4 Chinese Firms Review Indonesia’s Coal DME Project: What Were the Findings?
4 Chinese Firms Review Indonesia’s Coal DME Project: What Were the Findings?
Admin Ugems
The Ministry of Energy and Mineral Resources (ESDM) revealed that four companies from China have conducted studies to follow up on the coal downstreaming project through gasification into dimethyl ether (DME) as a substitute for liquefied petroleum gas (LPG). In this regard, the Director General of Minerals and coal (Dirjen Minerba) of the Ministry of Energy and Mineral Resources, Tri Winarno, said that the four companies from the Panda Country concluded different study results.He did not deny, one of them stated that the DME project was not feasible or could not be done in Indonesia. Meanwhile, the rest revealed varying numbers, especially regarding the amount of the company's capital return or internal rate of return (IRR) which could reach 12% or even 22%."Then we thought, how can this be like this? How come there is such a big gap between them. Well , we have to exercise this ," said Tri at the Mining Forum 2025 agenda, quoted on Wednesday (3/19/2025). The Ministry of Energy and Mineral Resources then asked the four companies to provide sample calculations so that the coal DME project study would not only be a calculation on paper, but could be implemented properly. "Indeed, we plan to replace LPG with DME which we import around 7-8 million tons per year, but the [substitution] process cannot be done all at once. Gradually, we hope to be able to reduce these import figures," he said.On the other hand, Tri said that currently in any part of the world, all countries are prioritizing their own interests over other countries. He gave the example of Europe, which is currently increasing its budget to buy firearms, but does not depend on the United States (US).French President Emmanuel Macron recently called on European Union countries to reduce their reliance on US-made military equipment and switch to European-made defense products." Why doesn't Europe buy from the US ? What 's the logic? This is NATO . The world is not doing well. The US to Canada also banned several products [by imposing] taxes and others," he said.“My point is, almost all countries are thinking about how their country can fight and progress.”DPR's suggestionOn the same occasion, Chairman of Commission XII of the Indonesian House of Representatives Bambang Patijaya said that the government should not only rely on one country in carrying out coal DME project technology in Indonesia. "Many of the technology proponents, we ask them to have a beauty contest . PT Bukit Asam Tbk [PTBA] for example, who was assigned, has the right to choose who he wants to invest in. I think we need to think about a new formulation on how the technical management is," he said.ESDM Minister Bahlil Lahadalia once said that the coal gasification project into DME would use technology transfer from the US and China. It is known that only these two countries have been proven to have and develop coal gasification technology into DME in the world.He added that the coal downstream project would be held again at a technical meeting in the near future, including discussing checking the technology to be used.The idea of coal gasification into DME during the administration of President Joko Widodo was once handed over by the government to PTBA, with investment assistance from Air Products & Chemical Inc (APCI) from the US.The project was originally planned for 20 years in the Bukit Asam coal Based Industrial Estate (BACBIE) area located at the mouth of the Tanjung Enim coal mine, South Sumatra. BACBIE will be in the same location as the Sumsel 8 Mine Mouth PLTU.By bringing in foreign investment from APCI, the project was initially expected to be able to produce around 1.4 million tons of DME per year by utilizing 6 million tons of coal per year.However, in mid-2023, APCI withdrew from the project to focus on working on a blue hydrogen project in the US. The decision to leave then left the fate of the coal gasification project into DME in limbo until now.This project previously received a lot of criticism from various groups, because it was considered uneconomical if it was intended to substitute LPG imports which are worth around IDR 7 trillion per year.From the mining business community, the Executive Director of the Indonesian Mining Association (IMA) Hendra Sinadia once said that coal gasification into DME is a very expensive project."To convert coal into gas, for example into DME, there is a technology. We don't have the technology. In the world, there is not much technology, that's why it's expensive," said Hendra when met on an occasion recently.