The Feasibility Study of Producing Bioethanol

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Topic Energy: Renewable Energy and Environmental Solutions Title THE FEASIBILITY STUDY OF PRODUCING BIOETHANOL FROM CASSAVA PLANTED IN POST-MINING LAND USING BENEFIT COST RATIO APPROACH Author and Affiliation Ratih Kartika Septiningtyas Bachelor Degree, Industrial Engineering/ITB Luh Vita Nurima Bachelor Degree, Industrial Engineering/ITB Gorby Gandhianto Rasyid Bachelor Degree, Industrial Engineering/ITB Dwini Rahmadina Nisahati Bachelor Degree, Management/President Univ. E-mail and Mobile Number [email protected] +6285 721 452 882 [email protected] +6281 2324 0505 [email protected] +6285 782 016 979 [email protected] +6285 714 947 766 Fax Number +6231 848 1637 Mailing Address Jalan Tubagus Ismail V/2A Bandung 40134, West Java, Indonesia

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THE FEASIBILITY STUDY OF PRODUCING BIOETHANOL FROM CASSAVAPLANTED IN POST-MINING LAND USING BENEFIT COST RATIOAPPROACHRenewable Energy and Environmental Solutions

Transcript of The Feasibility Study of Producing Bioethanol

Page 1: The Feasibility Study of Producing Bioethanol

Topic

Energy: Renewable Energy and Environmental Solutions

Title

THE FEASIBILITY STUDY OF PRODUCING BIOETHANOL FROM CASSAVA

PLANTED IN POST-MINING LAND USING BENEFIT COST RATIO

APPROACH

Author and Affiliation

Ratih Kartika Septiningtyas Bachelor Degree, Industrial Engineering/ITB

Luh Vita Nurima Bachelor Degree, Industrial Engineering/ITB

Gorby Gandhianto Rasyid Bachelor Degree, Industrial Engineering/ITB

Dwini Rahmadina Nisahati Bachelor Degree, Management/President Univ.

E-mail and Mobile Number

[email protected] +6285 721 452 882

[email protected] +6281 2324 0505

[email protected] +6285 782 016 979

[email protected] +6285 714 947 766

Fax Number

+6231 848 1637

Mailing Address

Jalan Tubagus Ismail V/2A Bandung 40134, West Java, Indonesia

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The Feasibility Study of Producing Bioethanol from Cassava Planted in Post-

Mining Land Using Benefit Cost Ratio Approach

Abstract

As the population in Indonesia is increasing, demand for energy is also increasing. One

of the ways to adapt to the global climate change is to use fuel from biomass like

bioethanol. This paper will discuss about bioethanol that can be made from cassava as

an act of applying renewable energy in Indonesia, and also will give environmental

solution through the act of planting cassava in a post-mining land. Benefit Cost Ratio

approach is used to test the feasibility of producing bioethanol from cassava planted in

post-mining land. The project used as a study case belongs to PT Indomining that is

been doing the project in Sangasanga district in East Kalimantan.

Keywords: bioethanol, cassava, post-mining land, benefit cost ratio, renewable energy

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Introduction

As the population in Indonesia is increasing, demand for energy is also increasing.

According to the Ministry of Energy and Mineral Resources (EMR), gasoline fuel

consumption was 3.9% above the average quota for the year 2011 (66.06 thousand

kiloliter per day). While diesel fuel consumption reached 5.3% above quota (37.75

thousand kiloliters per day). Gasoline and diesel are the two refined petroleum

products, which are the most widely used in Indonesian society. But as we all know, oil

is a fuel that cannot be renewed.

Apart form gasoline; there are other available sources of energy such as coal.

Petroleum and coal are the energy sources that will release greenhouse gas (CO2) to

the atmosphere. This gas is widely known as the prime cause of the global climate

change. Indonesia had declared to reduce its emission up to 26% by 2020 in United

Nations Climate Change Conference (COP15) in Copenhagen. The government

already issued some regulation to respond to this, such as Presidential Instruction No.

1/2006 and Regulation of the Minister of Energy and Mineral Resources No. 32/2008.

One of the ways to adapt to the global climate change is to use fuel from biomass like

bioethanol. It is renewable, has sustainability of supply and create cleaner environment.

Indonesia have potential ability to develop bioethanol, one of them by using the benefit

of planting cassava. Cassava (Manihot esculenta or Manihot glaziovii) is a starch-

containing root crop of worldwide importance as food, feed and non-food products.

With increasing population pressure and climate change it is predicted that the

production of cassava will increase over the next few decades, and, as a result,

cassava is now an international priority for crop improvement.

Even though, cassava is mainly grown by small-scale farmers, it is predicted that the

production of cassava will increase over the next few decades due to the demand of

cassava as food drived by increasing population and also its increasing use for agro-

industrial processing in Asia. Apart from its traditional role as a food crop, cassava is

likely to increase its value by becoming an important biofuel crop due to its high yields

of starch. Beside the high yields of starch, the total dry matter in spite of drought

conditions and poor soil, together with low agro-chemical requirements, cassava is a

plant that is suitable for this project since the area used to plant the cassava is the post

mining-land. The cassava planting is needed to reclaim the post-mining land. Having

these characteristics resulted in an energy input that represents only 5–6% of the final

energy content of the total cassava biomass. This translates to energy profit of 95%,

assuming complete utilization of the energy content in the total biomass.

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The energetic and economic aspects of using cassava as a biofuel crop are well

documented. For instance, Tabel 1.1 shows a direct comparison of bioethanol

production from different energy crops which was reviewed by Wang (2002). The

conclusion was that cassava compared favorably to other crops such as maize,

sugarcane and sweet sorghum. Indeed, the annual yield of bioethanol was found to be

higher for cassava than for any other crops, including sugarcane. Hence, the interest in

production of cassava starch-derived bioethanol is progressively increasing in

Indonesia and the rest of world. In this review, it is mainly addressed on biological

issues of cassava as a biomass for biofuel production and some of its economic

aspects in Indonesia.

Tabel 0.1 Comparison of bioethanol production from different energy crops

Crops

Yield

(ton ha-1

year-1)

Conversion rate to bioethanol

(L ton-1

)

Bioethanol yield

(L ha-1 year

-1)

Sugarcane 70 70 4900

Cassava 40 150 6000

Sweet sorghum 35 80 2800

Maize 5 410 2050

Wheat 4 390 1560

Rice 5 450 2250

Mining companies have already planned to produce bioethanol from cassava planted in

post-mining land as a form of environmental stewardship and renewable energy

development. Toxic cassava (Manihot glaziovii) will be planted to avoid competition

between its role as food crop for local communities and as biofuel crop for producing

bioethanol.

In this paper, Benefit Cost Ratio approach is used to test the feasibility of producing

ethanol from cassava planted in post-mining land. The expected outcome of this paper

is that producing bioethanol from cassava planted in post-mining land is feasible and

commercially successful, according to the feasibility study. Then, the idea can be

proposed as a CSR (Corporate Social Responsibility) project for mining companies in

Indonesia. In addition, this project can help reducing emission from green house gas

that causes the global climate change because it is cleaner fuel, provides access to

energy for remote communities and hopefully can be a solution to the energy scarcity

problem in Indonesia. Moreover, there will be an analysis of competitiveness between

bioethanol from cassava and gasoline, diesel and kerosene.

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Theory

1.1 Cost-benefit analysis

Cost-benefit analysis (CBA) is an economic decision-making approach, used

particularly in government and business. CBA is used in the assessment of whether a

proposed project, programmed or policy is worth doing or to choose between several

alternative ones. It involves comparing the total expected costs of each option against

the total expected benefits, to see whether the benefits outweigh the costs, and by how

much.

In CBA, benefits and costs are expressed in money terms, and are adjusted for the

time value of money, so that all flows of benefits and flows of project costs over time

(which tend to occur at different points in time) are expressed on a common basis in

terms of their "present value".

CBA usually tries to put all relevant costs and benefits on a common temporal footing

using time value of money formulas. This is often done by converting the future

expected streams of costs and benefits into a present value amount using a suitable

discount rate. Empirical studies suggest that in reality, people do discount the future

like this.

The practice of cost–benefit analysis differs between countries and between sectors

(e.g., transport, health) within countries. Some of the main differences include the types

of impacts that are included as costs and benefits within appraisals, the extent to which

impacts are expressed in monetary terms, and differences in the discount rate between

countries. Agencies across the world rely on a basic set of key cost–benefit indicators,

including the following:

NPV (net present value)

PVB (present value of benefits)

PVC (present value of costs)

BCR (benefit cost ratio = PVB / PVC)

Net benefit (net benefit = PVB - PVC)

The accuracy of the outcome of a cost–benefit analysis depends on how accurately

costs and benefits have been estimated.

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1.2 Bioethanol production process

Both sugar-containing substrates such as sugar cane, sugar beet, molasses, and

starch-containing substrates such as cassava, and corn can be deployed for bioethanol

production. Although the bioethanol production processes from both type of substrates

are quite similar, their processing techniques are slightly different in the initial raw

materials preparation stage. Sugar-containing substrates, by nature, are fermentation

ready without further modification, while the starch-containing ones need an additional

step to convert them into fermentable sugar. Subsequent production processes are

essentially the same for both types of substrates.

Starch is converted into fermentable sugar via “hydrolysis”. Hydrolysis is a chemical

reaction between starch and water which breaks down the long chain of starch polymer

into fermentable sugar. There are two techniques for hydrolysis: enzymatic and acid

hydrolysis. After fermentable sugar is obtained, bioethanol can be produced directly by

microbial conversion through fermentation by the same strain of yeast used with sugar-

based substrate. Yeast strain used in the sugar fermentation is usually baker’s yeast

(Saccharomyces cerevisiae). It is deployed as a seeding for the fermentation.

Initially, alcohol derived from yeast fermented sugar has a concentration of only about

5–15% by weight (Sorapipatana & Yoosin, 2011). Its concentration is then further

increased by separating it from water and other non-fermentable materials. The final

concentration of alcohol attained is 95–96% by weight using a distillation method. The

concentration at this level is normally called “hydrous alcohol” which can fuel only

specially designed internal combustion engine vehicles such as flex fuel cars.

In order to make sure that commercial gasohol (gasoline bioethanol) is compatible with

all types of vehicles, the purity of produced bioethanol must be an anhydrous

bioethanol (99.5% alcohol concentration) because bioethanol tends to separate from

gasoline in the blended gasohol after a period of time unless its purification is higher

than 96% by weight. Consequently, hydrous alcohol is further upgraded by removing

the remaining residual water by a “dehydration process” to produce anhydrous alcohol.

It should be remarked here that bioethanol production from starchbased crops

generally yields four main by-products: stillage, fusel oil, carbon dioxide, and distiller’s

dried grain (DDG) while bioethanol production from sugar-based crops does not

produce DDG. Thus, bioethanol production from starch-based crops yields one

additional by-product more than that of the sugar-based crops. Stillage is residual beer

remaining in the distillation waste after the alcohol has completely been removed from

a distillation column.

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Two distillates are obtained during a distillation process: alcohol and fusel oil. CO2 is

produced by yeast during an anaerobic fermentation process. The amounts of CO2

produced, by weight, are nearly equal to the amounts of bioethanol obtained in the

fermentation process. The bioethanol production processes mentioned above are

summarized and illustrated in Figure 2.1.

Figure 0.1 Anhydrous bioethanol production processes from sugar and starch-based feedstock

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Methodology

In this paper, Benefit Cost Ratio approach is used to test the feasibility of producing

ethanol from cassava planted in post-mining land. The methodology starts from

calculating the cost. Then, calculate the benefit. Finally, compare the benefit and the

cost.

According to Sorapipatana & Yoosin (2010), costs of bioethanol production from

cassava in post-mining land can be categorized into four groups which are feedstock

costs, capital investment costs, operating and maintenance costs, and gains of by-

products. Since this study discussed about bioethanol production from cassava planted

in post-mining land, there is one more cost to be accounted that is post-mining land

reclamation cost.

1. Feedstock costs

The price of cassava feedstock is varied by location, seasons, local supply-demand

conditions, and transportation (Sorapipatana & Yoosin, 2011). The type of cassava

can also affect its feedstock price. In Indonesia, the common type of cassava is

Manihot esculenta that is edible and Manihot glaziovii that is poisonous.

2. Operating and maintenance costs

Costs that are included in the operating and maintenance costs are labor, energy,

electricity, ingredients (e.g. enzymes, yeast, etc), machine repair and maintenance

costs, taxes, insurances and administrative expenses. (Sorapipatana & Yoosin,

2011)

3. Capital investment costs

Sorapipatana & Yoosin (2010) stated that capital costs cover all the initial costs such

as machines and equipments procurements and their installations. The capital costs

also include land site preparation and building, infrastructure and other facilities of a

processing plant. In this study, the land preparation costs are excluded from capital

costs since the land preparation costs can be treated as reclamation costs.

4. Reclamation costs

Reclamation cost is the cost needed to reclaim the post-mining land so that it can be

used to other purposes. In this study, reclaimed post-mining land will be used as

cassava field to produce bioethanol.

5. Gains of by-products

By products from bioethanol production from cassava are carbon dioxide, fusel oil,

stillage and DDG (Sorapipatana & Yoosin, 2011). Taken from Sorapipatana &

Yoosin (2010), the unit cost of bioethanol production is expressed by the equation:

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CEt =CF + CO&M + C1 – CR – CB (3-1)

where CEt is the bioethanol production costs (USD/L); CF is cassava feedstock costs

(USD/L); CO&M is operating and maintenance costs (USD/L); CI is capital investment

costs (USD/L); CR is reclamation costs (USD/L); CB is gains of by-product (USD/L).

The benefits that come from bioethanol production in post-mining land are divided into

two groups are the unit profit from the bioethanol sales and the economic value of

substituting gasoline, diesel and kerosene with bioethanol.

1. The unit profit from the bioethanol sales

The unit profit is the profit that the company gets for every liter bioethanol sold after

subtracted the unit selling price with total unit cost. In Indonesia, bioethanol is sold

for IDR 10,000/L.

2. The economic value of changing gasoline, diesel and kerosene with bioethanol

The economic value is estimated by calculating the amount of money the people of

East Kalimantan, especially in District Sangasanga district, can save if buy

bioethanol instead of gasoline, diesel and kerosene.

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Results

1.3 Assumptions

The plant’s capacity is 150,000 L/day.

Operation days of plant are assumed to be 330 days/year.

The project life is assumed to be 20 years.

The annual interest rate of the investment is 6%.

Prices used in this study is based on prices in 2011. If there are financial values in

other years, then it will be converted to its present value using assumed interest rate

above.

The exchange value of USD to IDR is IDR 9045/USD based on Bank Indonesia rate

at 11th of August 2011 (Bank Indonesia, 2011).

The yield of bioethanol from cassava and the data of other raw materials needed,

such as enzymes, yeasts, water and chemicals, were taken from Sorapipatana &

Yoosin (2010) which based on figures obtained from Thailand Institute of Scientific

and Technological Research (TISTR)’s pilot plant.

1.4 Estimation of Bioethanol Production Cost from Cassava

1.4.1 Feedstock costs

In 2011, the price of feedstock is varied between IDR 350 to IDR 690 per kilogram

(Jiputro & Sutardi, 2010). The cost of cassava for a liter bioethanol produced can be

estimated with the yield of bioethanol from cassava at 160 L/ton (Table 4.1).

Tabel 4.1 Technical assumption in this study

Bioethanol yield (L/ton)

Plant’s capacity (L/day)

Annual production (million L/day)

Operation days (days)

Project life (years)

Annual interest rate

Year of cost basis

Exchange value of USD to IDR

160

150,000

49.5

330

20

6%

2011

IDR 9045/USD

The price of poisonous cassava feedstock based in 2010 and 2011 is ranged between

IDR 350,000 to IDR 690,000 per ton (Augusta Resource Corporation, 2007 & Sutardi,

2010). The average price based on prices above is IDR 500,000/ton. With the

bioethanol yield from cassava is 160 L/ton, then calculation of cassava feedstock cost

per liter bioethanol is IDR 2187.5 to IDR 4,312.5, with average of IDR 3,250 or

equivalent to 24.19 cents/L to 47.68 cents/L, with average of 35.93 cents/L (Table 4.2).

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Tabel 4.2 The maximum, minimum, and average feedstock costs of cassava in IDR/ton and

IDR/Lbioethanol during 2010

Feedstock Maximum Minimum Average

IDR/ton IDR/Lbioethanol IDR/ton IDR/Lbioethanol IDR/ton IDR/Lbioethanol

Cassava 350,000 2,187.5 690,000 4,312.5 520,000 3,250

1.4.2 Capital investment costs

There are two techniques that can be used to estimate the capital investment costs.

First, the capital investment costs based on machines and equipments costs from the

manufacturer’s price. Second, the capital investment costs based on historical prices

adjusted to the present value in the reference year.

In this study, the calculation of Sorapipatana & Yoosin (2011) is adopted to estimate

the capital investment costs. The total capital investment costs were found to be 30.2

million USD (values in year 2005) for a project life of 20 years, with bioethanol

production capacity of 150,000 L/day. Then this value is adjusted to the present price in

2011 which are about 21.29 million USD.

To estimate the capital cost per liter of the bioethanol, Sorapipatana & Yoosin (2011)

annualized the capital cost with equation:

A = P (i(1+i)n /(1+i)n-1) (4-1)

where A is the annual payments (IDR or USD/year); P is the present worth of the first

investment cost (IDR or USD); i is the annual interest rate; and n is the project life

(years).

Then the annualized capital investment cost is divided by annual amounts of bioethanol

produced resulted in the capital cost per liter of the bioethanol. After calculation, the

capital investment cost per liter of the bioethanol was 0.1 cents/L for the annual interest

rate of 6% and the project life of 20 years.

1.4.3 Operating and maintenance costs

In Indonesia, there are already several plants that produce bioethanol from cassava.

One of the plants is located in East Nusa Tenggara. Then we can estimate the

operating cost in this study by adopting the East Nusa Tenggara plant’s operating cost.

The operating cost in East Nusa Tenggara’s plant was IDR 750,000/day with

production up to 300 L/day in the plant with 3000 ton cassava/day capacity (Nur, 2011).

So, the unit operating cost is calculated by dividing operating cost/day with amount of

production/day. Thus, the unit operating cost is IDR 2,500/L or 27.63 cents/L.

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1.4.4 Reclamation costs

To estimate reclamation cost, the calculation that had been done by Augusta Resource

Corporation (2007) is used. The total reclamation cost is USD 23.8 million to reclaim

3,625 acres in 16-19 years. The detail of reclamation cost done by Augusta Resource

Corporation (2007) can be seen in Appendix A1. Then, this number is adjusted to the

present value in 2011 which is USD 3,631,592 per 3,625 acres or USD

1,001,818/hectare.

To estimate the reclamation cost per liter of the bioethanol, Equation 4-1 is used to

annualize the reclamation cost. The annualized reclamation cost is USD

87,343.1/hectare. PT Indomining as the project owner has allocated area of 100

hectares of post-mining land to be used as field to plant cassava for producing

bioethanol. Thus, the total annualized reclamation cost is USD 8,734,310. If the annual

production of 150,000 L/day and the capacity is 4.95 million L/year, then the unit

reclamation cost is 17.64 cents/L.

1.4.5 Gains of by-products

According to Sorapipatana & Yoosin (2010), one of the gains of by-products resulted

from bioethanol production that is useful is DDG. DDG can be sold as animal feeds.

The other is biogas resulted from waste water treatment can be used as fuel for

heating. Sorapipatana & Yoosin (2010) estimated the total value of the gains of by-

product from cassava is 0.273 cents/L.

1.4.6 Total unit cost

The total unit cost of the bioethanol production from cassava in the post-mining land

can be calculated by using Equation 3-1. Then, the total unit cost is 81.04 cents/L or

IDR 7,330.35.

1.5 Estimation of Bioethanol Production Benefit from Cassava

1.5.1 Unit profit from the bioethanol sales

The range of price of bioethanol used for gasoline replacement in 2011 is about IDR

11,000/L (Sutardi, 2010). With the total bioethanol cost per liter of IDR 7,330.35/L, then

the profit derived of the sale of one liter of bioethanol produced from cassava is IDR

3,669.65/L equivalent to 40.57 cents/L.

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1.5.2 Economic value of substituting gasoline, diesel and kerosene

In the area like District Sangasanga, East Kalimantan, the availability of fuel, whether

gasoline, diesel or kerosene is quite rare. It is proven by the price of these fuel is

changing over time according to the scarcity of the product. The price of gasoline

reached IDR 15,000 in remote area of Kalimantan in June 2011 (Joewono, 2011) and

the price of kerosene reached IDR 12,000 in East Kutai, East Kalimantan in January

2011 (Minyak Tanah di Kutai Timur Rp 12 Ribu per Liter , 2011) while the prices set by

government are IDR 4,500/L for gasoline and IDR 2,500/L for kerosene (Gero &

Mulyadi, 2011).

The economic value is estimated by the amount of money that can be saved by using

bioethanol instead of gasoline, diesel or kerosene. The calculation can be seen below.

Tabel 4.3 Estimation of economic value of changing gasoline, diesel and kerosene with bioethanol

Price (IDR/L) Difference

(IDR/L)

Bioethanol Gasoline

11,000 15,000 4,000

Bioethanol Kerosene*

11,000 22,500 11,500

*one liter of bioethanol is equivalent to nine liters of kerosene. (Etanol dari Singkong

Karet, 2008)

1.5.3 Total unit benefit

The estimation of total benefit is calculated by summing the unit profit from bioethanol

sales and the economic value of substituting gasoline and kerosene with bioethanol

which is IDR 19,170 equivalent to USD 2.12.

1.6 Benefit Cost Ratio

BCR can be calculated by using equation:

BCR = PVB / PVC (6-1)

BCR = IDR 19,169.65 / IDR 7,329.90

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Discussion

The objective of this paper is testing the feasibility of producing bioethanol from

cassava planted in post-mining land using Benefit Cost Ratio approach. The

methodology starts from calculating the cost; feedstock costs, capital investment costs,

operating and maintenance costs, reclamation costs and gains of by-products. Then,

calculate the benefit; unit profit from the bioethanol sales and economic value of

substituting gasoline, diesel and kerosene. Finally, calculate the ratio between the

benefit and the cost. Table 5.1 contains the summary of the computation.

Table 0.1 Benefit cost ratio

Benefit Costs

Detail IDR/L Detail IDR/L

Unit profit from the bioethanol

sales 3,669.65 Feedstock costs 3,250.00

Economic value of substituting

gasoline, diesel and kerosene 15,500.00 Capital investment costs 9.05

Operating and maintenance

costs 2,500.00

Reclamation costs 1,595.54

Gains of by-products 24.69

Total unit benefit 19,169.65 Total unit costs 7,329.90

Benefit Cost Ratio 2.62

From the calculation, the ratio is 2.62 > 1. Based on Benefit Cost Ratio approach result,

producing bioethanol from cassava planted in post-mining land is feasible and

commercially successful. But this study hasn’t included the intangible benefit of

producing bioethanol from cassava planted in post-mining land, such as economic

value derived from adding jobs for local community and claimed carbon credit potential

for reducing CO2 emission.

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After that, there are few things that will be discussed as the matter of effects of the use

of cassava-based ethanol. The discussion will consist of certain categories based on

some aspects, there are:

Politic

In terms of political, the implementation and utilization of cassava refers to some

regulations of the government of Indonesia, and those are Presidential Instruction

No. 1/2006 and Regulation of the Minister of Energy and Mineral Resources No.

32/2008. Presidential Instruction No. 1/2006 explains about supplies and the use of

bio-fuel as alternate fuel. Thus, it can be concluded that the use of cassava to

produce bio-ethanol is one thing that can be done to meet the Presidential

Instruction. Then the minister of energy and mineral resources’ regulation contains

the rules of supplying, utilizing, and bio-fuel trade system as an alternate fuel. In the

minister’s regulations, there are guidelines in using, distributing, and sale of bio-fuels

as a substitute for fuel. Therefore, in order to produce bioethanol it is required to

form a business entity that the use of bioethanol can be ordered and distributed and

sold to the society.

Economy

In terms of economical, the utilization of cassava to produce bioethanol has some

very good feedbacks. It can provide employment to local inhabitants who live in the

post-mining area which will lead to the increasing of economics degrees for the

people. Besides, it can give advantages to the company who execute the process of

producing bioethanol. In other words, it can be expected to give positive contribution

to the country’s economy.

Social

In terms of social, the utilization cassava as bioethanol can be proved by the

increasing of development of small industries as the result of establishment of

domestic industries so that it will improve the livelihood for the local people. Then

the ex-mining land use can be an object in the CSR project of the mining company,

so it can provide benefits in other aspects.

Energy scarcity

The utilization of cassava as bioethanol can be used as an alternative solution to the

energy shortages isusue in Indonesia. Thus, this feasibility analysis is meant to find

out whether the bioethanol production can be used to substitute the common fuel

Indonesian people consume. From analysis that have been done, it can be proved

that it can be implemented to substitute the common used energy. Besides that, the

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utilization of bioethanol can also fulfill the energy needs of inhabitants around the

production of bioethanol area or other remote areas.

Environment

In terms of environmental, the process of cultivating cassava in post-mining areas

can restore the mineral soil so that the area can’t decay. This is because cassava

does not require soil with high mineral, so it can be grown in any land. Then, the

utilization of bioethanol can lessen greenhouse emissions, for it is more eco-friendly

fuel. By reducing greenhouse gas emissions, it can contribute to achieve the

proficiency level targets to reduce emissions by 26% in 2020 as the United Nations

Climate Change Conference (COP15) stated it in Copenhagen.

Obstacles

In addition to the positive impacts that can be generated by the use of cassava to

produce bioethanol as a fuel substitute, there are several obstacles to be

encountered in implementing them. The Cassava-Based Fuel Ethanol production at

industrial level meets challenges of the lagged cassava planting scale and

management. As cassava is able to grow in poor soils on marginal lands, expansion

of cassava cultivation in the region can make use of the hillside wasteland in

Kalimantan, but logistical problems associated with transportation of these feed

stocks should be of concern. Another problem is that excessive use of fertilizers,

especially inorganic fertilizers that cause more emissions, may be used to achieve

high yield of cassava in plain soil.

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Future Work and Conclussions

From this study we can conclude that the ethanol production from cassava planted in

the post-mining land by is feasible according to the result of Cost Benefit Analysis. It is

shown in the ratio of cost and benefit estimated from this project. The ratio is 2.62

which is higher than 1. The project itself is highly potential to be applied in Indonesia,

from the political view; the government has established several law and legislations to

encourage the production of bioethanol, from the economical and social aspect; the

project is already proven to be able to give profits to the producer and to encourage the

growth of small industries in Indonesia, in the terms of energy; the bioethanol produced

from cassava is environmentally friendly and able to produce less carbon emission

than the fuel we use now, the last but not least, from the view of environment, the

cassava planted in the post-mining area can help enrich the soil in the area.

This study acknowledge that this project can reducing emission from green house gas

because the ethanol is cleaner fuel, provide access to energy for remote communities

and also generate profit for the producers.

However, there are some flaws in this study that is opened for further study in the area

of bioethanol production from cassava or even the renewable energy solutions. Due to

lack of data, this study cannot calculate all intangible benefit derived from the project,

such as economic value derived from adding jobs for local community and claimed

carbon credit potential for reducing CO2 emission.

Page 18: The Feasibility Study of Producing Bioethanol

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Appendix A1

Annual “Early Closure” Costing

Overall Reclamation Costing

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Reclamation Activities Summary (1)

Reclamation Activities Summary (2)

Page 22: The Feasibility Study of Producing Bioethanol

Reclamation Activities Summary (3)

Reclamation Activities Summary (4)

Page 23: The Feasibility Study of Producing Bioethanol

Reclamation Cost Summary per Activity Area