Coal Downstreaming through Coal Gasification

What is coal gasification?

Coal gasification is the process of converting solid coal into synthetic gas (syngas) which consists of carbon monoxide (CO), hydrogen (H₂), methane (CH₄), and carbon dioxide (CO₂). This conversion process is generally carried out through a thermochemical reaction between coal and a gasification agent such as oxygen, water vapor or air under limited conditions. ​

Coal gasification aims to break down the carbon structure of coal in a thermochemical process into gas that can be used in various ways, including the production of electrical energy, raw materials for the chemical industry, and the production of synthetic fuels.

The urgency of coal gasification in Indonesia

In 2023, Indonesia has coal reserves of 31.7 billion tonnes with production reaching 775.2 million tonnes, exceeding the target of 694.5 million tonnes. Coal remains the main energy source, contributing 40.46% to the national energy mix, indicating that this energy source is still the main support for energy needs in Indonesia.

With this abundant availability, this resource can be expanded into other forms. This resource can be downstream through gasification to increase domestic added value, especially for low-calorie coal which is difficult to sell so that it becomes a high-value product. Gasification generally has a higher energy efficiency value than direct combustion in PLTUs.

Apart from that, Indonesia is still facing an energy deficit in LPG, most of which is imported. DME, which has similar properties to LPG, can be an alternative through coal gasification, especially low-calorie coal which is abundant in Indonesia, thereby helping reduce dependence on LPG imports.

Coal Gasification into DME

The conversion of coal into synthesis gas (syngas) and then converted into DME aims to produce alternative fuel Liquefied Petroleum Gas (LPG). Based on the flow diagram above, there are several conversion stages:

1. Coal Gasification

At high temperature and pressure, coal is reacted with a gasification agent (water vapor) to produce synthetic gas (syngas) which consists of carbon monoxide (CO) and hydrogen (H₂).

2. Syngas Cleaning

Synthetic gas (syngas) that is formed contains impurities such as sulfur and solid particles so it must be cleaned to prevent damage to the catalyst and equipment in the next process

3. Synthesis of DME

Synthetic gas (syngas) that has been cleaned will be converted into DME via two main methods, namely:​

• Indirect Method : This method involves two processes, namely synthetic gas is converted first into methanol using a copper catalyst, then the methanol is dehydrated into DME using an acid catalyst
• Direct Method : This method involves one process, namely synthetic gas is directly converted into DME in one reaction stage using a bifunctional catalyst that combines the functions of copper and acid catalysts.​

Long term plans and goals of coal gasification in Indonesia

The government is encouraging the downstreaming of coal through gasification to increase the added value of this resource. The DME gasification project is targeted to operate by the end of 2027, with a processing capacity of 6 million tons of coal per year to produce 1.4 million tons of DME. This DME is expected to replace 1 million tonnes of LPG imports and save foreign exchange of IDR 9.1 trillion per year. Realization of this project requires an investment of USD 2.1 billion.

Economic challenges are still the main concern in coal downstreaming. The instability of coal prices and the high production costs of DME compared to LPG imports raise doubts about the financial feasibility of this project. Apart from that, the limited mastery of gasification technology in the country further complicates its implementation.

To support downstreaming, the government is considering incentives such as reducing coal royalties to 0% as well as special price regulations for gasification. In addition, regulations regarding the supply and price of DME are being drafted. Meanwhile, Indonesia remains committed to reducing the use of fossil fuels with plans to stop PLTUs in the next 15 years as a step towards clean energy.