Gasifying palm residues: Helping Indonesia go renewable

(Versi bahasa Indonesia di sini.)

Pertamina, the Indonesian state-owned energy company with a long history working in the oil and gas sector, has its eye on another fossil fuel: coal. But, why coal, and why now? Coal can be converted to other gaseous and liquid fuels, such as dimethyl ether (DME), a clean, colorless gas similar to liquefied petroleum gas (LPG) which can be used in blends of up to 30% in cooking stoves without any need to make changes to the stove’s hardware. DME is already being used as a substitute fuel for LPG in households in China. However, there is an alternative to using coal that would allow Indonesia to lessen its reliance on imports and meet its renewable energy goals.

Pertamina is likely looking to invest in DME production as a substitute for imported LPG due to the latter’s prominence in the downstream Indonesian energy market. Over the past five years, national LPG consumption increased an average of 5.3% annually. In 2018, a survey of nearly 70,000 Indonesian households showed that 77% use LPG for cooking, and, in 2019, domestic sales of LPG were recorded at 7.31 million MT. Around 74% of LPG is imported from Singapore, Australia, Malaysia, and several countries in the Middle East. By developing coal gasification to produce DME, Indonesia can reduce its LPG imports and thus help reduce its trade deficit. Pertamina plans to invest USD $2.5 billion to build 4 DME plants and, together with the state-owned mining enterprise PT Bukit Asam, have partnered with US-owned Air Products and Chemicals, Inc for the project.

Pertamina plans to produce DME through a process called gasification, which researchers began investigating in World War II in an attempt to use hardwood as fuel for vehicles. As a previous ICCT paper explained in more detail, in the presence of oxygen, but less than what is needed for combustion, gasification converts coal, biomass, or organic wastes to syngas, a mix of hydrogen, carbon monoxide and carbon dioxide. Syngas can be combusted for electrical power generation or used to make liquid and gaseous hydrocarbon fuels, such as methane, diesel, and ethanol. For the syngas to become DME, it first must be converted into methanol in the presence of a catalyst. Then, in the presence of a different catalyst, it undergoes a subsequent process called methanol dehydration to become DME.

Due to Indonesia’s robust palm oil industry, there is an abundant supply of palm oil residues, such as palm trunks, empty fruit bunches, palm kernel shells, palm fiber, and oil palm fronds, to produce DME. The use of these feedstocks for gasification is a good choice, since most of the palm oil residues aren’t currently used, and it would help to achieve the government’s ambition to reduce the trade deficit by producing DME from domestic resources instead of importing LPG.

The figure below shows the difference in greenhouse gas emissions between producing DME from coal or forestry residues, which are close to palm residues in terms of climate impact. As shown, DME from coal is around 20 times more carbon-intensive than DME from palm residues. Thus, using palm residues instead of coal to produce DME would help Indonesia achieve its General National Energy Plan target of 23% renewable energy by 2025. As of early 2020, the Ministry of Energy and Mineral Resources (MEMR) estimates the current renewable energy share is only 12.4%, far behind this target, and the Indonesian Renewable Energy Society (METI) predicts that Indonesia will likely not reach the target by 2025. Therefore, there is a unique opportunity for Indonesia to meet its renewable energy target in limited time by supporting the development of the gasification of palm residues. In addition, biomass-derived DME could help Indonesia meet its climate change Paris Agreement target of a 29% reduction below business-as-usual (BAU) by 2030.

Researchers from the Institut Teknologi Bandung (ITB) reported that 39.3% of the available biomass in Indonesia is palm oil residues. An ICCT paper estimates there are 34 million dry metric tons of total palm oil residues available in Indonesia per year, and around 32% of these residues can be removed without negative impacts on soil quality or palm yields and it can be used for the gasification process.

Gasification of biomass can occur either in stand-alone facilities or it can be co-fed with coal. As shown in the above figure, there is a large difference in greenhouse gas emissions when you produce DME vs. palm residues. So even blending palm residues with coal could be another option for Pertamina- a 50/50 blend rate of coal and palm residues would still split the carbon intensity of the DME in half.

It is true that coal is a cheap option for gasification, and it has a high calorific value and syngas conversion efficiencies. However, coal is also a carbon-intensive fossil fuel. As a great alternative to coal, Indonesia could instead make use of its abundant palm oil residues as gasification feedstocks. Not only are palm oil residues a sustainable and environmental-friendly feedstock, but their use for gasification to produce DME will help Indonesia increase its renewable energy share and meet the NDC reduction target.

Alternative fuels