Economic Assessment of Bio-DME Production from Oil Palm Empty Fruit Bunches: Decarbonizing Diesel-Heavy Mining Operations in Kalimantan, Indonesia

Biomass from Oil Palm Empty Fruit Bunches (OPEFB) is a potential renewable energy source in Indonesia that can be efficiently converted into fuel products, such as DME. Although research exists on DME production using OPEFB, no significant economic assessment or feasibility study of OPEFB-based bio-DME plants replacing diesel fuel is currently underway. This research assesses the feasibility of an OPEFB-based bio-DME plant as a diesel replacement. The method determines the potential of OPEFB raw material, estimates investment and operating costs, and evaluates economic feasibility parameters. Based on the economic evaluation, the net present value (NPV) and internal rate of return (IRR) are USD 92.99 million and 17%, respectively, for a 30-year plant life and an investment of USD 180.93 million. Only 6.25% of the OPEFB-based bio-DME produced can substitute for the non-subsidy diesel consumption of a nearby coal mine, while savings obtained by substituting diesel amount to USD 18.55 million per year. Plant capacity and capital expenditure (CAPEX) are most sensitive to disturbances, requiring capacity utilization above 74% and CAPEX increases below 38.3% to remain viable, whereas the OPEFB feed price is least sensitive. Additionally, substituting fossil diesel yields a highly favorable estimated carbon abatement cost of USD -617 per tonne of CO2 avoided. This research confirms that OPEFB-based bio-DME should be viewed not merely as a waste-management strategy but as a critical component of Indonesia's energy transition.