Economic Feasibility of Dimethyl Ether from Oil Palm Empty Fruit Bunch as a Substitute for LPG in Indonesia

Abstract

Oil palm empty fruit bunch (OPEFB) can be utilized as a feedstock for dimethyl ether (DME) production through the gasification route. DME has similar characteristics to liquefied petroleum gas (LPG). Therefore, it can be used as a substitute for LPG. Some research has been conducted on DME as a substitute for LPG from various aspects. However, little research was focused on the economic study of OPEFB-based DME as an LPG substitute and its contribution towards saving the LPG import budget. This study aims to find DME plant feasibility, and to assess its contribution to the LPG import budget reduction, especially in the Kalimantan region. The DME price at the depot is calculated based on the ex-factory price of DME, transportation cost, and depot fee. The OPEFB-based DME plant capacity is 994 t day-1 OPEFB, which produces 192 t day-1 DME. From an economic perspective, the net present value (NPV), internal rate of return (IRR), and payback period (PP) are USD 93.1 million, 17%, and 10 years, respectively, based on 30 years of plant life and USD 185.4 million investment. Only 57% of the DME-LPG mix can be distributed to fulfill Kalimantan region demand per year, while the savings on the import budget is USD 5.81 million y-1. The OPEFB-based DME plant capacity and capital expenditure (CAPEX) are the most sensitive to perturbance, whereas OPEFB feed price is the least sensitive.

Narrative Policy Analysis: Utilization of Dimethyl Ether as an LPG Mixed Fuel (Case Study in Indonesia)

“…Several researchers have conducted studies regarding the use of DME as fuel. Zhang et al (2020), Heryadi et al (2023), Kusnandar et al (2020), and Anggraini et al (2013) said that DME can be used as a fuel or as a mixed LPG fuel. Masudi et al (2020)…”

The potential of bio-DME from oil palm empty fruit bunch in the Kalimantan region

“…Further, no studies are exploring the potential of bio-DME from OPEFB in the Kalimantan region. There are various studies about using OPEFB as raw material for bio-DME and other chemical production in Indonesia, but mostly related to the conversion of OPEFB into bio-DME, process simulation, state of the arts, and economic analysis [1, 21,[23][24][25][26]. A specific study that discusses the potential of bio-DME in a particular region in Indonesia, especially in Kalimantan, has never been discussed; therefore, this study aims to explore the potential of OPEFB-based bio-DME in the Kalimantan region.…”