PTBA Proposes BACBIE as Special Economic Zone, Seeks Incentives for Coal-to-DME Project
Fri 07 Aug 2026, 17:14 PM
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PT Bukit Asam (Persero) Tbk, or PTBA, has proposed the Bukit Asam Coal Based Industrial Estate (BACBIE) to be designated as a special economic zone (SEZ). BACBIE is also the site where the Company’s coal-to-dimethyl ether (DME) gasification project will be built.
PTBA Vice President of Downstreaming Dahlia Muchtar said the Company proposed BACBIE as an SEZ partly so that all business activities operating in the area can receive special SEZ incentives.
“As for the SEZ, it is currently in the application stage, because it is still an industrial estate. The SEZ application is to support coal downstreaming,” Dahlia said when met in South Jakarta on Thursday (Aug. 6, 2026).
Dahlia said one of the incentives expected, including for the DME project, is a tax exemption or tax holiday.
“Yes, such as a tax holiday, what it will look like. Of course, there will be many goods coming from overseas. That is why we are building BACBIE to support that,” she stressed.
DME Partner
On the occasion, Dahlia said investment partners for the DME project could come from China or the United States (US), with the investment partner to be selected by BPI Danantara.
Dahlia stressed that potential partners for the coal downstreaming project remain open, meaning there is potential for partners from other countries to participate in developing the project.
However, she stressed that the selection of the partner will be under Danantara’s authority.
“There are (potential partners) from the US, and there are from China. So we are still open. Everything remains open; this is currently in the selection stage by Danantara,” Dahlia stressed.
For the record, the flagship coal-to-DME downstreaming project had previously failed during the administration of President Joko Widodo. US investor Air Products & Chemicals Inc. (APCI) withdrew from the coal-to-DME project initiated by PTBA in 2023.
At the time, the coal-to-DME gasification project was planned to operate for 20 years in the BACBIE area, located at the Tanjung Enim coal mine mouth in South Sumatra. BACBIE was to be located at the same site as the Sumsel 8 Mine Mouth Power Plant.
Subsequently, the Energy and Mineral Resources Ministry (ESDM) planned to add new incentives to boost investment in coal downstreaming following the withdrawal of the US investor.
The government prepared three coal gasification incentives. First, a 0% royalty specifically for coal processed or converted through gasification. Thermal coal, meanwhile, would remain subject to the applicable royalty rates.
Second, an incentive in the form of special coal price arrangements to increase added value or for gasification processes carried out at the mine mouth.
Third, an incentive concerning the validity period of coal mining business permits (IUP), which would be granted in accordance with the economic life of the coal gasification industry.
For information, PTBA is targeting the coal-to-DME gasification project in Tanjung Enim, South Sumatra, to be completed by 2030, following its groundbreaking on Wednesday (April 29, 2026).
PTBA Director of Downstreaming and Product Diversification Turino Yulianto said the investment plan for the coal downstreaming project is being finalized by Danantara.
He also confirmed that the project will be developed together with a technology partner, but said he could not disclose the prospective investor as the approach process is still ongoing.
The project is targeted for completion in 2030. The investment is being finalized by Danantara. The technology partner is currently in the selection process. It cannot yet be announced,” Turino told Bloomberg Technoz on Tuesday (May 5, 2026).
Turino said the prospective technology partners come from several countries, but he declined to provide details on which technology would be used for the DME project in Indonesia.
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