BEC Targets Coal Downstreaming to Reduce Methanol Imports

PT Bumi Etam Chemical (BEC) is targeting its coal downstreaming project into methanol to reduce imports of the commodity, demand for which is increasing due to the B50 biodiesel programme. “Our main target from the start has been to substitute methanol imports,” said BEC President Director Rio Supin after the signing of the Front-End Engineering Design (FEED) Contract and EPCC Framework Agreement in Jakarta on Wednesday. BEC is a joint venture between PT Arutmin Indonesia, PT Kaltim Prima Coal, PT Istana Karang Laut, and China National Chemical Engineering Co., Ltd. The coal gasification project in Kutai Timur, East Kalimantan, is targeted to produce 2 million tonnes of methanol per year. Going forward, Arutmin and KPC are committed to developing the project to eventually produce 3.6 million tonnes of methanol in stages. The background to the project is Indonesia’s methanol requirement of 1.9 million tonnes in 2025. “Of which 68 percent is currently imported, or around 1.3 million tonnes. In 2025, in terms of foreign exchange, Indonesia spends US$400 million per year on methanol imports, equivalent to Rp7.1 trillion,” Rio said. For 2026, Rio added, with uncertain geopolitical conditions in the Middle East, methanol prices have risen significantly, subsequently affecting foreign exchange expenditure for importing methanol. “This is what underlies our choice of methanol products compared to other products that can be produced from coal gasification,” Rio stated. He is targeting the coal-to-methanol downstreaming project to enter the trial phase by 2029, before commencing commercial operations in 2030. “With this project, we can certainly save foreign exchange, and in this case, we can reduce the deficit for Indonesia,” Rio said. At the launch of the B50 Biodiesel Mandatory Programme at Km 57 Rest Area on the Jakarta-Cikampek Toll Road, Minister of Energy and Mineral Resources Bahlil Lahadalia stated that the government will build methanol industries in East Java and East Kalimantan to meet the needs of the B50 biodiesel programme. “We need methanol, just for B50, around 2.5 million tonnes per year. So, the next step is to encourage the immediate construction of methanol industries,” Bahlil said. In addition to increasing methanol demand, the B50 programme also raises the need for FAME from 14.9 million kilolitres under B40 to between 16.7 and 18 million kilolitres under B50, and increases CPO requirements from 13.6 million tonnes to between 15.2 and 16.3 million tonnes.