Operational Management Implemented in Biofuel Upstream Supply Chain and Downstream International Trading: Current Issues in Southeast Asia

Abstract

Bioenergy is one of the alternatives to secure energy demand, despite increasing debate on the sustainability of using bioenergy as a renewable source. As the source is disseminated over a large area and affected by seasonality, the potential benefit is highly dependent on other cost and benefit trade-offs along the supply chain. This review paper aims to assess operational management research methods used in biofuel supply chain planning, including both upstream production and international downstream trading. There have been considerable operational management studies done on upstream processes in biofuel production based on different strategic and tactical decision making of a single or multiple feedstocks, considering economic and environmental factor. However, the environmental consideration is often limited to carbon emission where the other environmental impact such as land-use change, biodiversity loss, irrigation and fertilisation are often being overlooked. Biofuel supply chain and trading at international level remain as an apparent research potential where only limited numbers of global energy models explicitly simulate international bioenergy trade. The leading biofuel producing countries in Southeast Asia: Malaysia, Indonesia and Thailand, are selected as a case study to investigate further on how the supply chain management model could be applied considering the existing biofuel support policies. This study is expected to contribute to the selection of operational management research methods used for decision making under robust policy context, followed by several recommendations.