COST BENEFIT ANALYSIS OF SUSTAINABLE AVIATION FUELS (SAF) USE IN INDONESIA

• Main Author: Muhammad Haris, Fadel
• Format: Theses
• Language: Indonesia
• Subjects: Transportasi ; transportasi darat
• Online Access: https://digilib.itb.ac.id/gdl/view/87160
• Institution: Institut Teknologi Bandung

Global climate change is one of the biggest challenges facing the aviation sector, which contributes 2% of the world's total carbon dioxide (CO?) emissions. Indonesia, as the largest archipelagic country, is facing an increase in emissions from this sector along with projected air traffic growth of 6.4% per year until 2037. SAF is defined as aviation fuel derived from renewable raw material sources, such as biomass, vegetable oils, animal fats and organic waste. Sustainable Aviation Fuels (SAF) offer the potential for up to 80% emission reduction compared to conventional jet fuel, but high production costs, limited infrastructure, and issues of raw material sustainability are major obstacles. This study aims to analyze the economic feasibility and environmental benefits of using SAF in the Indonesian aviation sector. The study uses a mixed methods approach that combines quantitative and qualitative data. Primary data were obtained through semistructured interviews with Indonesian Experts for the Alternative Fuel Task Group – Committee Aviation on Environment Protection (CAEP) – International Civil Aviation Organization (ICAO). Secondary data included industry reports, scientific journals, and fuel emissions and cost data. The analysis was conducted using the Cost-Benefit Analysis (CBA) method to calculate the Net Present Value (NPV), Benefit-Cost Ratio (BCR), and carbon emission reductions, as well as data triangulation to identify challenges and opportunities for SAF implementation and strengthen the research results. The research results show that in the 50% SAF blending scenario until 2060, SAF can generate a positive NPV of IDR 32 trillion with a BCR of 1.35, indicating economic feasibility despite an increase in airline operating costs of 15–20%. In addition, SAF is able to reduce carbon emissions by up to 4,158,372 million tons of CO? in a year, which is also in line with supporting Indonesia's decarbonization target. The novelty of this study lies in the in-depth analysis that covers economic, technical, and policy aspects simultaneously, offering an integrated solution for decarbonizing the aviation sector. This study contributes to the academic literature by providing an economic evaluation model for SAF adoption in developing countries. In addition, the findings also provide strategic policy recommendations, such as fiscal incentives, infrastructure development, and promotion of local raw materials. With proper policy implementation, SAF can be a sustainable solution that supports the growth of the aviation industry while meeting national emission targets