DME as Capital for Energy Sovereignty in Indonesia

In Indonesian households, the presence of LPG cylinders has become an integral part of daily routines, with many people simply ensuring the gas is available to keep the stove alight for cooking breakfast, boiling water, or preparing family meals. However, behind that blue flame lies a significant issue that is gradually becoming a serious challenge to national energy resilience. Indonesia currently remains heavily dependent on LPG imports. Of the total national requirement, around 80 per cent is still supplied from abroad, amounting to approximately 7.2 million tonnes per year. This figure reflects how Indonesian households are still profoundly influenced by global dynamics. When world energy prices fluctuate, geopolitical conflicts escalate, or distribution routes are disrupted, the impacts can be felt directly, even at the community level. Amid this situation, discussions on the development of dimethyl ether or DME are gaining attention as part of the national energy strategy in the long term. DME offers a different perspective on energy subsidies, particularly in relation to downstream coal projects into DME. Subsidies for DME cannot be viewed merely as a fiscal burden that drains the state budget. There is a broader dimension, namely how such subsidies can create domestic value added and strengthen national energy resilience. In this regard, the state is not only talking about short-term costs but also about the ability to build a more independent economic and energy foundation. To date, discussions on energy subsidies in Indonesia have often been trapped in numerical debates. The public tends to see subsidies solely as state expenditures that must be curbed to keep the state budget healthy. However, not all subsidies have the same impact. Subsidising imported goods certainly has a different effect compared to subsidising domestic industries that can create economic chains within the country. For instance, if subsidies are provided for DME produced from domestic resources, then the state’s money continues to circulate in Indonesia. The production activities involve national industries, domestic labour, transportation, and technology development. The economic effects do not stop at the final product but create a broader new economic circulation. On the other hand, Indonesia possesses vast reserves of low-rank coal, or low calorific value coal, which have not been optimally utilised thus far. There are even around 600 million tonnes of stranded coal with limited markets. In the context of the global energy transition, this type of coal is increasingly difficult to compete in international markets. Therefore, converting it into DME is seen as one way to utilise resources that were previously of low value.