Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia
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 h...
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doaj-8f36880239ba472c83c1593dbb02fc152020-11-24T21:46:41ZengMDPI AGEnergies1996-10732019-01-0112342010.3390/en12030420en12030420Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, IndonesiaFumi Harahap0Sylvain Leduc1Sennai Mesfun2Dilip Khatiwada3Florian Kraxner4Semida Silveira5Energy and Climate Studies Unit, Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, SwedenInternational Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, AustriaInternational Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, AustriaEnergy and Climate Studies Unit, Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, SwedenInternational Institute for Applied Systems Analysis (IIASA), A-2361 Laxenburg, AustriaEnergy and Climate Studies Unit, Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, SwedenSignificant 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<sub>2</sub>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.https://www.mdpi.com/1996-1073/12/3/420oil palmpalm oil millspalm oil residuesvalue-added productssupply chains optimizationspatial analysistechno-economic analysis |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Fumi Harahap Sylvain Leduc Sennai Mesfun Dilip Khatiwada Florian Kraxner Semida Silveira |
spellingShingle |
Fumi Harahap Sylvain Leduc Sennai Mesfun Dilip Khatiwada Florian Kraxner Semida Silveira Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia Energies oil palm palm oil mills palm oil residues value-added products supply chains optimization spatial analysis techno-economic analysis |
author_facet |
Fumi Harahap Sylvain Leduc Sennai Mesfun Dilip Khatiwada Florian Kraxner Semida Silveira |
author_sort |
Fumi Harahap |
title |
Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia |
title_short |
Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia |
title_full |
Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia |
title_fullStr |
Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia |
title_full_unstemmed |
Opportunities to Optimize the Palm Oil Supply Chain in Sumatra, Indonesia |
title_sort |
opportunities to optimize the palm oil supply chain in sumatra, indonesia |
publisher |
MDPI AG |
series |
Energies |
issn |
1996-1073 |
publishDate |
2019-01-01 |
description |
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<sub>2</sub>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. |
topic |
oil palm palm oil mills palm oil residues value-added products supply chains optimization spatial analysis techno-economic analysis |
url |
https://www.mdpi.com/1996-1073/12/3/420 |
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