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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 RATIOAPPROACH

Author and Affiliation

Fikri Irsyad M. XII IA 4/08

Hernawan Febrianto XII IA 4/10Intan Nur Enima XII IA 4/11

Ragesa Mario Jr XII IA 4/18

Wikaranosa S.S. XII IA 4/24

Mailing Address


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J l K B N 21 S b

Table of contents

Table of contents i

Abstract .... ii

1. Introduction 1

2. Theory . 3

2.1. Cost benefit analysis . 3

2.2. Bioethanol production process .. 4

3. Methodology ... 6

4. Result . 8

4 1 A ti 8


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

Mining Land Using Benefit Cost Ratio Approach

Abstract

Demand for energy will increase along with increasing population, leading to the impact

of climate change. One way to adapt to it while preserving environment is by using fuel

from biomass, like bioethanol. This paper will discuss about bioethanol that can be

made from cassava as renewable energy in Indonesia, and environmental solution

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

approach is used to test the feasibility of the act. The project used as a study case

belongs to PT Indomining that has 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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1. 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 from gasoline; there are other available sources of energy such as coal.

Petroleum and coal are the energy sources that will release greenhouse gas (CO 2) 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 regulations 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


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

documented. For instance, Table 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 inIndonesia 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.

Table 1.1 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


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2.2 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 bakers 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


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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 2.1 Anhydrous bioethanol production processes from sugar and starch-based feedstock


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3. Methodology

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

bioethanol 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 fromcassava 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 glazioviithat is poisonous.

2 O ti d i t t


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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:

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); C I is capital investmentcosts (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

E t K li t i ll i S di t i t if b bi th l


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4. Results

4.1 Assumptions

The plants 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 are 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.

4 2 E ti ti f Bi th l P d ti C t f C


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4.3.2 Economic value of substituting gasoline, diesel and keroseneIn the area like Sangasanga district, 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 in

Table 4.3.Tabel 4.4 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


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After that, there are few things that will be discussed as the matter of effects of the useof cassava-based bioethanol. 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 bioethanol 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

ministers 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


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

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 cant decay. This is because cassava

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

f lti ti i th i k f th hill id t l d i


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6. Future Work and ConclusionsFrom this study we can conclude that the bioethanol 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 bioethanol 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


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References

Augusta Resource Corporation. 2007. Reclamation and Closure Plan,[online] Available

at:

[Accessed 15 August 2011].

Bank Indonesia. 2011. BI Rate. [online] Available

at: [Accessed 11August 2011].

Gero, P. P., & Mulyadi, A. 2011. Harga BBM Bersubsidi Tak Berubah. Kompas,

[online]12 August. Available at:

[Accessed 15 August 2011].

Indosiar. 2008. Etanol dari Singkong Karet [online] Available at: [Accessed 15

August 2011].

Jiputro. 2010. Estimasi Evaluasi Proyek Kebun Singkong. Jiputro.net, [blog] 29

December, Available at:


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Singkong-Jadi-Bioetanol-Tarikan-Mesin-Halus-Rezeki-Pun-Mulus.html> [Accessed

15 August 2011].

Wang, W. 2002. Cassava Production for Industrial Utilization in (the) PRC Present

and Future Perspective. 7th Regional Cassava Workshop. Bangkok.


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Appendix

Annual Early Closure Costing

Overall Reclamation Costing

The Feasibility Study of Producing Bioethanol from Cassava | Appendix 18


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Reclamation Activities Summary (3)

Reclamation Activities Summary (4)


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Reclamation Cost Summary per Activity Area

.

Task

Approx.Reclamation

Area2

(acres)

HazardousMaterials

Cost($)

Water Quality($)

Demolition/CleanupCost ($)

EquipmentCost($)

Labor Cost($)

RevegetationCost($)

Long-termOperation,

Maintenance, andMonitoring Cost

($)

Subtotal DirectCost($)

Indirect Cost($)

Total Cost($)

Rosemont Open Pit 135 41,300 5,000 24,300 70,600 19,600 90,100

Perimeter Berm 402 1,340,800 133,200 199,000 1,673,000 465,000 2,138,000

Waste Rock Storage 1,600 4,178,900 564,400 790,400 5,533,700 1,550,500 7,084,200

Tailings Starter Buttress 3600 948,300 85,700 178,800 1,212,700 336,000 1,548,800

Tailings 540 1,148,500 155,300 266,700 1,570,500 439,600 2,010,100

Process Ponds 20 321,400 29,700 61,800 8,300 99,800 521,000 141,500 662,500

Roads Unknown

Plant Site 120 210,000 5,192,300 960,600 129,000 83,200 6,575,100 1,788,200 8,363,300

Topsoil Stockpiles 200 75,600 10,800 99,000 185,400 51,100 236,500

Stormwater Basins 2 4,100 600 700 5,400 1,500 6,900

Miscellaneous Reclamation Costs 0 25,200 150,000 69,400 103,100 714,000 346,800 1,408,500 390,600 1,799,100

Total 3,379 $ 235,200 $ 321,400 $ 5,372,000 $ 8,829,300 $ 1,195,400 $ 2,455,900 $ 346,800 $ 18,755,900 $ 5,183,600 $ 23,939,500

The Feasibility Study of Producing Bioethanol from Cassava | Appendix 22

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