Bio Friends plans $12 million DME plant in Indonesia with 2028 production target
Bio Friends and its Indonesian partners plan to develop a $12 million dimethyl ether plant in Sidoarjo, East Java. The facility is designed to produce 10,000 tonnes annually from 2028, with a larger CCU-based fuel project also under discussion.
Partners set out $12 million clean-fuel project
Bio Friends Inc. has signed an investment agreement with Indonesian partners to develop a dimethyl ether plant in Sidoarjo, East Java, marking the South Korean company’s planned entry into Indonesia’s clean-fuel market. Media Indonesia reported that the agreement was signed at Bio Friends’ DME production plant in Boeun, North Chungcheong Province, South Korea.
The project will be implemented through PT Bio Friends Indonesia, the group’s local subsidiary, together with existing partner PT Arasy Energi Indonesia and PT Dimethyl Ether Nusantara, a newly established subsidiary of Indonesian investment company NEI. The planned plant will have annual capacity of 10,000 tonnes and an estimated construction cost of about $12 million. Funding is expected to combine equity contributions from participating companies with project finance.
Engineering, permits and offtake targeted in 2026
According to Media Indonesia, the partners intend to undertake basic engineering and a technical, financial, environmental and social feasibility study in 2026. Preparatory work will also cover land acquisition, a methanol feedstock supply agreement and key Indonesian approvals, including spatial-use, environmental and building permits.
The developers aim to secure offtake agreements covering at least 70% of the plant’s output before launching production and supply of 10,000 tonnes of DME per year in 2028. Korean shareholders, including Bio Friends, are expected to hold a combined 51% stake in the project company. The investment agreement is also intended to provide a framework for attracting additional investors from South Korea and Indonesia and arranging financing.
Technology ownership and market roles divided
Bio Friends will supply DME production technology, basic engineering and operational expertise. Its Indonesian partners will handle local licensing, EPC coordination, financing, operational support and market development. The agreement leaves ownership of the technology, engineering data, operating knowledge and related intellectual property with Bio Friends.
NEI is expected to participate both as an investor and as a potential buyer. Its ships, cranes, heavy trucks and other industrial and logistics assets could provide initial applications for DME as an engine fuel. Media Indonesia said potential uses in the country also include port equipment, generators, industrial boilers and other heavy logistics machinery. DME has handling characteristics similar to LPG, making it relevant to Indonesia’s effort to reduce dependence on imported LPG and diesel and to serve distributed energy demand across its archipelago.
Larger CCU-based expansion under review
The partners are discussing a subsequent green methanol and green DME development with capacity of 100,000 tonnes per year. Bio Friends is reviewing Indonesian carbon capture and utilization projects based on CO2-to-methanol technology being developed at its demonstration facility in Danyang, South Korea. The proposed model would capture emissions from Indonesian cement plants, steel producers and power generators and convert the CO2 into methanol and DME.
The first phase remains focused on annual production and supply of 10,000 tonnes. A later phase could exceed 100,000 tonnes of DME capacity and use the fuel in NEI-owned equipment, vessels and logistics infrastructure. The larger plan still requires project development, buyers and financing, while the initial plant must first complete engineering, permitting, land, feedstock and offtake arrangements.