Assessment of Indonesia’s Future Renewable Energy Plan: A Meta-Analysis of Biofuel Energy Return on Investment (EROI)

Abstract

In early 2020, Indonesia implemented the biodiesel 30 (B30) program as an initiative to reduce Indonesia’s dependency on fossil fuels and to protect Indonesia’s palm oil market. However, palm oil has received international criticism due to its association with harmful environmental externalities. This paper analysed whether an investment in palm oil-based biofuel (POBB) provides Indonesia with the ability to achieve its environmental and financial goals. In this research, we performed a meta-analysis on biofuel energy return on investment (EROI) by examining 44 biofuel projects using ten types of biofuel feedstocks from 13 countries between 1995 and 2016. Results showed an average EROI of 3.92 and 3.22 for POBB and other biomass-based biofuels (OBBB), respectively. This shows that if only energy inputs and outputs are considered, biofuels provide a positive energy return. However, biofuels, including those from palm oil, produce externalities especially during land preparation and land restoration. We also compared these EROI biofuel results with other renewable energy sources and further analysed the implications for renewable energies to meet society’s energy demands in the future. Results showed that biofuel gives the lowest EROI compared to other renewable energy sources. Its EROI of 3.92, while positive, has been categorised as “not feasible for development”. If Indonesia plans to continue with its biofuel program, some major improvements will be necessary.