Analysis of Production and Consumption of Palm-Oil Based Biofuel using System Dynamics Model : Case of Indonesia
DOI:
https://doi.org//10.32628/IJSRSET1962149Keywords:
Crude Palm Oil, Biodiesel, Mandatory Policy, System DynamicsAbstract
Indonesia biodiesel blending mandate emerged in 2006 driven by strengthening energy security while in parallel reducing and toning down the need for fossil fuels, strengthen the country's balance of payments and increasing environmental demand to reduce CO2 emission while leveraging the abundance of Crude Palm Oil as raw material. The purposes of this study were to analyze production and consumption of palm Oil-based biofuel. System dynamics model was developed based on 4 stages, Palm Oil Plantation, CPO Production, Palm Oil-based biofuel production and consumption and the validation of the model through Mean Absolute Percentage Error (MAPE) test confirms the correspondence between structures and phenomena. Baseline simulation analysis shows that there is no single strategy capable of improving the production and consumption of palm-based Palm Oil-based biofuel. We suggest that combined strategies such as government support hand in hand with industrial conversion efficiency, increase in palm oil on-farm productivity, 5% reduction in CPO export, Increase biodiesel production capacity and generally biodiesel utilization target cannot be achieved without the support from the government in form of subsidy which require additional IDR 409 a 15% increase in subsidy.
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