Dimethyl Ether as a Game Changer for the Hydrogen Economy: Fraunhofer ISE Relies on New Process for Green DME Production in Chile

Freiburg (Germany) - In order to achieve its climate targets, Germany will have to import large quantities of hydrogen in the future. One promising hydrogen derivative is the gas dimethyl ether (DME). In a research project, Fraunhofer ISE has developed an efficient synthesis process that could pave the way for large-scale production.

As part of the international project “Power-to-MEDME,” the Fraunhofer Institute for Solar Energy Systems ISE (Fraunhofer ISE) investigated the entire process chain for the production of green methanol and DME in Chile. The new INDIGO process combines synthesis and distillation simultaneously, saves energy, and reduces costs by more than a quarter compared to conventional processes. The project has created the prerequisites for producing CO₂-neutral energy carriers in Chile. The next step is the construction of a pilot plant for the production of green methanol and DME on a megawatt scale.

DME as a strategic hydrogen carrier: “Hidden champion” for import and industry

For Germany’s hydrogen strategy, the question of efficient import carriers is becoming increasingly important. According to Fraunhofer ISE, dimethyl ether (DME) could play a key role as a promising energy carrier for hydrogen and its derivatives. It is environmentally friendly, non-toxic, efficient, and economically attractive. “Dimethyl ether is the hidden champion of the hydrogen economy, not only because it has a significantly higher volumetric energy density than ammonia, which has been the most commonly used fuel to date, making it an ideal candidate for import. It is also a renewable alternative to fossil raw materials as a platform molecule in areas such as the chemical industry and mobility,” explains Dr. Elias Frei, Head of Hydrogen at Fraunhofer ISE, in classifying DME.

The DME market is already substantial, at more than 5 million tons per year. New applications, such as blending with liquefied petroleum gas (LPG) or use as a feedstock for fuels, are likely to significantly increase volumes. “The global LPG market comprises around 200 million tons per year,” emphasizes Dr. Achim Schaadt. In addition, the market for sustainable aviation fuels is estimated to reach up to 400 million tons per year by 2050 - “which shows the enormous potential of DME.”

Fraunhofer ISE therefore aims to work together with industry to advance new DME applications and market developments enabled by current research results.

INDIGO process and Chile project: increasing efficiency and pilot phase

DME is not an unknown gas: many people are familiar with it as a propellant in deodorants, and it is already used as a solvent and refrigerant. However, conventional DME production is energy-intensive because synthesis and separation take place in separate steps. The new INDIGO process at Fraunhofer ISE combines synthesis and distillation simultaneously. This simplifies the process, increases efficiency, and reduces costs by more than a quarter compared to conventional processes, according to Fraunhofer ISE.

Energy demand is also reduced because the heat released during the reaction flows directly into the distillation column. According to Fraunhofer, this makes the process particularly attractive for remote regions.

In the “Power-to-MEDME” project, the entire process chain for large-scale production of methanol and DME in Chile was analyzed. In all six cases examined, the INDIGO process proved more cost-effective than the conventional reference process. For the simulation, the researchers used the Syn2X tool to model dynamic, part-load-capable operation and obtain realistic data under fluctuating load conditions.

The goal of the project is to establish a pilot plant for the production of green methanol and DME on a megawatt scale. The research team is supporting this project through analyses of all process steps as well as material development and testing. The aim is to further reduce costs by increasing efficiency and optimizing the integration of individual processes.

As a potential site, Fraunhofer ISE identified the Antofagasta region in northern Chile. Solar surpluses are already being generated there today, some of which have to be curtailed. The region has great potential, as electricity from photovoltaics and concentrated solar thermal power generates such high surpluses that grid feed-in must be reduced. “In addition to the more efficient use of electricity and local value creation, the project also contributes to the development of the region through the transfer of German technology know-how,” explains Robert Szolak, Head of Sustainable Synthetic Products Department at Fraunhofer ISE.

Source: IWR Online, 13 Feb 2026