Prospect of Coal Gasification in Indonesia

The Indonesian government has made policy of coal gasification project in Indonesia. This policy is expressed in Presidential Regulation Number 109 of 2020 concerning the “Third Amendment to Presidential Regulation Number 3 of 2016 concerning the Acceleration of National Strategic Project Implementation”. Coal gasification project becomes one of about 201 national strategic projects launched by the Indonesian government. The project’s location is in Tanjung Enim, South Sumatera. Coal gasification is a coal reaction process using air or oxygen and vapor to produce gas product that may be directly used as fuel, or as feed for synthetic fuel (syngas) or any other gas or liquid chemicals. Below is the diagram explaining the route of coal changing into syngas products through coal gasification process.

Image of Coal Route to Chemical Substance through Gasification Process Source: https://upload.wikimedia.org/wikipedia/commons/9/9e/Coal_to_chemicals_routes_diagram.jpg

From the diagram above, we can find that one of the coal gasification products is Methanol, which may be changed into DME (Dimethyl Ether). DME is a material to make LPG (Liquefied Petroleum Gas). This is in line with the coal gasification program in Indonesia which aims at improving coal’s added value and reducing the dependence on LPG import. Coal gasification is actually an incomplete form of coal combustion, while the physical and chemical processes are like coal combustion process in general. However, the pollutant formation process is different from that in coal combustion. The difference is that in reduction condition, the sulfur contained in coal will mostly be changed into H2S instead of SO2 and the nitrogen will be changed into NH3 and there is almost no NO formed. Therefore, the coal gasification technology is categorized into a clean coal technology. According to various researches, low rank coal (low calorie) has gasification reactivity a hundred times bigger than the reactivity of high rank coal (high calorie), since low rank coal shows more active coal location because of the crystal’s small size. Low rank coal also has bigger porosity, which will certainly support accessibility to reacting gas. The calcium content in its ash also gives catalytic effect that may improve gasification reactivity. With the low rank coal’s characteristics, a reactor chamber with higher speed may also be used. It will lead to lower cost of capital in the gasification.

Indonesian Coal Resource and Reserves Quality Data Table in 2018 Source: Neraca Sumber Daya Tahun 2018, Pusat Sumber Daya Geologi Kementerian ESDM

From the perspective of Indonesia’s coal resource and reserve, we may state that Indonesia has very big potential for gasification project, since Indonesia’s coal resource and reserve value is quite high. Data show that the total resource and reserve in 2019 are respectively 149,009.59 million tons and 25,070.50 million tons. Indonesia’s coal resource and reserve are mostly dominated by low to medium rank coal. With the coal gasification project, the Indonesian Government expects an increase in coal’s added value, thus Indonesia will no longer sell raw low rank coal abroad that certainly of lower economic value than DME. In addition, with gasification, Indonesia is expected to produce its own LPG and reduce its dependence on LPG import and maintain the national energy resilience.

In this gasification project, the Indonesian Government focuses on coal mining companies that hold PKP2B of the first generation. The companies are PT Berau Coal, PT Arutmin Indonesia, PT Adaro Indonesia, PT Indominco Mandiri, PT Kaltim Prima Coal, PT Kendilo Coal, PT Kideco Jaya Agung and PT Multi Harapan Utama. Pertamina and PT Bukit Asam (PTBA) Tanjung Enim & Air Products are currently cooperating on one of the coal gasification projects. The project is deemed relatively economic since PTBA will supply low calorie coal at affordable price. However, the physical working stage will just start from 2023 to 2024, since it first needs financial, technical and non-technical review, utilization guidelines and regulation of coal gasification operation. In support of a downstream coal climate in Indonesia, besides making policy with Presidential Regulation Number 109 of 2020, the Indonesian government also gives incentive in the form of 0% coal royalty to business players that increase their coal’s added value. For example, as contained in article 128A paragraph 2 Law Number 11 of 2020 concerning Job Creation. With this, it is expected that coal gasification projects in Indonesia will run as expected and contribute to Indonesian advancement. Go, mining for development!

Reference: Badan Geologi Kementerian ESDM. (2019). Neraca Sumber Daya Dan Cadangan Batubara Indonesia 2019. Bandung: Pusat Sumber Daya Mineral, Batubara Dan Panas Bumi Direktorat Jenderal Minyak dan Gas Bumi. (2020, Februari 1). Kurangi Impor LPG, Gasifikasi Batubara Jadi Kebijakan Strategis. Diakses dari https://migas.esdm.go.id/post/read/kurangi-impor-lpg-gasifikasi-batubara-jadi-kebijakan-strategis Kementerian ESDM. (2019). Handbook of Energy & Economic Statistics of Indonesia. Jakarta: Penerbit. ISSN 2528-3464 Presiden Republik Indonesia. (2020). Peraturan Presiden Republik Indonesia Nomor 109 Tahun 2020 tentang Perubahan Ketiga atas Peraturan Presiden Nomor 3 Tahun 2016 tentang Percepatan Pelaksanaan Proyek Strategis Nasional. LN.2020/No.259, jdih.setkab.go.id Umah, Anisatul. (2020, Desember 2015). Gasifikasi Batu Bara Jalan, Pemerintah Bakal Kasih Subsidi. CNBC Indonesia. Diakses dari https://www.cnbcindonesia.com/news/20201215171047-4-209313/gasifikasi-batu-bara-jalan-pemerintah-bakal-kasih-subsidi Vamvuka, D. (1999). Gasification of Coal. Energy Exploration & Exploitation, 17(6), 515–581. https://doi. org/10.1177/014459879901700603