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Exploring synergies between the palm oil industry and bioenergy production in Indonesia

Time: Fri 2020-04-24 10.00

Location: (English)

Subject area: Energy Technology

Doctoral student: Fumi Harahap , Energiteknik, Energy Systems

Opponent: Professor José Roberto Moreira, University of Sao Paolo, Brasilien

Supervisor: Prof Semida Silveira, Energiteknik; PhD Dilip Khatiwada, Energiteknik

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Climate change along with increasing demand for food and fuel call for sustainable use of natural resources. One way to address these concerns is through efficient use of resources, which is also vital for the achievement of the Sustainable Development Goals and the Paris Agreement. In this context, the sustainable and efficient use of resources in the palm oil industry is an interesting case to scrutinise. This is particularly important for Indonesia, the leading palm oil producer in the world. Large quantities of oils and biomass are generated from oil palm plantations and processing, presenting the potential for the development of bio-based production systems. However, at present, sustainability is a matter of great concern in this industry, including land use issues and the fact that large portions of the residues generated are untreated, releasing greenhouse gas emissions, and imposing environmental threats.

This doctoral thesis aims at exploring how resource efficiency can be enhanced in the palm oil industry. Three research questions are posed to address the objective. The first question examines the sectoral policy goals of biofuel, agriculture, climate, and forestry and their requirements for land. The second question is focused on new industrial configurations for efficient use of palm oil biomass for bioenergy production. The final question summarises the role of enhancing resource efficiency in the palm oil industry with regards to meeting the national bioenergy targets, which include 5.5 GWe installed capacity and biofuel blending with fossil fuels (30% biodiesel blending with diesel and 20% ethanol blending with gasoline) in the transport, industry, and power sectors. The research questions are explored using three main methods: policy coherence analysis, techno-economic analysis, and a spatio-temporal optimisation model (BeWhere Indonesia).

The thesis identifies areas in which policy formulation, in terms of sectoral land allocation, can be improved. Adjustments and improvements in policy formulation and implementation are crucial for land allocation. The inconsistencies in the use of recognised land classifications in the policy documents, the unclear definition of specific land categories, and the multiple allocation of areas, should be addressed immediately to ensure coherent sectoral policies on land allocation. This can lead to more effective policy implementation, reduce pressure on land, enhance synergies, and resolve conflicts between policy goals.

The transition towards a more sustainable palm oil industry requires a shift from current traditional practices. Such transition involves efficient use of palm oil biomass resources through improved biomass conversion technologies and integration of palm oil mills with energy production in biorefinery systems. The upgrading of the conventional production systems can serve multiple purposes including clean energy access and production of clean fuels for the transport, industry, and power sectors, ultimately helping the country meet its renewable energy and sustainable development targets, along with reduced emissions. More specifically, the efficient use of biomass and co-production of bioenergy carriers in biorefineries can enable Indonesia to reach its targets for bioenergy installed capacity and bio-based blending.

At present, many government policies in Indonesia are working in the right direction. Nevertheless, various barriers still need to be overcome so that resource efficiency can be improved. This includes harnessing the full potential of bioenergy in the palm oil industry. There is room for enhancing the sustainability of the palm oil industry in Indonesia with adjustments to existing policies and practices, as shown in this thesis. First, guidance across sectoral policies can help to coordinate the use of basic resources. Second, the shift from traditional practices requires a strategy that includes improvement in agricultural practices (i.e., higher yields), infrastructure for biomass conversion technologies together with improved grid connectivity, and adoption of a biorefinery system. Strengthening policy support is needed to promote such a comprehensive shift. Third, various programmes can forge partnerships between oil palm plantations, the palm oil mills, and energy producers to ensure the development of sustainable industrial practices. A sustainable palm oil industry will improve resource and cost efficiency, and help open international markets for Indonesian products. This could pave the way for an enhanced role for the Indonesian palm oil industry in global sustainability efforts.