INSISTS Sustainable Bioenergy Development in Indonesia

Bioenergy is an important part of Indonesia’s energy agenda. A main preoccupation is to combine local resource potential

with competitive technological options to provide modern and reliable energy services. This shall help improve the

country’s energy balance, and enhance energy security. Swedish experiences and expertise in bioenergy can provide

support and insights that are most valuable to the country. The program INSISTS (Indonesian-Swedish Initiative for

Sustainable Energy Solutions) establishes a platform to support cooperation in this field.

About INSISTS Bioenergy project

The project will define strategies for deployment of sustainable

bioenergy in Indonesia. Indonesia has large biomass potential and

policies are being defined to deal with energy and climate

challenges. Opportunities exist to build synergies with various

sectors of the economy, thus promoting sustainable production

while also creating jobs and income. Strategic choices, public

policy, and coordinated action among stakeholders at local and

national levels shall be defined based on biomass resources and

commercial technologies available, using multiple criteria to

determine an enhanced role for bioenergy. Ultimately, bioenergy

shall contribute to improved energy security, energy balance in the

economy, and welfare. Attention shall be given to guarantee food

security and welfare distribution.

The project will result in a multi-step strategy and implementation

plan towards a competitive bioenergy production in Indonesia. The

idea is to build upon existing structures to define entry points for

expansion. In a second step, the strategy will evolve towards the

use of low-value feedstocks in the form of various agricultural

wastes using second generation technologies. The strategy will

incorporate all drivers of technological innovation, viz. policy and

regulatory, environmental, technological, socio-economic, and

institutional, thus being placed in a broader context of bioenergy

development nationally and internationally. The project takes

advantage of experiences from other countries that have

succeeded in the modernization of bioenergy, particularly Sweden.

Project team

Prof. Semida Silveira, Project leader KTH

Dr. Siti Syamsiah, Project leader UGM

Dr. Dilip Khatiwada, KTH

Carl Palmén, KTH

Fumi Harahap, KTH

Dr. Francis Johnson, SEI

Dr. Takeshi Takama, SEI

Eko Suyono, UGM

Cahyo Wulandari, UGM

Dr. Ahmad T. Yuliansyah, UGM

KTH ROYAL INSTITUTE OF TECHNOLOGY

Conditions for a sustainable development of

palm-oil-based biodiesel in IndonesiaFumi Harahap, Carl Palmén, Semida Silveira, Dilip Khatiwada

Division of Energy and Climate Studies, KTH Royal Institute of Technology, Sweden

Number one palm oil producer in the world

CPO production in 2014: 33 Million tonne; 10.5 million hectare of planted area

Average yield of CPO: 3.8 tonne per ha (Malaysia: 4.4 tonne per ha)

70% of CPO exported; 30% used in Indonesia (9% for biodiesel, 21% for food

and other industrial uses)

How Important Palm-Oil-Based Biodiesel for Indonesia?

Securing Sustainable Feedstock

Energy and Climate Studies Unit

Dept. of Energy Technology

School of Industrial Engineering

and Management (ITM)

The division of Energy and

Climate Studies (ECS) has an

interdisciplinary character with a

strong systems approach, linking

issues related to energy

technology and policy, climate

change and sustainable

development.

At present, ECS works with five

defined research themes:

Bioenergy systems

Energy for sustainable

development

Energy systems efficiency

Urban sustainability

Energy ánd climate policy

www.ecs.kth.se

IN COOPERATION WITH:

Fumi Harahap

PhD Student

Brinellvägen 68,

SE-100 44 Stockholm,

Sweden

Tel: +46 8 790 7465

Email: harahap@kth.se

Crude Palm Oil (CPO) production (Million tonne/year) and

biodiesel production (billion liter/year)

Abundant feedstock production

Commitment to sustainable biofuel development

Biodiesel blending target of 30% by 2025 for transport, commercial and power

sectors to reduce dependence on oil imports

Emissions reductions’ target in relation to land use of oil palm plantation: 279

million tonne of CO2eq

Processing capacity of 5.6 billion liter/year

Producing 3.3 billion liter, 48% used in the country, the remaining was exported

6.7% of diesel fuel in transport sector does not meeting the set target

Indonesia biodiesel in numbers 2014

Policy goals

Policy instruments

Implementations

Biofuel

policy

Internal

Land

Agriculture

policy

Climate

policy

External

Internal evaluation =

allocation of land in

biofuel policy

External evaluation =

available land when

agriculture and climate

policies are also

considered

Coherence of Policy Goals

This research is part of the

program INSISTs (Indonesian

Swedish Initiative for Sustainable

Energy Solutions), a joint research

and innovation platform established

between Sweden and Indonesia.

Agriculture policy: Land is essential for crops plantation to ensure food security

targeting annual growth rate of 2-5% of agricultural crops production by 2019.

Climate policy: Land use change in forestry sector and peatland contributes to

reduce 23% GHG emissions from business as usual by 2020.

The role of land in delivering the policy goal:

How much land is required to meet increasing CPO demand from

domestic and export?

What is the role of land in biofuel, agriculture and climate policies?

Biofuel policy: Land is needed for production of biodiesel feedstock to achieve

biodiesel blending rate of 30% by 2025 in various sectors of the economy for energy

security.

CPO Demand:

Domestic plus export

Palm Oil Milling

Industrial uses

(4.2 million tonne)

Biodiesel Production

(3 million tonne)

Oil Palm Plantation

(10.5 Mha)

Crude Palm Oil (CPO)

(33 million tonne)

Domestic Use

(10 million tonne*)Export

(23 million tonne)

Food use

(5.5 million tonne)

Other Industrial uses

(1.2 million tonne)

Food Industrial use

Domestic use

(1.6 billion liter)

Export

(1.7 billion liter)

Figures from 2014, Source: USDA 2015

*Waste 0.3 million tonne

National and international demand for Indonesian CPO in 2014

How much land is available for future palm-biodiesel feedstock

production when considering biofuel, agriculture and climate policies?

There are incoherences related to land classifications and concepts used in different

policies. According to biofuel policy, 29 Mha are available for oil palm expansion. If

agriculture and climate policies are considered, only 20 Mha are actually available.

Future CPO demand for domestic use and export. Assuming annual increase of

domestic food use (+1.1%) other domestic industrial uses (+5.7%) and export (+1.6%)

6

8

10

12

14

16

18

2015 2020 2025

Oil

Palm

Pla

nta

tio

ns (

Mh

a)

No Yield Improvement (3.8 tonne/ha)

Medium Yield Improvement (3.8-4.4 tonne/ha)

High Yield Improvement (4-6 tonne/ha)

2014 Area

17

Mha

14

Mha

11

Mha

Understanding on how the government priorities the policy goals on land allocation is a

prerequisite for deploying the result of the policy coherence analysis to identify the area

available for palm biodiesel feedstock production.

1.01

2.33

0.32

0.83 1.02

0.05

0.08

Enough land is available for future CPO production without threatening food security,

deforestation and climate change. Improved yield allows further expansion of both

domestic and export markets with more efficient use of land.

Total

Indonesia

land area:

187

Mha

20

Mha

Conservation

forest

10

Mha

10

Mha

KTH ROYAL INSTITUTE OF TECHNOLOGY

Research Questions

How can we meet mandatory bioethanol

blending targets in Indonesia?

Dilip Khatiwada, Semida Silveira

Division of Energy and Climate Studies, KTH Royal Institute of Technology, Sweden

• What is the potential of bioethanol production in the current

production practices in Indonesia?

• How much bioethanol blends can be achieved without

compromising food-security?

• How can we realize the bioethanol blend mandates and

could we go beyond the target?

• Indonesia has long tradition of sugar production but has

gone from exporter to importer

• Indonesia is an oil producer but went from exporter to

importer in 2004

• Sugarcane is a main feedstock for sugar and ethanol.

Combination of sugar and ethanol production has proved

successful e.g. in Brazil

• Sugar production for self-sufficiency and ethanol for meeting mandatory bioethanol blending targets can be met using land

that is suitable for sugarcane within the time frame of 2015-2025.

• To meet both sugar self-sufficiency and bioethanol blending targets, 1.6 Mha land are required by 2020.

• To meet the 20% bioethanol mandate after sugar self-sufficiency, 2.76 Mha land are needed by 2025.

• Sugar and bioethanol programs should be tied together through integrated policies for sustainable expansion of sugarcane

crops, modernization of sugar mills, and investments in biorefineries and blending infrastructure.

Energy and Climate Studies Unit

Department of Energy Technology

School of Industrial Engineering

and Management (ITM)

The division of Energy and

Climate Studies (ECS) has an

interdisciplinary character with a

strong systems approach, linking

issues related to energy

technology and policy, climate

change and sustainable

development.

At present, ECS works with five

defined research themes:

Bioenergy systems

Energy for sustainable

development

Energy systems efficiency

Urban sustainability

Energy ánd climate policy

www.ecs.kth.se

Stakeholder consultations at sugarcane research

institute in Indonesia

Sugarcane processing in Indonesia

α’ is the proportion of total sugarcane juice (X) used for sugar production.

Dotted lines represent expanded land use and improved utilization of bioresources

• Present production of sugarcane from 0.47 Mha is not

enough to meet sugar and bioethanol targets.

• 1.07 Mha sugarcane field is needed to meet sugar demand

by 2020. In this case only one fourth of the bioethanol

volume target can be met using molasses (case 1).

Case 1: Land required (Mha) for meeting sugar self-

sufficiency and producing ethanol from molasses only

Particulars2015

(2% blend)

2020

(10% blend)

2025

(20% blend)

Land required

(Mha)0.71 1.60 2.76

Molasses ethanol

(BL)0.68 1.02 1.09

Juice ethanol (BL) - 3.42 10.39

Total ethanol (BL) 0.68 4.45 11.48

Case 3: Transport liquid fuel projection and % of gasoline substitution

when sugarcane is produced from available land

Case 2: Land required for producing ethanol to meet sugar

demand and bioethanol blending targets

IN COOPERATION WITH:

This research is part of the

program INSISTs (Indonesian

Swedish Initiative for Sustainable

Energy Solutions), a joint research

and innovation platform established

between Sweden and Indonesia.

Targets: Sugar Self-sufficiency by 2020 and

20% Bioethanol Blending by 2025

Scenarios for Estimating Bioethanol Using

Sugarcane Feedstock

Estimating Bioethanol Potential and Required Land for Meeting Sugar and Ethanol Targets

Indonesia Can Meet Both Sugar Self-Sufficiency and Bioethanol Mandates

Dilip Khatiwada

Researcher

Brinellvägen 68,

SE-100 44 Stockholm,

Sweden

Tel: +46 8 790 7464

Email: dilipk@kth.se

• In order to meet the sugar demand and bioethanol

mandate by 2020 and 2025, 1.60 and 2.76 Mha

sugarcane land are required, respectively (case 2).

• 34% bioethanol blend by 2020 and 63% by 2025 can

be achieved using the total 5 Mha available land for

cultivation of sugarcane cultivation (case 3).

Energy and Climate Studies (ECS) Division

KTH, Royal Institute of Technology, Sweden

www.ecs.kth.se

About ECS division

Sustainable energy solutions encompass not only efficient and renewable technologies but also the establishment of policy,

institutional and market structures to foster the adoption of new technological alternatives and paths. Energy solutions need to

operate realistically and efficiently in the context of dynamic energy markets, stringent environmental and social requirements,

and limited resource availability. What solutions can be pursued globally and regionally, which will lead to sustainable

development? What are the solutions that will lead to mitigation and adaptation to climate change while also promoting

sustainable development? These are central research questions at ECS.

Research project at ECS

ECS projects range from research and scientific evidence to policy briefs and dialogues, finally culminating at design and

implementation of policy and/or project development. Our portfolio of projects includes research and actions over different

geographical areas. The research themes are: (i) Bioenergy Systems (ii) Energy for Sustainable Development (iii) Energy

Systems Efficiency (iv) Urban Sustainability (v) Energy and Climate Policy. The projects cover multiple dimensions including

socio-economic development, environmental goals, markets and institutional capacity, aiming at achieving impact in a

coordinate way. Each project usually covers at least two of our thematic areas and all of them involve policy dimensions. ECS

activities are characterized by: (i) sustainability principles (ii) systems approach (iii) interdisciplinary character (iv)

development oriented (v) institutional capacity (vi) alliances for impact.

Head of ECS

Professor Semida Silveira

KTH Royal Institute of Technology

School of Industrial Engineering and Management

Brinellvägen 68, SE-100 44 Stockholm, Sweden

Email: semida.silveira@kth.se

Synthesis of resource base and policy framework

Assessment of availability of land to accommodate future oil palm

production for meeting biodiesel blending target and other uses

• Land available for palm biodiesel feedstock based on analysis of the

coherence of policy goals (ongoing study)

• Securing sustainable feedstock to meet the biodiesel targets (ongoing

study)

Publications and ongoing studies in relation to INSISTS bioenergy project

Sustainability assessment in perspective

Analysing the sustainability of biofuel production in Indonesia by

performing Life Cycle Analysis (LCA) study

• Energy and GHG balances of ethanol production from cane

molasses in Indonesia (published in journal of Applied Energy, 2016)

• Life cycle analysis and water footprint of biodiesel production in

Indonesia (ongoing study)

Lessons from other countries

Exploring the transition towards modern bioenergy in some countries

using a socio-technical approach

• Navigating the transition to sustainable bioenergy in Sweden and

Brazil: Lessons learned in a European and International context

(published in journal of Energy Research & Social Science, 2016)

Definition of scenarios for chosen bioenergy segments

Investigating different scenarios for the production of bioethanol using

sugarcane feedstock in Indonesia for meeting the both sugar self-

sufficiency and mandatory bioethanol blending targets.

• Scenarios for bioethanol production in Indonesia: How can we meet

mandatory blending targets? (under review in journal of Energy)

For more information contact:

Fumi Harahap

KTH Royal Institute of Technology

School of Industrial Engineering and Management

Brinellvägen 68, SE-100 44 Stockholm, Sweden

Email: harahap@kth.se

Phone: +46 8 790 7465