Environmental and socioeconomic assessment of rice straw conversion to ethanol in Indonesia : The case of Bali

Abstract: The vast rice production in some developing Asian countries like Indonesia raises expectation on poverty alleviation and energy diversification through second generation biofuel production from rice residues, specifically rice straw. This work attempts to estimate the potential environmental and socioeconomic benefits of rice straw-to-ethanol project in Indonesia. Literature research and interviews are performed to quantify several environmental and socioeconomic indicators that are considered as the major concerns inimplementing an energy project. Assuming all the technically available rice straw in Bali is used (~244-415 kilotonne/year), ethanol production may yield gasoline replacement, lifecycle GHG savings, GDP contribution, foreign exchange savings, and employment beneficiaries of 55-93 ML/year, 140-240 millionUSD/year, 19-32 kilotonne of CO2-equivalent/year, 100-180 million USD/year, and 2,200-3,700 persons, respectively. Sensitivity analyses are done for some parameters, showing that ethanol yield, total capital cost, feed-in-tariff for electricity, and imported crude oil price are the major factors affecting the viability of rice straw-to-ethanol project in Indonesia.