Guwahati: Indonesian President Joko Widodo broke ground on a US$2.3 billion coal gasification facility in an effort to reduce the country’s liquefied petroleum gas (LPG) imports while maximizing the country’s coal resources.
According to state coal miner Bukit Asam, which is building the plant in partnership with US firm Air Products and Chemicals, the plant is designed to use 6 million tonnes of low-rank coal to produce 1.4 tonnes of dimethyl ether (DME) annually, which can reduce Indonesia’s LPG imports by 1 million tonnes per year.
Indonesia is looking to its own resources to enhance energy supply, but there are concerns that significant reliance on dirty coal, which is already the country’s main source of electricity generation, could raise the country’s greenhouse gas emissions.
Indonesia has committed to achieving net-zero emissions by 2060 and is seeking assistance from wealthier countries to attain this objective in order to combat climate change.
According to government data, Indonesia utilized 7.95 million tonnes of LPG in 2021, with 6.4 million tonnes imported.
“We can cut a subsidy from the state budget by roughly 7 trillion rupiah (S$656.5 million) while improving our trade balance and current account deficit,” Jokowi, the president, said.
In the 2022 budget, Indonesia set up 66.3 trillion rupiah to subsidise some household LPG consumption.