Source: Bisnis.com | October 20, 2025

The Indonesian Mining Association (IMA) assesses that coal downstream projects, including the development of dimethyl ether (DME) as a substitute for LPG, still face significant challenges in terms of economics and regulatory certainty.

IMA Executive Director Hendra Sinadia stated that many factors influence the economic feasibility of coal downstream projects.

“Coal downstream projects are still hampered by economic aspects, which are influenced by many factors, including expensive technology, collaboration with off-takers, the selling price of downstream coal products, financing, and others,” Hendra told Bisnis on Monday (October 20, 2025).

Hendra added that regulatory certainty is key to attracting long-term investment in the sector. Furthermore, stable regulatory certainty and assurance are also considered crucial to supporting long-term investment.

Nevertheless, he appreciated the government’s steps in providing fiscal incentives to accelerate coal downstreaming, such as 0% royalties for DME projects.

“The government has issued several incentives that deserve appreciation. However, returning to the first point, the economic aspect is influenced by many factors. The government certainly understands this issue,” he said.

Furthermore, Hendra highlighted the government’s plan to prepare non-fiscal incentives through the establishment of Special Economic Zones (SEZs) to attract more investors in the downstream sector.

“Incentives in the form of SEZs certainly deserve appreciation because they are considered to be able to attract investment in projects that can absorb coal processing products and encourage coal downstream projects,” he explained.

However, he emphasized that the success of DME projects and other forms of downstreaming depends not only on incentives, but also on cross-sector coordination and consistent policy support.

“But of course, many other factors are equally important,” he concluded.

Previously, Siti Sumilah Rita Susilawati, Secretary of the Directorate General of Mineral and Coal (Minerba) of the Ministry of Energy and Mineral Resources, stated that additional incentives to boost DME projects were still under review.

“To date, there are no new regulations specifically regulating additional incentives for DME projects, other than the previously established 0% coal royalty for the volume used in DME production,” Rita told Bisnis on Monday (October 20, 2025). She also mentioned the possibility of providing non-fiscal incentives through the establishment of special economic zones (SEZs). According to Rita, this stimulus is targeted to attract more investment.