Profitability and Sustainability of Small - Medium Scale Palm Biodiesel Plant

The mandatory of biodiesel application at 20% blending (B20) has been started since January 2016. It creates huge market for biodiesel industry. To build large-scale biodiesel plant (> 100,000 tons/year) is most favorable for biodiesel producers since it can give lower production cost. This cost becomes a challenge for small - medium scale biodiesel plants. However, current biodiesel plants in Indonesia are located mainly in Java and Sumatra, which then distribute biodiesel around Indonesia so that there is an additional cost for transportation from area to area. This factor becomes an opportunity for the small - medium scale biodiesel plants to compete with the large one. This paper discusses the profitability of small - medium scale biodiesel plants conducted on a capacity of 50 tons/day using CPO and its derivatives. The study was conducted by performing economic analysis between scenarios of biodiesel plant that using raw material of stearin, PFAD, and multi feedstock. Comparison on the feasibility of scenarios was also conducted on the effect of transportation cost and selling price. The economic assessment shows that profitability is highly affected by raw material price so that it is important to secure the source of raw materials and consider a multi-feedstock type for small - medium scale biodiesel plants to become a sustainable plant. It was concluded that the small - medium scale biodiesel plants will be profitable and sustainable if they are connected to pahn oil mill, have a captive market, and are located minimally 200 kin from other biodiesel plants. The use of multi feedstock could increase IRR from 18.68 % to 56.52 %.