DME Promoted as LPG Replacement, Key Notes from Observers

The development of coal-based Dimethyl Ether (DME) in Indonesia has come under scrutiny after several observers assessed that the project could potentially increase the national emission burden if not supported by additional technology.

This issue has emerged amid the government’s efforts to promote energy independence while meeting emission reduction targets towards Net Zero Emission (NZE).

The government is developing DME as part of coal downstreaming, relying on clean coal technology that is claimed to reduce emissions by 30-40% compared to direct combustion.

This policy is positioned as a strategic step to ensure the utilisation of domestic resources continues alongside the energy transition agenda.

However, energy observer from the University of Indonesia, Iwa Garniwa, believes that this approach is not yet sufficient to significantly reduce emissions. He emphasised the need for the implementation of Carbon Capture, Utilisation, and Storage (CCUS) technology so that DME development remains aligned with national emission reduction commitments.

“Without CCUS, the lifecycle emissions of coal-based DME are 20% higher than LPG. This contradicts the NDC (Nationally Determined Contribution) commitments,” said Iwa in a written statement on Wednesday, 6 May 2026.

CCUS itself is a technology that functions to capture carbon dioxide (CO2) emissions from industrial activities, then re-utilise or permanently store them to reduce greenhouse gas emissions.

Nevertheless, he said, its application is considered not straightforward because it impacts an increase in production costs.

Iwa mentioned that the use of CCUS could potentially raise capital expenditure (capex) by around 20% and operational expenditure (opex) by 15%. This condition poses a particular challenge in the implementation of the DME project in the field.

A more critical view was expressed by the Executive Director of the Indonesian Sustainable Welfare Foundation, Tata Mustasya. She assessed that even with technological interventions, DME still has the potential to produce higher emissions than LPG, both in terms of production and use.

According to her, the use of DME also does not immediately replace coal consumption in the power generation sector, so total emissions could increase from two sides at once, namely energy production and household consumption.

Meanwhile, oil and gas energy observer, Hadi Ismoyo, emphasised the importance of a comprehensive approach in calculating emissions. He suggested the “well-to-wheel” method, which accounts for the entire process from production to final use.