*3.2. Discussion*

As depicted in Figure 1, the biofuel supply chain contains the upstream (biomass production, pre-treatment, feedstock storage) and downstream (conversion and bioenergy utilisation) processes. Following the increasing volume of the biofuel blend and the expansion of the industries practising such mandatory blend, there will be increasing pressure in securing the biomass availability for the upstream process. For example, in Malaysia, the implementation of the B10 program will consume up to 750 kt of oil palm annually [81]. For Indonesia, the government has to secure a biofuel supply of 9.59 <sup>×</sup> 10<sup>9</sup> L for the implementation of the mandated blend of B30 [89]. The study also pointed out the need for more infrastructure support on the fuelling stations to suppler the increasing blend. For Thailand, 15% of extra land for plantation is required in order to achieve its B10 target [97]. This is also complicated where oil palm requires 24 years till maturation [77]. Abdul-Manan et al. [77] identified four major elements for improving the upstream performance, namely improving the fresh fruit bunch yield, improving worker productivity, increasing oil extraction rate and developing biogas plant for oil palm yield. The increasing production of the biomass also requires a parallel installation and upgrading of pre-treatment and storage facilities.

In terms of environmental performance for the upstream processes in securing the biomass availability, the palm oil industry will need to demonstrate better sustainability performance towards a greener environment and a broader market acceptance. [98]. There is still a lack of detailed assessment framework from the NBP. Abdul-Manan et al. [99] discussed the significant variation in the environmental performances from the differences in land use, deforestation, N fertilisers and fertilisation management practice of different palm-based biofuel refinery. Cuˇ ˇ cek et al. [100] also highlighted that footprints used to monitor sustainability usually vary and expressed ambiguously. For environmental footprints, there are carbon emission footprint, water footprint, energy footprint, emission footprint, nitrogen footprint, land footprint and biodiversity footprint [100]. Nitrogen footprint attributed to fertiliser, pesticide and final combustion of biofuel/biomass is often neglected when quantifying the environmental impact of the increasing use of bioenergy. In Indonesia, it was reported that 25% of the oil palm plantations were on peat soils, which can lead to the release of stored carbon and contribute to global warming [101]. From the economic perspective, there are concerns over the financial cost in importing and subsidising petroleum-based fuel [102] which can contribute to a significant expenditure of the government [98]. There is also increasing reluctance of the EU in importing palm oil and palm-derived products [103]. In addition, in the case of Malaysia where the biofuel industry is largely based on palm oil and FAME, Abdul-Manan et al. [77] also pointed out this may limit the technology innovation and the selection of best available techniques, especially in times when there is a change in the government policy or market preferences.

The greatest challenge in achieving its biofuel target is the amount of feedstock which is then associated with uncertain impact on the environmental sustainability due to land-use change, water consumption and net fossil energy savings [86]. With increasing population and rising projection of consumption, Kraxner et al. [104] reported that there would not be enough land to stop deforestation while switching to 100% renewables and conserve natural areas completely, especially in the tropical regions. There is still in need of assessment or optimisation on the sustainability performance for the designing or optimisation of the upstream process as pointed out by [77]. In addition to the environmental sustainability performance such as GHG and C change, some additional aspects of being considered for designing the upstream process include:


The downstream process of the biofuel supply chain involves the conversion and the bioenergy utilisation aspects. Chanthawong et al. [105] identified three major factors affecting the long-term demand for biofuel, which includes the price of biofuels, real gross domestic production and the number of vehicles. Putrasari et al. [87] also pointed out that the biofuel program is limitedly applied to a specific area by the central Indonesia government with low social acceptance and limited research into the development of flexi fuel vehicle. Moreover, there is also competition in the allocation of the bioenergy utilisation. For example, Malaysia has 40% of its palm oil being used to produce biofuel and limiting the supply for vegetable oil demand [106]. Following the tighter environmental regulation, the palm oil biodiesel is also required to perform greener to secure its demand. For example, under the US Renewable Fuel Standards, cellulosic biofuel and biomass-based diesel are required to reduced

lifecycle GHG of at least 60% and 50% [107]. In addition to the improved environmental management during the upstream process, the downstream process could be optimised following the upgrading of conversion technology with a higher extraction rate, less emission to air and more. The installation of anaerobic digestion plant can contribute to GHG reduction through the utilisation of biogas as renewable energy [77]. The diversification of more value-added products from the downstream such as oleochemical derivatives and the utilisation of waste and biomass residuals for 2nd generation biofuels are attractive for improving both the environmental and economic performances [108], briquette and phytonutrients from crude palm oil [109].

In terms of the supply chain design for the downstream process, it is recommended to take into the environmental and social considerations of several aspects on the biofuel consumption that include:

