Dimethyl ether (CH3OCH3) is generally produced by dehydration of methanol. At large scale, the methanol production and dehydration processes are combined in one reactor, such that the dimethyl ether is produced directly from synthesis gas slightly more efficiently than methanol. The previously mentioned slurry bubble column reactor of Eastman Chemical Company in Kingsport, TN, has been demonstrated to be able to produce DME as well. The LPDME™ Process uses a physical mixture of a commercial methanol catalyst and a commercial dehydration catalyst in a single slurry reactor (Heydorn et al. 2003).

Like methanol, DME has promising features as a fuel candidate for both auto and diesel engines. With small adaptations to engine and fuel system, DME can be used in blends with diesel (10-20%), leading to higher fuel efficiency and lower emissions. In auto engines, DME can be used with LPG (any %) and neat. Since DME is as easily reformed as methanol, it has a big potential as fuel of fuel cell vehicles (van Walwijk et al. 1996). DME can be easily pressurized and handled as a liquid (Ekbom et al. 2003).