Indonesia Taps Coal-to-Methanol Amid Global Oil Price Surge
Indonesia is promoting domestic energy resources to diversify its supply amid rising global oil prices. Deputy Energy and Mineral Resources Minister Yuliot Tanjung said the government is encouraging investment in coal-to-methanol projects in regions with large coal reserves.
The project, developed by Bumi Etam Chemical at the Batuta Chemical Industrial Park in East Kutai, East Kalimantan, is now under construction. The joint venture between Arutmin Indonesia and Kaltim Prima Coal covers about 943 hectares and is designed to produce 1.3 million metric tons of methanol annually from up to 7.78 million metric tons of coal.
The resulting methanol would not be used as gasoline but could serve as a fuel additive and as a feedstock for industries including petrochemicals and formaldehyde. It could also support the production of fatty acid methyl ester (FAME), a key component of biodiesel under the planned B50 program.
The project will not provide an immediate solution to Indonesia's energy needs, with commissioning expected in 2029. However, Yuliot said the coal-to-methanol project could save up to Rp7.1 trillion ($400 million) in foreign exchange annually by reducing some import requirements.