{"id":11847,"date":"2022-01-12T02:39:43","date_gmt":"2022-01-12T02:39:43","guid":{"rendered":"https:\/\/energytracker.asia\/?p=11847"},"modified":"2022-01-12T02:39:46","modified_gmt":"2022-01-12T02:39:46","slug":"indonesia-bans-coal-exports-for-january-what-it-means-for-the-world","status":"publish","type":"post","link":"https:\/\/energytracker.asia\/indonesia-bans-coal-exports-for-january-what-it-means-for-the-world\/","title":{"rendered":"Indonesia Bans Coal Exports for January – What it Means for the World"},"content":{"rendered":"
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Not long ago, Indonesia was talking about expanding coal<\/a> to sate the expanding energy needs<\/a> of one of Southeast Asia\u2019s economic powerhouses. But the country’s latest decision to ban coal exports<\/strong> proves that the energy landscape is changing fast. Consequently, coal miners, coal companies, and the coal industry have a lot to be concerned about – not just in Indonesia but also across the globe. It will affect the current market prices of coal and also coal stocks. Indonesian coal miners association didn’t welcome this coal export ban by Indonesia.<\/p>\n\n\n\n

Indonesia as the Global Exporter of Thermal Coal<\/strong><\/h2>\n\n\n\n

Pre-2000\u2019s Indonesia\u2019s role as a coal exporter was fringe at best. Yet, over the last 20 years, they are second only to China, surpassing even Australia as leading coal exporters. Between 2000-2017, Indonesia\u2019s thermal coal exports soared by 547%<\/a>. Today, by weight, Indonesia is the world’s biggest exporter of coal, with shipments culminating to 455 Metric tonnes (Mt) in 2019<\/a> and 405 Mt in 2020<\/a>. All things constant, the International Energy Agency (IEA) predicts Indonesia will remain a coal export heavyweight until 2024<\/a>. <\/p>\n\n\n\n

\"Total
Total Coal Exports by Major Exporters, 1978-2020. Source: IEA<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

<\/a>Indonesia Suspended Coal Exports in January 2022 due to Domestic Power Plants Supply Concerns<\/strong><\/h2>\n\n\n\n

Starting 2022 with a bang, Indonesia banned its January coal exports<\/a> after mines failed to meet domestic market obligations and because of domestic power plants supply concerns. This seemingly set off government concerns <\/a>about potential widespread power outages from growing demand. <\/p>\n\n\n\n

However, the move isn\u2019t a total surprise. Indonesia has a history of curbing coal exports<\/a> to prioritise domestic demand. Yet, the drastic measures to completely halt exports left many countries stunned and left the coal industry in Indonesia unnerved.<\/p>\n\n\n\n

Indonesian Coal Miners Commit to Meet Domestic Supply<\/strong><\/h2>\n\n\n\n

After the ban on thermal coal exports in January, coal miners of Indonesia committed<\/a> 2.9 mil mt domestic supply. The Indonesian coal mining association (APBI) called the decision “not appropriate.” Indonesia’s energy ministry (ESDM) said<\/a>: “The suspension of coal exports will be evaluated and reviewed on realisation of supplies to state-controlled utility PLN and its subsidiaries and other independent power producers in the country.”<\/p>\n\n\n\n

What the Indonesia Coal Exports Ban Means for Countries Dependent on Indonesian Coal?<\/strong><\/h2>\n\n\n\n

Indonesia’s ban on coal exports means nothing but more instability for global coal markets and global coal prices. This builds on a volatile year for coal. Prices in 2021 saw the fossil fuel trade for USD 158 per tonne<\/a> in October but plunged to USD 68 in December.<\/p>\n\n\n\n

Firstly, the ban could see countries like China, India, Japan and south Korea – who make up 73% of Indonesian coal exports<\/a> – face energy price spikes. Soaring coal prices, for example, were part of the reason why blackouts rippled across China<\/a> in 2021. China is the world’s biggest consumer of coal.<\/p>\n\n\n\n

Secondly, the ongoing phaseout of coal sweeping across the globe post-COP26 is proving difficult for the industry to handle. Indonesia\u2019s export ban means dramatically shrinking the already troubled supply market. As a result, coal prices will experience magnifying erratic price swings.<\/p>\n\n\n\n

\"Thermal
Source: IEA<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n\n

Indonesia\u2019s Renewable Energy Energy Transition in the Wake of its Coal Export Ban<\/strong><\/h2>\n\n\n\n
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Indonesia is among the last stewards of the dying coal industry. It has already planned to cease commissioning<\/a> new coal-fired power plants and cut out coal for electricity use by 2056. For what coal plants remain, Indonesia intends to pluck out value by deploying unproven capture capture and storage technologies.<\/p>\n\n\n\n

Despite Indonesia\u2019s long history of solid coal support, renewables are fast making inroads into the energy mix. The country\u2019s electricity procurement plan, RUPTL, sees renewables accounting for over 51% of its energy<\/a>. Together with Regulation No. 26\/2021, the latest solar rooftop legislation, the policies encourage Indonesia to capitalise on its clean energy potential.<\/p>\n<\/div>\n\n\n\n

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