Developing Biofuel-Based Road Transport Industry: Market Penetration Assessment of Biodiesel (B100) and Bioethanol (E100) as Road Transport Fuels in Indonesia

Table of Contents

• Disclaimer 2
• Acknowledgements 5
• List of Project Contributors 6
• Table of Contents 7
• List of Figures 8
• List of Abbreviations and Acronyms 13
• Executive Summary 15
• Chapter 1 20
• Introduction 20
• 1.1. Why Indonesia Needs Biofuels 20
• 1.2. A Brief History of Indonesia’s Biofuel Policy 21
• 1.3. Current National Policies 23
• 1.4. Objectives of the Study 26
• 1.5. Methodology 26
• 1.6. Working Plan 29
• Chapter 2 32
• State-of-the-Art of Biofuel Development: A Review of International Experiences 32
• 2.1. Brazil 32
• 2.1.1. Brazilian bioethanol programme – Proálcool 32
• 2.1.2. Bioethanol feedstocks 33
• 2.1.3. Replication of bioethanol production in other developing countries 34
• 2.2. The United States of America 35
• 2.3. The European Union (EU) 44
• 2.4. Thailand 50
• 2.4.1. Bioethanol 50
• 2.4.2. Biodiesel 52
• Chapter 3 56
• Existing Production Paths in Indonesia: 56
• Feedstock, Technologies, Standards, and Issues 56
• 3.1. Introduction 56
• 3.2. CPO-Based Biodiesel Production 59
• 3.2.1. Description 59
• 3.2.2. Production capacity, supply, and demand 61
• 3.2.3. Current fiscal instrument: biodiesel subsidy from biodiesel financing fund 65
• 3.3. First-Generation Bioethanol Production 67
• 3.3.1. Description 67
• Sugarcane-based bioethanol 67
• Cassava-based bioethanol 70
• 3.3.2. Potential development in Indonesia 73
• Sugarcane-based bioethanol 73
• Cassava-based bioethanol 74
• 3.4. Second-Generation Bioethanol Production 77
• 3.5. Production of Green Fuels from CPO Hydrogenation 80
• 3.5.1. Introduction 80
• 3.5.2. Hydro-processing 81
• 3.5.3. Production of green fuels 82
• Stand-alone hydro-processing of triglyceride 82
• Co-processing 86
• 3.5.4. The crucial role of hydrogen 88
• 3.5.5. Use of green fuels in the world 88
• Chapter 4 89
• Current Situation and Development 89
• 4.1. Gasoline and Bioethanol Supply and Demand 90
• 4.2. Diesel: Current Production Capacity, Supply, and Demand 95
• 4.3. Green Fuels: Production Capacity, Supply, and Demand16F 98
• 4.4. The Development Plan of Flexible-Fuelled Engine Vehicles 101
• 4.5. Implementation Issues of Euro IV Fuel Standards 103
• Chapter 5 105
• Development of the Biofuel Roadmap Framework 105
• 5.1. Objectives and Methodology 105
• 5.2. Assumptions and Policy Measures 108
• 5.2.1. Economic assumptions 108
• 5.2.2. Oil and fuel prices 109
• 5.2.3. Technological assumptions 113
• 5.2.4. Policy measures in the scenarios 120
• 5.3. Simulation Results 121
• 5.3.1. Transport demand 121
• 5.3.2. Road vehicle stock 123
• 5.3.3. Fuel consumption 124
• 5.3.4. Biofuel consumption 126
• 5.3.5. Needed biofuel subsidy 133
• 5.3.6. Needed biofuel feedstock 136
• 5.3.7. Greenhouse gas emissions 138
• 5.3.8. Impact of flex-fuel vehicles 140
• Chapter 6 143
• Conclusions and Way Forward 143
• References 147
• Appendix 2 Current Vehicle Pricing Structure in Indonesia 162