Impact of the Introduction of Biofuel in the Transportation Sector in Indonesia
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).
When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:2:y:2010:i:6:p:1831-1848:d:8763. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.