Optimal Design for Biodiesel Supply Chain: Case Study

  • Fitriani Tupa R Silalahi Bandung Institute of Technology, School of Business and Management, Bandung, Indonesia; Del Institute of Technology, Faculty of Engineering Management, Laguboti, Indonesia;
  • Togar M. Simatupang Bandung Institute of Technology, School of Business and Management, Bandung, Indonesia
  • Manahan Siallagan Bandung Institute of Technology, School of Business and Management, Bandung, Indonesia
Keywords: Biodiesel, Palm oil, Optimization, Supply chain, Indonesia, Delivery point, Facility location

Abstract

One renewable energy form currently being promoted is that of biodiesel as a substitute for diesel fuel. This involves mixing biodiesel with petrodiesel in proportions governed by the respective regulations of each country. The purposes of this research are to support the exploiting of biodiesel forms of renewable energy and to optimize the palm oil-sourced biodiesel supply chain by conducting an Indonesia-based case study. The optimization process was implemented in accordance with the government's mandate and long-term planning. There are two decision variables to consider. First, the model will identify the optimum delivery point locations as a blending terminal between biodiesel and petrodiesel (petroleum diesel). Second, it will determine the location of biodiesel plants’ construction in order to satisfy the government's mandate. The results show that, while determining delivery point locations affects supply chain costs, it does not do so significantly. More influential is determining the construction locations of biodiesel plants and this study provides a model for deciding the delivery points and locations of biodiesel plants in order to minimize biodiesel supply chain costs in Indonesia. This study presents in detail biodiesel supply chain process in Indonesia and based on the literature, no research was found on studying optimization biodiesel supply chain in Indonesia.

 

Downloads

Download data is not yet available.

Author Biographies

Fitriani Tupa R Silalahi, Bandung Institute of Technology, School of Business and Management, Bandung, Indonesia; Del Institute of Technology, Faculty of Engineering Management, Laguboti, Indonesia;

Fitriani Tupa R. Silalahi is a PhD candidate within the Doctoral Science in Management Program at the School of Business and Management, Bandung Institute of Technology, Indonesia. Her research focuses on optimization, modeling, and simulation. Her latest research is on biodiesel policy and biodiesel supply chain optimization from palm oil in Indonesia.

Togar M. Simatupang, Bandung Institute of Technology, School of Business and Management, Bandung, Indonesia

Togar M. Simatupang is a Professor of Operations and Supply Chain Management at Bandung Institute of Technology, Indonesia. He holds a PhD degree from Massey University in New Zealand. He is well known as an expert in supply chain management and creative industry development. His other research focuses on developing and managing collaborative relationships, such as how to design and manage supply chain collaboration, how to equalize their risks and rewards, and how to share the benefits of collaboration.

Manahan Siallagan, Bandung Institute of Technology, School of Business and Management, Bandung, Indonesia

Manahan Siallagan is an assistant professor of decision making and strategic negotiation interest group in Bandung Institute of Technology. He holds a Doctoral degree in Computational Intelligence and System Science from Tokyo Institute of Technology, Japan. Currently he is Director of Big Data Analysis and Social Simulation Laboratory at the School of Business and Management. His research focuses on decision making, simulation, and modeling.

References

REN21, Renewables 2020 Global Status Report. 2020.

Abokyi, E., P. Appiah-Konadu, and F. Abokyi, Industrial growth and emissions of CO2 in Ghana: The role of financial development and fossil fuel consumption. Energy Reports, 2019. 5: p. 1339-1353.

Leduc, S., et al., Location of a biomass based methanol production plant: A dynamic problem in northern Sweden. Applied Energy, 2010. 87(1): p. 68-75.

Lane, J. The Digest’s Biofuels Mandates Around the World 2020. 2020 [cited 2020; July 16]. Available from: https://www.biofuelsdigest.com/bdigest/2019/12/31/the-digests-biofuels-mandates-around-the-world-2020/.

MEMR. Regulation of the Minister of Energy and Mineral Resources Indonesia About Certain Sector Industry Mandatory to Use Biodiesel and Bioethanol as a Fuel Mixture With Certain Mixtures from 2015 to 2025. 2015.

Andersen, F., et al., Optimal design and planning of biodiesel supply chain with land competition. Computers & Chemical Engineering, 2012. 47: p. 170-182.

Santibañez-Aguilar, J.E., et al., Optimal planning and site selection for distributed multiproduct biorefineries involving economic, environmental and social objectives. Journal of Cleaner Production, 2014. 65: p. 270-294.

Rincón, L.E., et al., Optimization of the Colombian biodiesel supply chain from oil palm crop based on techno-economical and environmental criteria. Energy Economics, 2015. 47: p. 154-167.

Babazadeh, R., Optimal design and planning of biodiesel supply chain considering non-edible feedstock. Renewable & Sustainable Energy Reviews, 2017. 75: p. 1089-1100.

Ezzati, F., R. Babazadeh, and A. Donyavi, Optimization of multimodal, multi-period and complex biodiesel supply chain systems: Case study. Renewable Energy Focus, 2018. 26: p. 81-92.

Jeong, H., H.L. Sieverding, and J.J. Stone, Biodiesel Supply Chain Optimization Modeled with Geographical Information System (GIS) and Mixed-Integer Linear Programming (MILP) for the Northern Great Plains Region. Bioenergy Research, 2018.

Natarajan, K., et al., Optimal locations for second generation Fischer Tropsch biodiesel production in Finland. Renewable Energy, 2014. 62: p. 319-330.

Ivanov, B. and S. Stoyanov, A mathematical model formulation for the design of an integrated biodiesel-petroleum diesel blends system. Energy, 2016. 99: p. 221-236.

Woittiez, L.S., et al., Yield gaps in oil palm: A quantitative review of contributing factors. European Journal of Agronomy, 2017. 83: p. 57-77.

MoA, Tree Crop Estate Statistics of Indonesia 2018 - 2020 : Palm Oil. 2020, Directorate General of Estates Ministry of Agriculture: Jakarta.

Silalahi, F.T.R., T.M. Simatupang, and M.P. Siallagan, Biodiesel produced from palm oil in Indonesia: Current status and opportunities. AIMS Energy, 2019. 8(1): p. 81-101.

CNN. Penghematan Devisa dari Program B20 Baru 56,9 Persen 2019 [cited 2020 July 15]; Available from: https://www.cnnindonesia.com/ekonomi/20191127152450-85-451998/penghematan-devisa-dari-program-b20-baru-569-persen.

BPS, Statistical Yearbook of Indonesia 2019 2019, BPS Indonesia: Jakarta.

detik.com. Distribusi BBM Indonesia Paling Rumit di Dunia 2020 [cited 2020 July 15]; Available from: https://finance.detik.com/energi/d-2555694/distribusi-bbm-indonesia-paling-rumit-di-dunia.

Kencana, M.R. Tantangan Penerapan B20 Ada di Tingkatan Operasional (The Challenge of B20 Implementation is in the Operational Level). 2018 [cited 2020 June 26]; Available from: https://www.liputan6.com/bisnis/read/3653654/tantangan-penerapan-b20-ada-di-tingkatan-operasional.

Arifin, R., RI Wants to reach B50, Car Manufacturers Say. 2019, detik.com.

USDA, Indonesia Biofuels Report 2019. 2019: Jakarta.

MIGAS, B., Laporan Kinerja BPH Migas Tahun 2016 ( BPH Migas Performance Report Year 2016). 2016, BPH MIGAS: Jakarta.

MEMR. Pengadaan Bahan Bakar Nabati Jenis Biodiesel Untuk Pencampuran Jenis Bahan Bakar Minyak Periode Januari - Desember 2019. 2018; Available from: https://drive.esdm.go.id//wl/?id=PYm0lUq1vD2OCtsPw5wj4XiZSRJD1GaP.

Indonesia, C. Kementerian ESDM Taksir Kebutuhan Biodiesel 2020 9,6 Juta KL (The Ministry of Energy and Mineral Resources Estimates 2020 Biodiesel Needs of 9.6 Million KL). 2019 [cited 2020 September 16]; Available from: https://www.cnnindonesia.com/ekonomi/20191007182343-85-437535/kementerian-esdm-taksir-kebutuhan-biodiesel-2020-96-juta-kl.

Pertamina. Usaha Hilir Pertamina (Pertamina Downstream). 2020 [cited 2020 July, 13]; Available from: https://www.pertamina.com/id/downstream.

Harahap, F., S. Silveira, and D. Khatiwada, Cost competitiveness of palm oil biodiesel production in Indonesia. Energy, 2019. 170: p. 62-72.

Statistik, B.P., Hasil olah cepat penduduk Indonesia menurut provinsi, kabupaten/kota, dan kecamatan sensus penduduk 2010. 2010: Badan Pusat Statistik (BPS).

Satrianegara, R. Biaya Produksi Minyak Pertamina Masih Tinggi (Pertamina's oil production costs are still high). 2018; Available from: https://www.cnbcindonesia.com/news/20180226170320-4-5501/biaya-produksi-minyak-pertamina-masih-tinggi.

Nossar, R. Kapasitas terminal BBM Tuban ditambah (Tuban BBM terminal capacity is increased). 2014 [cited 2020 June 25]; Available from: https://industri.kontan.co.id/news/kapasitas-terminal-bbm-tuban-ditambah.

MEMR, Perubahan Ketiga Atas Peraturan Menteri Energi dan Sumber Daya Mineral Nomor 32 Tahun 2008 Tentang Penyediaan, Pemanfaatan dan Tata Niaga Bahan Bakar Nabati (Biofuel) Sebagai Bahan Bakar Lain, MEMR, Editor. 2015, MEMR: Jakarta.

MEMR. Keputusan Menteri Energi dan Sumber Daya Mineral Republik Indonesia Nomor 91 K/12/DJE/2019. 2019.

Mahmudah, N., et al. Study of Regional Transportation for CPO in Central Kalimantan. in Proceedings of the 15th International Symposium FSTPT. 2012.

Khatiwada, D., et al., Optimizing ethanol and bioelectricity production in sugarcane biorefineries in Brazil. Renewable Energy, 2016. 85: p. 371-386.

Peters, M.S., et al., Plant design and economics for chemical engineers. Vol. 4. 1968: McGraw-Hill New York.

Ong, H.C., et al., Life cycle cost and sensitivity analysis of palm biodiesel production. Fuel, 2012. 98: p. 131-139.

EBTKE. Pemerintah Tegaskan Komitmen Pelaksanaan Program Mandatori B30. 2019 [cited 2020 July, 13]; Available from: http://ebtke.esdm.go.id/post/2019/11/04/2386/pemerintah.tegaskan.komitmen.pelaksanaan.program.mandatori.b30.

Published
2021-02-15
Section
Articles