j.agsy.2016.12.015
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