Life cycle cost of bioethanol bioeconomy of sugarcane bagasse in Indonesia

As one of the largest agricultural industries in Indonesia, the sugarcane industry plays a vital role in realising the potential of second-generation bioethanol production from sugarcane bagasse (SCB). Despite this fact, SCB is not perceived to be a value-added commodity on a domestic scale, and therefore, it is mostly treated as agricultural waste and disposed via open burning. In this study, life cycle cost (LCC) analysis was carried out to assess the potential of SCB as a feedstock for second-generation bioethanol production in Indonesia. By taking a project lifetime of 20 years and using the average SCB yield per year of a local sugarcane factory (203 kton/year), the total SCB bioethanol yield was estimated to be as high as 30.9 ML/year. The corresponding LCC of the SCB bioethanol production project was determined to be $177.18 million with a payback period of 5.09 years. The levelised cost of bioethanol from SCB ($0.541/L) was lower than the bioethanol selling price recommended by the General Directorate for Renewable Energy and Energy Conservation (EBTKE) at $0.766/L, indicating that the SCB bioethanol production project is economically feasible. The findings of this study provide insight into the potential of SCB as a value-added commodity for second-generation bioethanol production in Indonesia, which will encourage local industries and small and medium enterprises (SMEs) to venture into SCB bioethanol production. • Production feasibility of Indonesian sugarcane bagasse (SCB) has been analysed. • Bioethanol economic feasibility assessed by life cycle cost and payback model. • Life cycle cost is $177 million for a 20-year lifetime of 203 kton. • The payback period is 5.09 years, with levelised cost of bioethanol at $0.541/L. • SCB bioethanol's fuel efficiency is promising at Indonesia's lower selling price.