{"id":74603,"date":"2022-01-12T09:24:44","date_gmt":"2022-01-12T09:24:44","guid":{"rendered":"https:\/\/chinadialogue.net\/?p=74603"},"modified":"2022-01-12T09:26:07","modified_gmt":"2022-01-12T09:26:07","slug":"indonesias-coal-gasification-plans-move-forward-despite-coal-pledge","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/indonesias-coal-gasification-plans-move-forward-despite-coal-pledge\/","title":{"rendered":"Indonesia\u2019s coal gasification plans move forward, despite coal pledge"},"content":{"rendered":"\n

Indonesia\u2019s plans<\/a> to build a new national coal gasification industry, converting its abundant coal resources into methanol and dimethyl ether, are moving forward after two deals were announced late last year.<\/p>\n\n\n\n

In October, Indonesia\u2019s Powerindo Cipta Energy and China\u2019s state-owned China National Chemical Engineering Corporation signed<\/a> an agreement to begin a feasibility study into building a US$560 million coal-to-methanol plant.<\/p>\n\n\n\n

Then, in November, just days after the COP26 Climate Change Conference, Air Products<\/a> announced a plan to invest $13-15 billion<\/a> into several gasification projects with support from the Indonesian government. The US-based company is a leading provider of gasification technology, including to China<\/a>.<\/p>\n\n\n\n

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Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

\u201cHost countries play an underappreciated role in determining the types of projects that are developed with support from Chinese partners,\u201d said Cecilia Han Springer, a senior researcher at the Boston University Global Development Policy Center. \u201cIndonesian companies and policymakers are still seeking ways to capitalise on domestic coal resources and will continue to do so until incentives favour renewable energy development instead.\u201d<\/p>\n\n\n\n

The agreements may entrench the use of coal and result in higher greenhouse gas emissions and other environmental impacts. They are \u201cvery unfortunate for tackling climate issues,\u201d said Andri Prasetyo, a programme manager at Trend Asia, a Jakarta-based environment and energy NGO. \u201cWe need to divest from all coal projects, including downstream coal gasification.\u201d<\/p>\n\n\n\n

Propping up domestic coal<\/h2>\n\n\n\n

Indonesia is the world\u2019s largest exporter of thermal coal<\/a>, selling to China, Japan, Vietnam, and India. As other countries shift away from coal-fired power, Indonesia has been shoring up demand. Since 2010 it has built 22.7 GW of coal-fired power capacity, behind China (493 GW) and India (193 GW), according to data<\/a> from Global Energy Monitor. The country is now dealing with excess coal power<\/a>, so the government wants to revive a centuries-old technology to grow domestic demand.<\/p>\n\n\n\n

Currently, a few coal-rich countries use gasification, such as South Africa and China. There are over 150 coal-to-chemical facilities<\/a> in China, mostly converting coal to coke, fertiliser or oleo-chemicals. The industry has grown notably since 2013, as local governments pushed the technology to meet increasing demand for natural gas and reduce dependence on imports of chemicals, according to a report<\/a> from the Wilson Center.<\/p>\n\n\n\n

\"Lu'an<\/div>
The Lu\u2019an coal-to-oil project in Changzhi, Shanxi province uses coal gasification to create synthetic oil and petroleum products (Image: Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

International investments could prolong Indonesia\u2019s use of coal, despite Indonesia signing a pledge<\/a> at COP26 to shift away from generating electricity using coal by 2040. There is no mention of gasification in the pledge.<\/p>\n\n\n\n

\u201cIt\u2019s an empty commitment because [Indonesia] is still looking for other ways to use coal,\u201d said Andri. \u201cEven if coal plants will be retired, gasification will still consume a lot of coal for 10 or 20 years.\u201d<\/p>\n\n\n\n

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Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

By building local demand through coal-to-methanol plants, Indonesia aims to replace imported natural gas with domestic coal-based gas. The gas would mainly supply industry, but its use could later expand into transportation. Indonesia is already the world\u2019s fifth-<\/a>largest emitter<\/a> of greenhouse gases, according to Climate Watch. Its development of a coal gasification industry could hinder progress towards the country\u2019s climate goals, which Climate Action Tracker already rates as \u201chighly insufficient\u201d.<\/p>\n\n\n\n

Limitations of coal pledge<\/h2>\n\n\n\n

When China pledged<\/a> in late September last year to stop financing new overseas coal plants and \u201cstep up support for … developing green and low-carbon energy\u201d, it looked like Indonesia would be heavily impacted. Southeast Asia\u2019s largest nation is among the foremost builders<\/a> of coal-fired power plants globally, in part thanks to more than $15 billion in backing from China\u2019s institutions. There was hope that the pledge would lead to greater Chinese investment in renewable energies<\/a>, including in Southeast Asia. However, China\u2018s gasification investment could be a warning that coal will still have a role outside of coal-fired power.<\/p>\n\n\n\n

\u201cThe significance and impact of [China\u2019s] pledge will largely hinge on whether that foregone coal support is instead channelled to renewable energy,\u201d said Springer. \u201cIf that foregone support is instead directed to finding other ways to use coal, then the pledge will be disappointing indeed.\u201d<\/p>\n\n\n\n

The impact of China\u2019s pledge will largely hinge on whether that foregone coal support is instead channelled to renewable energy<\/blockquote>Cecilia Han Springer, Boston University Global Development Policy Center<\/cite><\/div><\/div>\n\n\n\n

\u201cI don\u2019t think it was a deliberate loophole, but it does leave projects like this coal-to-methanol plant in a grey area,\u201d added Springer.<\/p>\n\n\n\n

From a climate perspective, there\u2019s little difference between coal-fired power plants and coal gasification as both increase greenhouse gas emissions beyond what is compatible with the Paris Agreement. But both China\u2019s September pledge and Indonesia\u2019s at COP26 focus on coal-fired electricity generation, ignoring coal-to-gas. This omission could, Andri fears, lead to a wave of new coal gasification investments by China, Indonesia\u2019s primary foreign investor, which may cast a shadow on the climate benefit of China\u2019s coal pledge.<\/p>\n","protected":false},"excerpt":{"rendered":"

International companies are developing projects in Indonesia to convert its rich coal deposits into new fuels<\/p>\n","protected":false},"author":3513,"featured_media":74609,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[757],"tags":[513,520,17073],"hashtags":[],"country":[20000110,50040717],"class_list":["post-74603","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-carbon-emissions","tag-coal","tag-energy-transition","country-china","country-indonesia"],"acf":[],"yoast_head":"\nIndonesia\u2019s coal gasification plans move forward, despite coal pledge | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"International companies are developing projects in Indonesia to convert its rich coal deposits into new fuels\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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