Indonesia's Coal Gasification Projects Remain Unrealised Despite Abundant Reserves

The Ministry of Investment and Downstreaming/BKPM has highlighted the lack of progress in coal gasification projects in Indonesia, despite the country’s abundant reserves. Deputy Minister for Investment and Downstreaming Todotua Pasaribu compared the national utilisation of coal with the achievements of other countries like China, emphasising the need for a change in strategy so that this natural resource wealth does not merely end up as primary energy or raw export commodities. “We have not yet realised even one ton of gasification. This is actually quite ironic, we now have a plan for DME, but actually if we look at the cycle, it’s coal to synthetic gas, synthetic gas to coal synthetic methanol,” Todotua said at the Mindialogue 2026 event in Jakarta, quoted on Thursday (13/8/2026). Todotua explained that China annually consumes 4.4 billion tons of coal, of which around 30-35% is processed through gasification. In comparison, the implementation of gasification in Indonesia to produce derivative products such as methanol and Dimethyl Ether (DME) has not yet been realised. “Methanol comes from gas, okay, hopefully we can accelerate gas production in Masela. But we have coal that we can gasify, which is why we are very supportive when our colleagues at Bukit Asam (PTBA) brought forward the concept proposal for coal to synthetic gas,” he added. According to him, coal downstreaming is very strategic to reduce the national energy import burden, especially for methanol, whose demand is currently increasing. By mastering independent processing technology, Indonesia is expected to be able to control its own energy consumption cost structure. “The main context, in my opinion, is to reduce our own cost demand for consumption. Why? Because if we import too much, the cost control depends on the producing country,” he stressed. Based on the Handbook of Energy and Economic Statistics of Indonesia 2025 released by the Ministry of Energy and Mineral Resources, Indonesia’s total coal reserves as of December 2024 were recorded at 31.95 billion tons. As is known, President Prabowo Subianto on Wednesday, 29 April 2026, inaugurated the start of construction or groundbreaking for 13 phase II downstream projects with a total investment value of Rp 116 trillion in Cilacap, Central Java. One of the inaugurated projects is the coal downstreaming project into Dimethyl Ether (DME) in Tanjung Enim, South Sumatra. This DME project is being jointly developed by three State-Owned Enterprises (BUMN), namely the mining holding company MIND ID, PT Bukit Asam Tbk (PTBA), and PT Pertamina (Persero). The project will process 7 million tons of coal into 1.4 million tons of DME, equivalent to 1 million tons of LPG per year. This means the coal-to-DME downstream project will contribute to reducing LPG imports by approximately 1 million tons per year. As is known, Indonesia currently still imports around 1 million tons of LPG annually. The DME product will later be absorbed by Pertamina through Pertamina Patra Niaga. This facility will utilise low-rank coal, which has not been optimally utilised so far, while its availability in Indonesia is quite abundant.