Modelling of Indonesian road transport energy sector in order to fulfill the national energy and oil reduction targets.

Due to increasing concern of the Indonesian government towards the ever increasing national level of carbon emissions and the increasing demand of oil, in 2014 the Indonesian National Energy Council released the National Energy Policy which set the target of an increased renewable energy portion to become 23% of the total national energy consumption while setting a limit to oil consumption to be at most 25%. As the road transportation sector consumes more than 60% of the national oil consumption, measures targeting this sector will be important in fulfilling the target. A model has been set up to evaluate the impact of the measures on oil consumption via two main avenues: the substitution of oil based fuels with alternative fuels (e.g. biofuel, compressed natural gas/CNG), the reduction of oil consumption via vehicle retirement and the acceleration of fuel economy improvement for vehicles. Results have shown that it is important that policies consider the presence of older vehicles in the population since there is presently no vehicle retirement policy or penalty for older vehicles resulting in a large number of old vehicles still being operational. Thus, introduction of new vehicles will have a limited effect on the average fuel efficiency. Implementation of a vehicle retirement policy to reduce the amount of older vehicles is shown to be very effective in stemming the increase of oil consumption. In regards to fuel substitution, oil substitution with ethanol is most impactful, as most motor vehicles in Indonesia rely on gasoline including the rapidly increasing motorcycle population. While oil consumption is also reduced by biodiesel substitution, impact is more limited due to a smaller diesel vehicle population with a lower annual increase of vehicle population. In addition, financial, social and regulatory barriers exist that impend implementation of alternative fuels and vehicle limitation schemes. We also evaluated possible barriers and avenues that can further promote these measures to meet the national energy policy target. • The impact of fuel substitution of Indonesian road transportation energy was simulated. • The avenues in order to meet the national energy policy target were evaluated. • Fuel substitution with ethanol is the most impactful for the Indonesian transportation energy sector. • Oil consumption can be also reduced by biodiesel substitution. • Regulatory barriers exist in the implementation of alternative fuels and vehicle limitation schemes. [ABSTRACT FROM AUTHOR]