“Hilirisasi (downstream processing) is a key national development strategy,” said M. Fadhil Hasan, energy and downstream processing expert at the Task Force for Downstream Processing and Energy Resilience, in Samarinda on Wednesday.
The project aligns with President Prabowo Subianto’s Asta Cita 2 vision for energy self-sufficiency and addresses Indonesia’s heavy dependence on imported fossil fuels.
The East Kutai DME plant is designed to convert LPG usage, with the government targeting full substitution by 2040.
East Kalimantan, which produces 42.8 percent of the nation’s coal, will see a significant economic transformation through the project.
The task force has identified DME as one of 18 national priority projects, with an estimated investment of $10.25 billion (around Rp164 trillion).
Fadhil said the project could generate 34,800 jobs directly and indirectly.
Beyond DME, the coal downstream strategy will also produce methanol, which can be further processed into biodiesel, and synthetic graphite, a critical component for electric vehicle batteries.
Low-calorie lignite coal will be used to produce ammonia, with green ammonia positioned as a clean energy alternative.
“The East Kutai DME project, along with downstream palm oil initiatives in the Maloy Special Economic Zone, marks a shift in East Kalimantan’s economy from raw resource extraction toward higher-value industries,” Fadhil said.
Earlier, Energy and Mineral Resources Minister Bahlil Lahadalia tested two coal-to-Dimethyl Ether (DME) gasification technologies – one from China and another a South Korea-Europe joint technology.
“We are currently conducting feasibility studies with both technologies. One comes from China, the other is a Korea-Europe collaboration,” Bahlil said in Jakarta on Tuesday, October 28, 2025.
The results of these tests will determine which technology Indonesia will adopt.
Regarding domestic infrastructure readiness for the DME policy, Bahlil said there are no obstacles. Coal availability is also sufficient, as DME requires only low-calorie coal.
“Our coal reserves are abundant, and the technology has become much more efficient. This will make the project far more effective,” he added.
Bahlil noted that the coal-to-DME downstream project is one of 18 initiatives for which the National Task Force for Downstream Processing and Energy Resilience has completed concept designs and pre-feasibility studies.
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Translator: Ahmad R, Rahmad Nasution
Editor: Primayanti
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