Dynamic modeling of CPO supply to fulfill biodiesel demand in Indonesia

Biofuel is one of the best alternative solutions to fulfill the fuel demand, due to the increasing of energy needs and the limited reserve of fossil fuel. Biodiesel, a liquid biofuel and derived from biomass, is produced from vegetable oil, animal fat and other sources to replace diesel oil. Indonesia has been producing biodiesel from vegetable oil, such as Crude Palm Oil (CPO). Because most of Biodiesel feedstock is derived from plant, which is also utilized for human food, it will become a major problem for food security issue of the country. Furthermore, the feedstock production also has some threats regarding to the limitation of land use for feedstock cultivation and infinite export commodity due to high export demand and promising price. The research aims to assess the production of CPO as the Biodiesel feedstock in Indonesia with all related constraints and without threating the food security. Using Dynamic Modeling with Stella Software, the CPO production is modeled with influence variables and their correlations, such as feedstock demand for export, food and Biodiesel, feedstock consumption, land, productivity and policy regarding CPO production, Biodiesel demand and Diesel oil import. The simulation results, that in the year 2019, CPO Production for energy will not be sufficient to fulfill the Biodiesel Demand, but if the reserve of CPO Supply is utilized for energy, there will be plenty biodiesel produced to meet the demand, without interfering the food security and export commodity. The Government should synchronize the distribution of CPO by making list of priority order (food, fuel, export) in order to attain food and energy security. If B30 mandate is being accelerated, CPO export commodity should be limited to maximum 74.7 % of CPO Production in order to meet this mandate. With this scenario, diesel oil import could be reduced about 1.7-1.8 million kL.