Indonesia’s Strategic Shift: Addressing LPG Import Dependency through Domestic Methane Utilization

Around 90% of Indonesia’s LPG needs are still met through imports. Of the roughly 8.5 million tons consumed annually, domestic production can only supply about 1.3 million tons. As a result, most LPG demand continues to rely on foreign sources, placing a significant burden on the country’s foreign exchange reserves.

This is no secret. The government has long been searching for an LPG alternative that can be produced from domestic resources. One of the most frequently discussed pathways is DME (Dimethyl Ether) derived from coal gasification. However, there is another approach now being actively developed by the National Research and Innovation Agency (BRIN) alongside YEC and Atomis: low-pressure methane gas storage technology based on Metal Organic Framework (MOF) materials.

Why Can Methane Serve as an LPG Alternative?

A common question arises: if Indonesia has natural gas reserves, why does it still need to import LPG? The answer lies in a difference in chemical composition that often goes unnoticed.

LPG is composed of propane (C3) and butane (C4), compounds that do not dominate Indonesia’s natural gas reserves. Our gas reserves are, in fact, rich in methane (C1) and ethane (C2). The problem, therefore, is not a shortage of gas, but a mismatch between the type of gas available locally and the type used in household kitchens.

This is precisely where methane storage technology becomes relevant. If methane can be stored and distributed efficiently at a household scale without requiring expensive pipeline infrastructure, dependence on imported LPG can be reduced significantly. Beyond that, Indonesia has methane sources that go beyond natural gas, including palm oil industry waste and urban solid waste, both of which qualify as renewable energy sources.

Two LPG Alternative Pathways Currently Under Development

Indonesia currently recognizes two main approaches to reducing its dependence on imported LPG. They differ in terms of feedstock, technology, and readiness for implementation.

Coal-based DME is a downstream processing program that the government has long promoted. Technically, DME shares similar physical and chemical properties with LPG, which means it can use existing cylinder infrastructure. However, the project still faces serious challenges. DME production costs are estimated to range from US$911 to US$987 per ton, far above the average LPG import price of around US$435 per ton. The required subsidy is also projected to exceed what LPG currently requires. A strategic investor has yet to be secured, and the implementation timeline keeps shifting.

MOF-based methane storage represents a fundamentally different approach. Rather than converting the feedstock into a new compound like DME, this technology stores methane in its existing form using a specialized material that can efficiently adsorb gas molecules. The result: gas can be stored at pressures far lower than conventional compression systems, in more compact containers, and can be distributed without pipeline networks.

Parameter	Coal-based DME	MOF-based Methane Storage
Primary feedstock	Low-grade coal	Natural gas, Biogas( from POME, urban waste, and more)
Local availability	Available, but extractive	Abundant and renewable
Distribution infrastructure	Existing cylinders	New containers, no pipeline needed
Development status	Pre-FS stage, investor not finalized	POC trial stage ,
Main challenge	Production cost 2× LPG import price	National standard (SNI) not yet available

Collaborative Innovation: Building a Domestic Supply Chain for Sustainable Energy

This is the collaboration most worth following. Since their first meeting at InaRI Expo 2022 and the subsequent signing of a Memorandum of Understanding in October 2023, three institutions have been engaged in joint co-development: BRIN’s Research Center for Polymer Technology, Yachiyo Engineering Co., Ltd. (YEC), and Atomis Inc.

The Technology Being Developed

At the heart of this collaboration is the development of a Metal Organic Framework (MOF)-based gas adsorbent material for low-pressure methane storage systems. Joddy Arya Laksmono, Head of BRIN’s Research Center for Polymer Technology, explained the system’s advantages directly to the public at InaRI Expo 2025.

“The pressure is almost the same as LPG, but the volume can reach one and a half times more. With MOF material added, methane gas can be stored in a smaller container, making it easier to distribute,” he said (Source: www.brin.go.id).

This technology forms the foundation of CubiTan, a MOF-based smart gas container designed for methane storage and distribution at both household and commercial scale. The shorter cylinder form compared to conventional gas canisters also adds logistical value.

Hajime Watanabe of Yachiyo Engineering stated that this collaboration is aimed at supporting Indonesia’s household clean energy transition. He emphasized that dependence on imported 3kg LPG cylinders continues to burden the national subsidy budget, even though Indonesia holds significant potential from natural gas, biogas, and methane. Through container-based storage technology, gas storage capacity can reach up to three times that of conventional systems.

Daisuke Asari, CEO of Atomis Inc. explained that MOF materials are continuously being refined to suit the characteristics of methane gas used in Indonesia. According to him, this adaptation process is essential to ensure that adsorption and desorption mechanisms function optimally before the technology is brought to market. Atomis itself is a startup originating from Kyoto University and is associated with the research ecosystem of Prof. Susumu Kitagawa, one of three scientists awarded the 2025 Nobel Prize in Chemistry for the development of Metal Organic Frameworks.

Local Methane Sources: Indonesia Has No Shortage of Feedstock

One of the key advantages of this approach over DME is the diversity of its feedstock sources. Muhammad Abdul Kholiq, Director of Intellectual Property Management at BRIN and Chairman of Biogas Indonesia, affirmed that Indonesia holds a vast and largely untapped potential for methane from domestic sources.

The two most promising sources are palm oil industry waste, specifically Palm Oil Mill Effluent (POME) and Empty Fruit Bunch (EFB), and urban solid waste. Jakarta alone generates 7,500 tons of waste per day, much of which has the potential to produce methane through anaerobic decomposition.

Unlike coal, which is an extractive commodity, methane from biogas is a renewable source that naturally follows the distribution of the palm oil industry and urban areas across Indonesia. Muhammad Abdul Kholiq of BRIN affirmed that palm oil waste in the form of Palm Oil Mill Effluent (POME) and Empty Fruit Bunch (EFB), along with urban solid waste — such as Jakarta’s 7,500 tons of daily waste — represent methane sources with significant potential that remain largely untapped.

Finding an LPG alternative that can truly be implemented in Indonesia is not simply a matter of choosing the most sophisticated technology. It also requires choosing the most realistic pathway in terms of economics, regulation, and resource availability. The BRIN, YEC, and Atomis collaboration offers an approach grounded in local strengths: methane from renewable sources, pipeline-free distribution, and digital monitoring systems that reduce risk while improving logistical efficiency.

The road to commercialization is still long, particularly on the standardization front. But the research foundation has been laid, and the direction is clear.

If you would like to understand more about how smart gas container technology works within this methane distribution ecosystem, learn more about CubiTan here.

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