System dynamics model of gasoline supply and demand for bioethanol production analysis in Indonesia

Abstract

Bioethanol is an alternative solution that fulfills the gasoline demand and directly reduces imports.It has similar characteristics to gasoline and is more sustainable because it is derived from biomass and has lower emissions.The research aims to assess bioethanol production to meet Indonesia's mandatory bioethanol utilization and to reduce imports until 2030 by accomplishing a system dynamic model of gasoline supply and demand in Indonesia.Using system dynamics software STELLA, the model will help us to understand the trend of supply-demand of gasoline in Indonesia with related variables, and with some scenarios, the simulation will be conducted to achieve particular goals.If no intervention exists in the modeled system, the gasoline import trend tends to grow yearly, reaching more than 70% of the total supply.The bioethanol mandate will be achieved when the Mandatory Scenario is used, which will be 20% blended with gasoline in 2025.The scenario will reduce gasoline imports to 4.13-10.39 million kL during the simulation period.Meanwhile, the Zero Gasoline Import Scenario will need 31.54-43.91 million kL of bioethanol, and the blending rate of bioethanol will be 71-76%.Therefore, the government should set an E75-E80 mandate if gasoline imports are to be abolished.Several policies that can support the scenario and be proposed to the government are also given, such as incentives for feedstock and bioethanol producers, price regulation for gasoline and bioethanol, and incentives for the customer and automotive manufacturers.

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