The research shows that biodiesel production decisions are not driven by rigid formulas or purely technical calculations. Instead, they emerge from a continuous balancing act between economic efficiency, regulatory compliance, sustainability demands, and real-world operational constraints. In an industry where raw material quality can fluctuate and policy rules can change quickly, adaptability has become a defining feature of daily operations.
Why Decision Making Matters in Biodiesel Production
Biodiesel is a cornerstone of Indonesia’s renewable energy strategy, helping reduce dependence on fossil fuels while adding value to domestic resources such as palm oil. National policies like the B30 and B35 biodiesel mandates have pushed producers to scale up operations, but they have also increased pressure on companies to meet strict quality, cost, and sustainability standards.
At the same time, biodiesel producers face volatile feedstock prices, limited access to advanced technology, and uncertainty in global energy markets. These challenges make production decisions more complex than simple cost calculations. Understanding how industry actors actually make decisions on the factory floor is essential for improving competitiveness and long-term sustainability.
How the Study Was Conducted
The research used a qualitative case study approach at a medium-scale biodiesel plant in Indonesia that has been operating commercially for more than five years. Instead of relying on surveys or numerical models, the researchers conducted in-depth interviews with six key decision makers, including production managers, process engineers, operations managers, regulatory and sustainability staff, senior supervisors, and enterprise-level strategists.
The team also reviewed internal production documents and national renewable energy regulations. By analyzing interview transcripts and documents thematically, the researchers were able to identify recurring patterns in how production decisions are made under real operational conditions.
Key Findings: Decisions Are Adaptive and Multidimensional
The study highlights several core insights that define decision-making practices in biodiesel production.
1. Adaptation Is Essential in Daily Operations Production decisions are frequently adjusted in response to changing raw material quality, equipment performance, and supply disruptions. Standard operating procedures exist, but they are often modified to keep production running smoothly.
One production manager explained that decisions must change quickly when conditions shift, because waiting for perfect information can halt operations. This flexibility allows plants to maintain output despite technical limitations.
2. Economic Efficiency Dominates Decision Making Cost control is the central thread running through nearly all production choices. Decisions about production volume, energy use, and chemical inputs are continuously recalculated to avoid financial losses in an industry with thin profit margins.
Economic considerations influence not only long-term strategy but also daily operational decisions, linking top management priorities directly to actions on the production floor.
3. Regulation Sets the Boundaries National biodiesel policies and environmental regulations act as both a guide and a constraint. Every production decision must comply with renewable energy mandates, quality standards, and environmental rules. Non-compliance carries significant financial and operational risks.
Changes in government policy also affect investment decisions and capacity planning, showing how closely production choices are tied to the regulatory environment.
4. Sustainability Is No Longer Optional Environmental considerations are increasingly integrated into production decisions. Waste management, emissions control, and sustainability certification now shape choices about processes and technology, even when they add complexity or cost.
Sustainability is viewed not just as compliance, but as a factor that protects long-term market access and public trust in biodiesel as a clean energy solution.
5. Professional Experience Fills Information Gaps When data are incomplete or uncertainty is high, managers and engineers rely heavily on professional experience and practical judgment. Experience-based decisions help bridge the gap between formal procedures and unpredictable real-world conditions.
A senior supervisor noted that many effective responses to operational problems are learned over time and are not always written into official guidelines.
Real-World Implications for Industry and Policy
The findings suggest that biodiesel producers need integrated decision-making frameworks that combine technical data, economic analysis, regulatory awareness, sustainability goals, and experiential knowledge. Relying on any single factor in isolation can weaken performance and resilience.
For industry leaders, the study highlights the importance of investing in human capital. Training programs that strengthen decision-making skills and experiential learning can improve operational stability under uncertainty.
For policymakers, the research offers a reminder that regulations shape not only outcomes but also day-to-day behavior inside production facilities. Policies that align better with operational realities can reduce compliance burdens while supporting sustainability goals.
As Indonesia continues to position biodiesel as a strategic renewable energy source, understanding how decisions are actually made on the ground becomes critical for ensuring the industry’s competitiveness and environmental credibility.
Insight from the Authors
According to Harunsyah of Politeknik Negeri Lhokseumawe, production decisions in biodiesel plants cannot rely solely on written procedures or numerical models. Drawing from the study’s findings, he emphasizes that professional experience and adaptive judgment play a crucial role when information is limited and conditions change rapidly. This perspective reflects the lived reality of biodiesel production in emerging renewable energy industries.
Author Profiles
· Harunsyah, M.Sc. – Lecturer and researcher in industrial and energy systems, Politeknik Negeri Lhokseumawe, Indonesia.
· M. Yunus, M.Eng. – Specialist in production and operations management, Politeknik Negeri Lhokseumawe.
· Sariadi, M.Sc. – Researcher in renewable energy and sustainability, Politeknik Negeri Lhokseumawe.
· Alfian Putra, M.Eng. – Expert in process engineering and industrial technology, Politeknik Negeri Lhokseumawe.
· Salmyah, M.Sc. – Researcher focusing on regulatory compliance and sustainability in energy industries, Politeknik Negeri Lhokseumawe.
Source
Article Title: Examining Decision Making Practices in Biodiesel Production Processes within Emerging Renewable Energy Industries
Journal: Formosa Journal of Science and Technology (FJST)
Year: 2026
DOI: https://doi.org/10.55927/fjst.v5i1.385
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