Gov’t Preparing Incentives for Coal Downstream Industries

President Joko Widodo

In a bid to boost competitiveness of Indonesia’s coal downstream industries and their economic values, the Government has announced it will provide incentives for those industries.

“The Government will provide many incentives so coal downstream industries can be more economical and more competitive,” Minister of Energy and Mineral Resources Arifin Tasrif said, Sunday (10/1).

According to the Minister, coal downstream industries are the Government’s main target in the future, with one of projects being carried out is gasification of low-calorie coal into Dimethyl Ether (DME) that will be used to substitute liquefied petroleum gas (LPG).

If we can further develop this gasification project, Arifin added, the Government will significantly slash the number of LPG imports as DME products can be a substitute for LPG.

Moreover, LPG imports from year to year continue to increase due to the increasing demand for LPG at home, he said.

“If we can substitute the LPG, we can secure quite a large amount of foreign exchange. The use of LPG every year continues to increase; yet, we actually have coal to produce DME as its substitute,” Arifin said.

In the meantime, during a limited cabinet meeting recently, President Joko “Jokowi” Widodo said that Indonesia must shift from being an exporting country for raw materials, one of which is coal, to becoming an industrial country capable of processing raw materials into semi-finished and finished goods.

According to the President, Indonesia must focus on developing coal-derived industries, starting from upgrading industry, manufacture of coal briquettes, manufacture of coke, coal liquefaction, coal gasification, to the coal-water mixture.

“I am confident that by developing this derivative industry, we will be able to increase the added value of commodities, reduce imports of raw materials needed by domestic industries, such as the steel industry (and) the petrochemical industry, and provide as many jobs as possible,” he said.

The President added that there are several priorities that can be made to increase coal added values, including the coal gasification program or coal to dimethyl ether (DME).

“Coal gasification will turn coal into syngas needed by petrochemical industries and dimethyl ether (DME) which is very important as a substitute for LPG. The gasification is expected to reduce our LPG imports,” the President said. (PR of Ministry of Energy and Mineral Resources/UN) (EST/EP)