Logo of Phnom Penh Post newspaper Phnom Penh Post - Indonesia eye coal-to-methanol

Indonesia eye coal-to-methanol

Content image - Phnom Penh Post
Indonesian industry Minister Agus Gumiwang Kartasasmita attends the signing ceremony for an agreement between Powerindo Cipta Energy (PCE) and China National Chemical Engineering Corp to begin a feasibility study for a $560-million coal-to-methanol plant. INDONESIAN INDUSTRY MINISTRY

Indonesia eye coal-to-methanol

An Indonesian and a Chinese company have inked an agreement to begin a feasibility study for a coal-to-methanol plant worth $560 million.

The announcement comes as the Indonesian government is pushing for downstream development to get more value out of the country’s rich coal reserves.

The agreement was signed between Indonesia’s Powerindo Cipta Energy (PCE) and China National Chemical Engineering Corp, which have formed a consortium for the project.

The plant is to be located near a coal mine in Meulaboh, Aceh, processing 1.1 million tonnes of coal into 600,000 tonnes of methanol annually, around half of last year’s domestic demand for methanol, according to an industry ministry estimate.

“This project will [employ] 600 to 700 workers. According to the plan, the project will be in the construction phase in mid-2022,” industry minister Agus Gumiwang Kartasasmita, who attended the signing ceremony at his office, said in a statement on October 18.

The project is in line with the government’s intention to push coal gasification, as stated in the 2020 Job Creation Law and the 2020 revision of the Mining Law.

According to Agus, the regulations grant companies in the project incentives in the form of royalty exemptions, special coal pricing and mining business permit (IUP) facilitation.

Coal is one of Indonesia’s top commodities with reserves exceeding 38 billion tonnes, enough to support the country’s needs until 2091 with 600 million tonnes in annual consumption.

The commodity also tops the country’s exports with $25 billion worth of shipments in 2020, according to Statistics Indonesia, followed by palm oil at $20 billion.

However, the growing political pushback against coal has prompted policy changes in several countries to cut usage of the commodity for electricity production.

Funding for coal-fired power plants is also drying up, with China the most recent country to announce it would stop backing such projects.

In Indonesia, the government has reduced the role of coal in its latest long-term electricity procurement plan (RUPTL), with only 34 per cent of new power plant capacity to be coal-fuelled, down from 48 per cent.

Muhammad Khayam, director-general for chemical, pharmaceutical and textile industries at the ministry, said the new project would greatly increase the country’s methanol supply and reduce the need for imports.

“Methanol imports have been increasing each year due to rising industry demand and the biofuel programme,” Khayam said in the statement.



  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Cambodia purchases 4 million Molnupiravir tablets

    Cambodia has arranged for the purchase of four million US-made Molnupiravir pills – enough to treat 100,000 Covid-19 patients – even though the current rate of daily infections in Cambodia remains low. The medicine will be distributed to state hospitals, pharmacies and private clinics, according to the Samdech

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’

  • Cambodia planning new border checkpoint at Thma Da

    Cambodia is looking into the possibility of opening a new Thma Da Border Checkpoint with Thailand to boost trade and tourism. The Ministry of Public Works and Transport said on December 4 that Minister of Public Works and Transport Sun Chanthol led a technical working group

  • No more Africa travel ban but new rules for arrivals

    The Ministry of Health has decided to lift the ban on travellers from or who have travelled through 10 African countries and instead issued a set of standard operating procedures to manage passenger arrivals at Cambodia’s international airports. The 10 African countries are Botswana, Eswatini, Lesotho,