Optimized supply chain of empty fruit bunches as feedstocks for second generation bioethanol production

The biofuel policy has been given much attention, especially bioethanol blending policy. Empty fruit bunch (EFB) can be used as a feedstock for bioethanol but need more study in terms of supply chain and economical aspect. The novelty of this study is to find the optimal EFB supply chain model in several palm oil mill in Riau Province. Economic evaluation is also carried out to determine the economic value of biorefineries and to obtain economical selling prices of bioethanol products. The Simplex linear programming method is used to optimize the EFB feedstock supply model, and ArcGIS is used to determine and to analyse the distance and location of each facility. There are three scenarios used in our study which are decentralizing, clustering, and centralizing EFB preparation unit. Economic feasibility is also used to calculate bioethanol minimum selling price. Our study shows that the scenario with EFB preparation facilities located in each palm oil mill location is the most efficient supply chain model with the feedstock cost of 6.1 cUSD per kg (Scenario 3). After creating various end-product blends (denoted as E5 to E20), the bioethanol price can compete with retail fuels. The price of E5 is slightly higher than Pertamax 92 RON, being around cUSD 3 per liter more expensive. Meanwhile in E20, the price is cUSD 18 per liter more expensive than the price of Pertamax Turbo RON 98. However, the use of E20 can be considered as it has a lower emission value compared to fossil fuels, potentially reducing emissions by 12 % when compared to RON 90.