Integrating fuzzy analytic hierarchy process into a multi-objective optimisation model for planning sustainable oil palm value chains

Abstract

This study presents a novel integrated decision model for optimal planning oil palm value chains (OPVC) incorporating decisions to minimise biodiversity losses by limiting the expansion of oil palm plantations as needed and generate value from its waste products. The model can answer the following types of question:What is the best way to deploy OPVC in terms of both economic and environmental factors wherein objectives are integrated systematically by experts? How can the demands for palm oil and palm-based materials and energy products be satisfied with and without considering additional land for plantation? Which conversion technologies will be needed, when and where should these be deployed? How can the resources be managed subject to utilisation, production, import, export and transportation constraints?The planning model developed involves two components: (1) a decision framework using fuzzy analytic hierarchy process (FAHP) to incorporate experts’ knowledge in planning and design under uncertainty and (2) a mixed integer linear program (MILP) to determine the optimal expert-based OPVC design. The framework was applied to different scenarios for the Malaysian palm oil industry. Results show that the demand for crude palm oil (CPO) in Malaysia can be fully satisfied while the international demand can be satisfied by about 60% in 2050. However, in order to minimise environmental impacts and risks of biodiversity losses, the contribution of Malaysia towards satisfying global demand for palm oil should be kept to a minimum. Moreover, the current plantations can satisfy future CPO demand after 5 to 10 years, after which best practices to improve palm oil yield and alternatives comparable to palm oil will be needed. The framework can potentially contribute to the development of better policies in the future through the proposed systematic approach in dealing with sustainability issues in the palm oil industry.