IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i3p420-d201638.html
   My bibliography  Save this article

Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia

Author

Listed:
  • Fumi Harahap

    (Energy and Climate Studies Unit, Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, Sweden
    International Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, Austria)

  • Sylvain Leduc

    (International Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, Austria)

  • Sennai Mesfun

    (International Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, Austria)

  • Dilip Khatiwada

    (Energy and Climate Studies Unit, Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, Sweden)

  • Florian Kraxner

    (International Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, Austria)

  • Semida Silveira

    (Energy and Climate Studies Unit, Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, Sweden)

Abstract

Significant amounts of biomass residues were generated in Indonesia. While untreated, residues emit greenhouse gases during the decomposition process. On the other hand, if efficiently utilized, these residues could be used to produce value-added products. This study investigates opportunities for harnessing the full potential of palm oil residues (i.e., empty fruit bunches, kernel shells, fiber, and mill effluent). As far as we are aware, the study is the first attempt to model the palm oil supply chain in a geographically explicit way while considering regional infrastructures in Sumatra Island, Indonesia. The BeWhere model, a mixed integer linear programming model for energy system optimization, was used to assess the costs and benefits of optimizing the regional palm oil supply chain. Different scenarios were investigated, considering current policies and new practices leading to improved yields in small-scale plantations and power grid connectivity. The study shows that a more efficient palm oil supply chain can pave the way for the country to meet up to 50% of its national bioenergy targets by 2025, and emission reductions of up to 40 MtCO 2 eq/year. As much as 50% of the electricity demand in Sumatra could be met if residues are efficiently used and grid connections are available. We recommend that system improvements be done in stages. In the short to medium term, improving the smallholder plantation yield is the most optimal way to maximize regional economic gains from the palm oil industry. In the medium to long term, improving electricity grid connection to palm oil mills could bring higher economic value as excess electricity is commercialized.

Suggested Citation

  • Fumi Harahap & Sylvain Leduc & Sennai Mesfun & Dilip Khatiwada & Florian Kraxner & Semida Silveira, 2019. "Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia," Energies, MDPI, vol. 12(3), pages 1-24, January.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:3:p:420-:d:201638
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/3/420/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/12/3/420/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mafakheri, Fereshteh & Nasiri, Fuzhan, 2014. "Modeling of biomass-to-energy supply chain operations: Applications, challenges and research directions," Energy Policy, Elsevier, vol. 67(C), pages 116-126.
    2. Theo, Wai Lip & Lim, Jeng Shiun & Ho, Wai Shin & Hashim, Haslenda & Lee, Chew Tin & Muis, Zarina Abdul, 2017. "Optimisation of oil palm biomass and palm oil mill effluent (POME) utilisation pathway for palm oil mill cluster with consideration of BioCNG distribution network," Energy, Elsevier, vol. 121(C), pages 865-883.
    3. Lam, Hon Loong & Ng, Wendy P.Q. & Ng, Rex T.L. & Ng, Ern Huay & Aziz, Mustafa K. Abdul & Ng, Denny K.S., 2013. "Green strategy for sustainable waste-to-energy supply chain," Energy, Elsevier, vol. 57(C), pages 4-16.
    4. Foo, Dominic C.Y. & Tan, Raymond R. & Lam, Hon Loong & Abdul Aziz, Mustafa Kamal & Klemeš, Jiří Jaromír, 2013. "Robust models for the synthesis of flexible palm oil-based regional bioenergy supply chain," Energy, Elsevier, vol. 55(C), pages 68-73.
    5. Mesfun, Sennai & Leduc, Sylvain & Patrizio, Piera & Wetterlund, Elisabeth & Mendoza-Ponce, Alma & Lammens, Tijs & Staritsky, Igor & Elbersen, Berien & Lundgren, Joakim & Kraxner, Florian, 2018. "Spatio-temporal assessment of integrating intermittent electricity in the EU and Western Balkans power sector under ambitious CO2 emission policies," Energy, Elsevier, vol. 164(C), pages 676-693.
    6. Khatiwada, Dilip & Leduc, Sylvain & Silveira, Semida & McCallum, Ian, 2016. "Optimizing ethanol and bioelectricity production in sugarcane biorefineries in Brazil," Renewable Energy, Elsevier, vol. 85(C), pages 371-386.
    7. Pettersson, Karin & Wetterlund, Elisabeth & Athanassiadis, Dimitris & Lundmark, Robert & Ehn, Christian & Lundgren, Joakim & Berglin, Niklas, 2015. "Integration of next-generation biofuel production in the Swedish forest industry – A geographically explicit approach," Applied Energy, Elsevier, vol. 154(C), pages 317-332.
    8. Natarajan, Karthikeyan & Leduc, Sylvain & Pelkonen, Paavo & Tomppo, Erkki & Dotzauer, Erik, 2014. "Optimal locations for second generation Fischer Tropsch biodiesel production in Finland," Renewable Energy, Elsevier, vol. 62(C), pages 319-330.
    9. Harahap, Fumi & Silveira, Semida & Khatiwada, Dilip, 2019. "Cost competitiveness of palm oil biodiesel production in Indonesia," Energy, Elsevier, vol. 170(C), pages 62-72.
    10. Sher, Farooq & Pans, Miguel A. & Afilaka, Daniel T. & Sun, Chenggong & Liu, Hao, 2017. "Experimental investigation of woody and non-woody biomass combustion in a bubbling fluidised bed combustor focusing on gaseous emissions and temperature profiles," Energy, Elsevier, vol. 141(C), pages 2069-2080.
    11. Patrizio, P. & Leduc, S. & Chinese, D. & Dotzauer, E. & Kraxner, F., 2015. "Biomethane as transport fuel – A comparison with other biogas utilization pathways in northern Italy," Applied Energy, Elsevier, vol. 157(C), pages 25-34.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Suckling, Ian D. & de Miguel Mercader, Ferran & Monge, Juan J. & Wakelin, Steve J. & Hall, Peter W. & Bennett, Paul J. & Höck, Barbara & Samsatli, Nouri J. & Samsatli, Sheila & Fahmy, Muthasim, 2022. "Best options for large-scale production of liquid biofuels by value chain modelling: A New Zealand case study," Applied Energy, Elsevier, vol. 323(C).
    2. Harahap, Fumi & Leduc, Sylvain & Mesfun, Sennai & Khatiwada, Dilip & Kraxner, Florian & Silveira, Semida, 2020. "Meeting the bioenergy targets from palm oil based biorefineries: An optimal configuration in Indonesia," Applied Energy, Elsevier, vol. 278(C).
    3. Tan, Yue Dian & Lim, Jeng Shiun & Andiappan, Viknesh & Wan Alwi, Sharifah Rafidah, 2022. "Systematic optimisation framework for a sustainable multi-owner palm oil-based complex," Energy, Elsevier, vol. 261(PA).
    4. Andrea Lazzaretto & Andrea Toffolo, 2019. "Optimum Choice of Energy System Configuration and Storages for a Proper Match between Energy Conversion and Demands," Energies, MDPI, vol. 12(20), pages 1-6, October.
    5. Olli-Jussi Korpinen & Mika Aalto & Raghu KC & Timo Tokola & Tapio Ranta, 2023. "Utilisation of Spatial Data in Energy Biomass Supply Chain Research—A Review," Energies, MDPI, vol. 16(2), pages 1-23, January.
    6. Lo, Shirleen Lee Yuen & How, Bing Shen & Leong, Wei Dong & Teng, Sin Yong & Rhamdhani, Muhammad Akbar & Sunarso, Jaka, 2021. "Techno-economic analysis for biomass supply chain: A state-of-the-art review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    7. Zailan, Roziah & Lim, Jeng Shiun & Manan, Zainuddin Abdul & Alwi, Sharifah Rafidah Wan & Mohammadi-ivatloo, Behnam & Jamaluddin, Khairulnadzmi, 2021. "Malaysia scenario of biomass supply chain-cogeneration system and optimization modeling development: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    8. Jaka Isgiyarta & Bambang Sudarmanta & Jalu Aji Prakoso & Eka Nur Jannah & Arif Rahman Saleh, 2022. "Micro-Grid Oil Palm Plantation Waste Gasification Power Plant in Indonesia: Techno-Economic and Socio-Environmental Analysis," Energies, MDPI, vol. 15(5), pages 1-23, February.
    9. Mohd Idris, Muhammad Nurariffudin & Hashim, Haslenda & Leduc, Sylvain & Yowargana, Ping & Kraxner, Florian & Woon, Kok Sin, 2021. "Deploying bioenergy for decarbonizing Malaysian energy sectors and alleviating renewable energy poverty," Energy, Elsevier, vol. 232(C).
    10. Hoo Poh Ying & Cassendra Bong Phun Chien & Fan Yee Van, 2020. "Operational Management Implemented in Biofuel Upstream Supply Chain and Downstream International Trading: Current Issues in Southeast Asia," Energies, MDPI, vol. 13(7), pages 1-26, April.
    11. Jian Wong, Khai & Keat Ooi, Jun & Sin Woon, Kok & Ren Mong, Guo & Shadman, Saleh & Lam Ng, Wai, 2022. "A country-level Pareto-optimal palm waste utilisation network for economic and environmental sustainability," Energy, Elsevier, vol. 260(C).
    12. Marcelo Elias & Lara Bartocci Liboni & Luciana O. Cezarino & Flavio Pinheiro Martins & Márcio Lopes Pimenta & Per Hilletofth & Olli-Pekka Hilmola, 2022. "Shedding Light on the Brazilian Amazon Biotrade: A Study on Sustainable Development in Native Communities," Sustainability, MDPI, vol. 14(19), pages 1-18, October.
    13. Handaya & Marimin & Dikky Indrawan & Herri Susanto, 2022. "A Comparative Life Cycle Assessment of Palm Kernel Shell in Ceramic Tile Production: Managerial Implications for Renewable Energy Usage," Sustainability, MDPI, vol. 14(16), pages 1-15, August.
    14. Sani, L. & Khatiwada, D. & Harahap, F. & Silveira, S., 2021. "Decarbonization pathways for the power sector in Sumatra, Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harahap, Fumi & Leduc, Sylvain & Mesfun, Sennai & Khatiwada, Dilip & Kraxner, Florian & Silveira, Semida, 2020. "Meeting the bioenergy targets from palm oil based biorefineries: An optimal configuration in Indonesia," Applied Energy, Elsevier, vol. 278(C).
    2. Mohd Idris, Muhammad Nurariffudin & Leduc, Sylvain & Yowargana, Ping & Hashim, Haslenda & Kraxner, Florian, 2021. "Spatio-temporal assessment of the impact of intensive palm oil-based bioenergy deployment on cross-sectoral energy decarbonization," Applied Energy, Elsevier, vol. 285(C).
    3. Cambero, Claudia & Sowlati, Taraneh, 2014. "Assessment and optimization of forest biomass supply chains from economic, social and environmental perspectives – A review of literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 36(C), pages 62-73.
    4. de Jong, Sierk & Hoefnagels, Ric & Wetterlund, Elisabeth & Pettersson, Karin & Faaij, André & Junginger, Martin, 2017. "Cost optimization of biofuel production – The impact of scale, integration, transport and supply chain configurations," Applied Energy, Elsevier, vol. 195(C), pages 1055-1070.
    5. Lee, Ming Kwee & Hashim, Haslenda & Lim, Jeng Shiun & Taib, Mohd Rozainee, 2019. "Spatial planning and optimisation for virtual distribution of BioCNG derived from palm oil mill effluent to meet industrial energy demand," Renewable Energy, Elsevier, vol. 141(C), pages 526-540.
    6. Islam Hassanin & Matjaz Knez, 2022. "Managing Supply Chain Activities in the Field of Energy Production Focusing on Renewables," Sustainability, MDPI, vol. 14(12), pages 1-33, June.
    7. Mohd Idris, Muhammad Nurariffudin & Hashim, Haslenda & Leduc, Sylvain & Yowargana, Ping & Kraxner, Florian & Woon, Kok Sin, 2021. "Deploying bioenergy for decarbonizing Malaysian energy sectors and alleviating renewable energy poverty," Energy, Elsevier, vol. 232(C).
    8. Lo, Shirleen Lee Yuen & How, Bing Shen & Leong, Wei Dong & Teng, Sin Yong & Rhamdhani, Muhammad Akbar & Sunarso, Jaka, 2021. "Techno-economic analysis for biomass supply chain: A state-of-the-art review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    9. Suckling, Ian D. & de Miguel Mercader, Ferran & Monge, Juan J. & Wakelin, Steve J. & Hall, Peter W. & Bennett, Paul J. & Höck, Barbara & Samsatli, Nouri J. & Samsatli, Sheila & Fahmy, Muthasim, 2022. "Best options for large-scale production of liquid biofuels by value chain modelling: A New Zealand case study," Applied Energy, Elsevier, vol. 323(C).
    10. Patrizio, P. & Leduc, S. & Chinese, D. & Dotzauer, E. & Kraxner, F., 2015. "Biomethane as transport fuel – A comparison with other biogas utilization pathways in northern Italy," Applied Energy, Elsevier, vol. 157(C), pages 25-34.
    11. Magdalena Fallde & Johan Torén & Elisabeth Wetterlund, 2017. "Energy System Models as a Means of Visualising Barriers and Drivers of Forest-Based Biofuels: An Interview Study of Developers and Potential Users," Sustainability, MDPI, vol. 9(10), pages 1-19, October.
    12. Sarker, Bhaba R. & Wu, Bingqing & Paudel, Krishna P., 2019. "Modeling and optimization of a supply chain of renewable biomass and biogas: Processing plant location," Applied Energy, Elsevier, vol. 239(C), pages 343-355.
    13. Moktadir, Md Abdul & Ali, Syed Mithun & Jabbour, Charbel Jose Chiappetta & Paul, Ananna & Ahmed, Sobur & Sultana, Razia & Rahman, Towfique, 2019. "Key factors for energy-efficient supply chains: Implications for energy policy in emerging economies," Energy, Elsevier, vol. 189(C).
    14. Patrizio, P. & Chinese, D., 2016. "The impact of regional factors and new bio-methane incentive schemes on the structure, profitability and CO2 balance of biogas plants in Italy," Renewable Energy, Elsevier, vol. 99(C), pages 573-583.
    15. Tan, Yue Dian & Lim, Jeng Shiun & Wan Alwi, Sharifah Rafidah, 2020. "Multi-objective optimal design for integrated palm oil mill complex with consideration of effluent elimination," Energy, Elsevier, vol. 202(C).
    16. Harahap, Fumi & Silveira, Semida & Khatiwada, Dilip, 2019. "Cost competitiveness of palm oil biodiesel production in Indonesia," Energy, Elsevier, vol. 170(C), pages 62-72.
    17. Patrizio, P. & Leduc, S. & Chinese, D. & Kraxner, F., 2017. "Internalizing the external costs of biogas supply chains in the Italian energy sector," Energy, Elsevier, vol. 125(C), pages 85-96.
    18. Ba, Birome Holo & Prins, Christian & Prodhon, Caroline, 2016. "Models for optimization and performance evaluation of biomass supply chains: An Operations Research perspective," Renewable Energy, Elsevier, vol. 87(P2), pages 977-989.
    19. Liu, Liwei & Ye, Junhong & Zhao, Yufei & Zhao, Erdong, 2015. "The plight of the biomass power generation industry in China – A supply chain risk perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 680-692.
    20. Kargbo, Hannah & Harris, Jonathan Stuart & Phan, Anh N., 2021. "“Drop-in” fuel production from biomass: Critical review on techno-economic feasibility and sustainability," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:12:y:2019:i:3:p:420-:d:201638. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.