Indonesia imports the vast majority of the liquified petroleum gas (LPG) it consumes. This obviously drains the foreign exchange reserves. But considering Indonesia has massive coal reserves, the gasification of coal can be an interesting alternative. By converting low-quality domestic coal into Dimethyl Ether (DME), the country can reduce purchases of expensive LPG from overseas.

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As is widely known, coal is the most important energy source for the generation of electricity in Indonesia. Among the key reasons are that Indonesia has huge reserves of coal under its soils (hence it is relatively cheap to use coal, hence attracting plenty of private investment amid ever-growing electricity consumption in Indonesia over the past two decades) and efficient coal-fired power plant technology.

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Currently, coal certainly ranks among the most interesting commodities. On the one hand, Indonesia expressed its commitment to reduce consumption of this dirty fossil fuel (that is especially used as raw material for the generation of electricity in power plants but also in various manufacturing industries such as the cement industry and textile industry) as the country seeks to become ‘carbon neutral’ by 2060 (although many doubt to what extent Indonesia is really committed to this ambition; after all, it has more immediate concerns such as the dozens of millions of Indonesians living below, and just above, the national poverty threshold).

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