Indonesia Accelerates Coal Downstream Projects to Reduce Import

Diana Mariska
Joko Widodo in South Sumatra on Monday, January 24, 2022. (Photo: Presidential Secretariat Press Bureau)
Joko Widodo in South Sumatra on Monday, January 24, 2022. (Photo: Presidential Secretariat Press Bureau) - Indonesia President Joko Widodo has ordered his cabinet to push for timely and immediate realization of downstream projects, including for coal, as the government seeks to reduce import and save state budget.

Widodo said he has set a timeline for the completion of a number of coal downstream projects in Indonesia and expected all stakeholders, including ministries, to meet the target.

“There shouldn’t be any postponements, and we expect that once we complete [the project] here, we can immediately start at other locations,” he said on Monday, January 24, during a groundbreaking of a downstream facility that will turn coal into dimethyl ether (DME), as reported by Antara. The project is located in Muara Enim regency, South Sumatra, and is the fruit of collaboration between state-owned PT Bukit Asam and PT Pertamina and US-based chemical industry company Air Products.

Such downstream projects are expected to create more job opportunities and reduce Indonesia’s dependency on imported products.

According to the President, investment on one downstream project can create up to 14,000 new jobs, and he criticized state officials who still prefer to import products for domestic consumption.

“Some are very comfortable with import. It has become a routine to import, import, and import without considering that it actually creates loss to the country and the public due to lack of new job opportunities,” the former Jakarta mayor said.

Regarding the consumption of liquefied petroleum gas (LPG), Jokowi said Indonesia spends Rp80 trillion (US$5.7 billion) to import – from the total demand of Rp100 trillion. Furthermore, the government also needs to spend another Rp70 trillion for LPG subsidy due to the high price.

For that matter, the government sees it fit to optimize the gasification of coal, which is abundant in the country, into DME as a replacement of LPG.

It’s estimated that Rp70 trillion can be saved from state budget if LPG import is entirely stopped.

“This is our target. Besides improving our trade balance, stopping import can also improve our current account balance,” the President explained.

Tag # energy # coal # coal export # joko widodo # lpg # dimethyl ether (dme) # oil and gas # mineral

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