The manufacturing industry still relies heavily on coal and petroleum as its main energy sources. However, this dependence makes companies vulnerable to global energy price fluctuations and supply disruptions that can increase production costs.
At the same time, industry players also face pressure to comply with increasingly strict emission regulations, while improving operational efficiency to stay competitive in the business landscape.
These conditions are pushing manufacturing companies to look for alternative energy sources that can support operational needs while also addressing demands for efficiency and sustainability. One option now worth considering is Liquefied Natural Gas (LNG).
What Are the Challenges Facing the Manufacturing Industry That Still Relies on Coal and Petroleum?
Dependence on coal and petroleum brings many challenges for the manufacturing industry, particularly in terms of operational costs, regulatory compliance, and production process efficiency.
One of the main challenges is energy price volatility driven by global market dynamics. This condition makes it more difficult for companies to control operational costs and develop long-term production budget planning.
In addition, the combustion of coal and petroleum produces relatively high levels of carbon dioxide (CO2), sulfur oxides (SOx), nitrogen oxides (NOx), and particulate emissions. As a result, companies need to undertake various additional efforts to comply with emission regulations and reduce the environmental impact of their operations.
From an operational standpoint, both energy sources also produce residues such as ash and soot that can accelerate the buildup of deposits on boilers and production equipment. This leads to higher maintenance requirements and can reduce operational efficiency over time.
Beyond that, the storage and distribution of solid and liquid fuels generally require more complex infrastructure and handling. This condition can add to the operational burden, especially for industries that need a continuous energy supply.
These various challenges are pushing many manufacturing companies to start considering more efficient alternative energy sources, including LNG.
Read More: The Pros and Cons of Using Coal for Energy
Why Is LNG More Beneficial Than Coal and Petroleum?
Compared to coal and petroleum, LNG offers a number of advantages that can add value for the manufacturing industry. These benefits are visible not only from the energy use aspect, but also from operational efficiency that helps improve industrial competitiveness.
Advantages from an Energy Standpoint
LNG produces cleaner combustion compared to coal and petroleum because the sulfur oxide (SOx), nitrogen oxide (NOx), and particulate emissions it generates are significantly lower.
This characteristic also results in more stable and consistent combustion, making it well suited to the needs of manufacturing industries that require an uninterrupted energy supply.
In addition, the use of LNG can reduce CO2 emissions by around 25 to 30% compared to petroleum-based fuels, and produces lower emissions than coal.
Advantages from an Operational Standpoint
Because it does not produce solid residues such as ash or soot, the use of LNG can reduce deposit buildup on boilers and industrial equipment, resulting in lower maintenance requirements.
Its efficient combustion process also helps improve thermal efficiency, so energy can be utilized more optimally.
Beyond serving as a primary fuel, LNG can also be used as a backup fuel, providing operational flexibility, especially for industries in areas not yet connected to the gas pipeline network.
Advantages from a Business Standpoint
In addition to providing technical benefits, the use of LNG is also supported by government policy through the Certain Natural Gas Price scheme, which sets the gas price at the plant gate at a maximum of USD 6 per MMBTU, lower than the commercial gas price that generally ranges from USD 7 to 10 per MMBTU.
This scheme applies to companies that meet the criteria in seven industrial sectors, namely fertilizers, petrochemicals, oleochemicals, steel, ceramics, glass, and rubber gloves, as regulated under Ministerial Regulation of ESDM No. 15 of 2022 and Ministerial Decree of ESDM No. 91.K/MG.01/MEM.M/2023.
With more stable and competitive energy prices for qualifying sectors, companies can reduce production costs while improving competitiveness and investment attractiveness.
Read More: Alternatives to Petroleum that are the Most Environmentally Friendly
Why Is LNG Increasingly Relevant to the Development of Modern Industry Today?
As global focus on the energy transition grows, LNG is increasingly viewed as a bridge fuel that bridges the use of conventional fossil fuels toward a lower-carbon energy system.
For the manufacturing industry, LNG is a relevant choice because it can help reduce emissions without sacrificing the energy supply reliability needed to sustain production processes.
On the other hand, LNG also serves as a complement to intermittent renewable energy sources such as solar and wind that depend on weather conditions. As a flexible and reliable backup energy source, LNG can help maintain industrial operational continuity.
Its relevance continues to grow alongside the development of more efficient LNG technology and the application of carbon capture technology in various LNG projects to help reduce emissions throughout the production chain.
To make optimal use of LNG’s potential, industries need not only a stable supply, but also a partner that understands the complexity of its management, from distribution to operational locations and storage through to regasification.
This need is increasingly critical for manufacturing industries whose production processes cannot tolerate even the smallest energy supply disruption. To address this need, PGN LNG Indonesia provides integrated LNG services designed to support energy needs in the industrial sector.
Find out the complete solutions we provide for your industry, read more here: LNG Provider in Indonesia.
References
- EIA. Accessed 2026. The Role of Gas in Today’s Energy Transitions
- McKinsey. Accessed 2026. The future of liquefied natural gas: Opportunities for growth
- ESDM. Accessed 2026. Key Points of Ministerial Regulation of ESDM Number 15 of 2022
- ESDM. Accessed 2026. Ministerial Decree (Kepmen) of ESDM No. 91.K/MG.01/MEM.M/2023
