The Ministry of Energy and Mineral Resources (ESDM) explained the main reasons for a petrochemical company from the United States (US), namely Air Products and Chemicals Inc. who left from coal downstream projects in Indonesia. The proud project of Indonesian President Joko Widodo (Jokowi) which is included in the National Strategic Project (PSN) is actually needed to replace the role of Liquefied Petroleum Gas (LPG), which so far is still mostly imported. As is known, Air Products built a consortium together with two Indonesian state-owned companies, namely PT Bukit Asam Tbk (PTBA) and also PT Pertamina (Persero). Acting Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, Idris Sihite, explained that the reason for Air Products leaving the consortium for downstream coal to Dimethyl Ether (DME) in Indonesia was because the company would focus on developing blue hydrogen or blue hydrogen. "Yesterday they (Air Products) asked to resign because of nothing, they prefer, from the letter yes, in another direction, blue hydrogen," Idris said when met at the Ministry of Energy and Mineral Resources Building, quoted Monday (16/2/2023).
Furthermore, Idris explained that Air Products chose to focus on the development of blue hydrogen through his statement. Idris said the United States government gave greater incentives to companies to process blue hydrogen. "Because the government gives them greater incentives," he added. Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif opened his voice regarding Air Products' withdrawal from the coal downstream project in Indonesia. According to Arifin, Air Products' decision to no longer continue the coal downstream cooperation project in Indonesia was due to several considerations. One of them is that business development in America is more attractive than in Indonesia. "Yesterday Air Products because he felt that in America it was more interesting for him to do business there," said Arifin when met at the Ministry of Energy and Mineral Resources Building, Friday (17/3/2023).
In addition, the United States government also has an attractive offer in the form of subsidies. Primarily for the development of new and renewable energy (EBT) projects. "In America, with subsidies for EBT, there are more attractive projects there for hydrogen because America is pushing for its use," he said. As is well known, Air Products chose to leave two of RI's coal gasification projects. The two projects are the DME project with PTBA and Pertamina, and also the coal-to-ethanol gasification project with Bakrie Group companies, namely PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia. In addition, PTBA as one of the partners has prepared a special economic zone covering an area of 585 hectares and coal reserves for 20 years with a utilization of 6 million tons of coal per year. Previously, the Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan responded to Air Products' coal downstream project.
Luhut said, currently the government is holding important discussions regarding the continuation of the Indonesian coal downstream program. "I think there are still some technical (discussions) that need to be completed. We'll see later (regarding the replacement)," Luhut said when met in Jakarta, Tuesday (14/3/2023). Meanwhile, the Chairman of the Indonesian Mining & Energy Forum (IMEF) Singgih Widagdo admitted that he was quite surprised by Air Products' decision to leave the coal downstream cooperation project. Bearing in mind, the President himself has received visits from the Chairman and CEO of Air Products some time ago. "Obviously this affects the map set by the government for LPG substitution in the future. This has been included by the Minister as a national green energy," Singgih said at the CNBC Indonesia Closing Bell event, quoted on Thursday (16/3/2023).
Therefore, Singgih assesses that if Air Products does withdraw, then the government must prepare the next step. How to ensure that the DME project which is predicted to be a substitute for LPG gas can run again. According to Singgih, the coal downstream project basically requires a sizable investment. Therefore, the government is quite fair that this project is assigned to large companies holding Coal Mining Concession Work Agreements (PKP2B) (PKP2B) which have changed to Special Mining Business Permits (IUPK). "Initially, the government stipulated that a 0% royalty was set for DME volume and then a special price. However, is this enough, this is what is interesting because with the existing conditions, especially whether the DME cost meets imported LPG, this is interesting. In my opinion, we are not limited to seeing how aspects of coal royalty or price. We view this as a new project for the chemical industry, so fiscal and non-fiscal must be placed there," he said
