Crude Palm Oil Waste Treatment Facility with Carbon Tax Benchmarking

Abstract

The Crude Palm Oil (CPO) market of Indonesia is growing, with a production of around 45.8 million metric tons in 2019. The forecasted domestic consumption will achieve 15 million metric tons in 2021. This number tends to increase due to the government policy that encourages the use of palm oil in biodiesel and renewable energy sources. Despite its positive benefit to the economy, CPO suffered from negative campaigns regarding sustainable development issues, particularly in CPO waste management of its derivative. One concern is regarding the availability of CPO waste treatment facility. The waste treatment facility should be located strategically considering various factors. This study proposed a mixed-integer linear programming model for the green facilities problem. The model is used to decide the facility location and allocation of CPO waste treatment by considering transportation cost, facilities development cost and emission cost as environmental factors.