Indonesia Advances DME Project Amid Coal Downstreaming Push

Government Plans Groundbreaking for Coal Gasification Project

The Indonesian government is moving forward with plans to develop a Dimethyl Ether (DME) project as part of its broader coal downstreaming initiative. The project, which involves gasifying coal to produce DME as a substitute for Liquefied Petroleum Gas (LPG), is expected to be among several high-priority initiatives undergoing groundbreaking in early 2026 ¹

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Source 3

https://industri.kontan.co.id/news/bukit-asam-ptba-tunggu-arahan-danantara-soal-proyek-hilirisasi-batubara-dme

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Project Details and Government Coordination

Minister of State Secretariat, Prasetyo Hadi, announced that six downstream projects are slated for groundbreaking between January and March 2026, with DME being one of them ¹

. The Energy and Mineral Resources Minister, Bahlil Lahadalia, is set to finalize project details with Danantara, the state-owned enterprise leading the initiative, within a month ⁴

Source 4

https://industri.kontan.co.id/news/proyek-dme-groundbreaking-februari-2026-bahlil-bahas-detail-dengan-danantara

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Industry Response and Feasibility Concerns

While government officials are pushing forward with the project, experts have raised concerns about its feasibility. Wijayanto Samirin, a public policy observer, expressed skepticism about the project's viability, citing financial infeasibility and the government's fiscal constraints ²

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Related Developments

The DME project is part of a larger effort to develop downstream industries in Indonesia. Other initiatives include waste-to-energy projects planned for 34 locations across the country ¹

. PT Bukit Asam (PTBA), a state-owned coal mining company, is awaiting further guidance from Danantara and MIND ID, the mining holding company, regarding its role in the DME project ³

Source 3

https://industri.kontan.co.id/news/bukit-asam-ptba-tunggu-arahan-danantara-soal-proyek-hilirisasi-batubara-dme

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