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Jakarta: Indonesia, a leading global exporter of coal for power generation, revealed on Saturday a January embargo on coal exports to bolster domestic supplies.
The Ministry of Energy and Mineral Resources issued a statement citing escalating national electricity demand. The ministry warned that insufficient domestic coal supplies posed a serious risk of widespread power outages.
Indonesia’s coal exports constitute a significant portion of its output, yet producers are mandated to retain a minimum quantity for domestic power plants.
The export prohibition arrives amidst surging global demand. Post-pandemic economic recovery has fueled a worldwide rise in electricity consumption, exceeding the capacity of cleaner energy alternatives.
COP26 Climate Summit
The International Energy Agency reported last month that global coal consumption, a primary source of greenhouse gases, hit record highs in 2021 and is projected to persist in 2022, jeopardizing emissions reduction targets established at the COP26 climate conference.
Indonesia’s January coal exports approximated 30 million tons, according to the Central Bureau of Statistics.
Authorities implemented the export ban after coal producers failed to meet their “domestic market obligation.” This mandate requires producers to provide at least 25 percent of approved mine production at a capped price of $70 per metric ton—significantly below the international market rate.
A ministry official, Radwan Jamal Al-Din, stated in a Saturday announcement that the temporary export ban will prevent the shutdown of approximately 20 energy facilities generating a combined 10.9 gigawatts of power.
He further indicated that the government will reassess the ban after January 5th.
He emphasized, ”We cannot tolerate companies’ failure to fulfill their domestic market commitments hindering investment and the national economy.”
Indonesia has committed to halting new coal plant construction from 2023 and achieving carbon neutrality by 2060.
Despite environmental concerns, development of the Suralaya coal facility on Java Island continues.
This massive facility, among the largest in Southeast Asia, has the capacity to power approximately 14 million homes annually.
