Indonesia plans to produce 695 million tonnes of coal this year and sees exports of 518 million tonnes, Energy and Mineral Resources Minister Arifin Tasrif said on Monday, a level that would mean record shipments out of the country.
In 2022 Indonesia produced 687 million tonnes of coal and exported 494 million tonnes, he said.
Production last year was higher than the target of 663 million tonnes despite an export ban at the start of the year that caused some miners to hold back output, as well as heavy rains that disrupted operations.
According to shipping data from consultancy Kpler, Indonesia’s exports to India, South Korea, Taiwan and the Philippines all rose last year, while shipments to its biggest market, China, dipped in 2022.
Meanwhile, Indonesia’s domestic coal consumption is estimated at 177 million tonnes in 2023, down from 193 million tonnes in 2022.
“There are a number efficiency programs that we must carry out to reduce carbon emission from coal power plants,” the minister said, explaining the lower estimate.
Coal-fired power makes up more than 50% of Indonesia’s energy supply and the government last year set a more ambitious target to cut emissions 31.89% on its own, or 43.2% with international support, by 2030. The country also aims to reach net zero emissions by 2060.
Arifin expects that coal prices will remain elevated this year after 2022’s record prices, caused by supply disruptions from the war in Ukraine.
“Coal prices are expected to still hold up well in 2023 because of global energy (supply and demand) balance problems that still needs some support from coal,” he told reporters.
Indonesia’s government-set monthly coal benchmark price peaked at $330.97 per tonne in October. It was $305.21 per tonne this month.
Arifin also said the country consumed 10.45 million kilolitres (kl) of biodiesel made from palm oil in 2022, and is targeting consumption of 13 million kl this year.
The world’s top palm oil producer is expected to implement a ‘B35’ program in February, which would mandate that diesel fuel contains 35% palm oil, up from 30% currently.
(By Bernadette Christina Munthe and Fransiska Nangoy; Editing by Ed Davies, Christian Schmollinger and Kenneth Maxwell)