05 Jan 2022
As the world's largest exporter of coal used in the production of electricity, Indonesia announced on Saturday that it had halted coal shipments for the month of January in an effort to protect its domestic power supply. More supplies must be redirected to power stations because of the rising demand for energy, stated the Ministry of Energy and Mineral Resources in a statement. The bulk of Indonesia's coal is exported, but the government mandates that producers put aside a certain proportion for use in the country's power generation facilities.
Global economic development following the pandemic has led to an increase in demand for power that cannot be satisfied by less-polluting alternatives. It has been reported that demand for coal, the world's primary source of greenhouse gas emissions, would hit a record in 2021 and will continue into 2022, jeopardizing goals laid forth at the COP26 climate change summit to reduce emissions. Almost 30 million tons of coal were shipped from Indonesia in January.
It was enforced when coal miners failed to satisfy the so-called Domestic Market Obligation, which requires that they provide a minimum of 25% of a mine's approved production plan at a maximum price of US$70 per metric ton—less than half the worldwide benchmark price.
A senior official at the ministry, Ridwan Jamaludin, said in a statement Saturday that the temporary export embargo would save almost 20 power facilities that produce a total of 10.9 gigawatts of power from shutting down. He promised that the administration would reevaluate the program on January 5th. In his words, "we can't let the corporations disobey to comply with DMO destabilize the investment atmosphere and nation's economy.
As of 2023, all new coal-fired power facilities in Indonesia will be decommissioned, and the country aims to achieve carbon neutrality by the year 2060. In spite of the protests of environmentalists, the construction of Java Island's Suralaya coal plant continues. This massive facility may supply about 14 million houses with electricity annually, which is Southeast Asia's largest.