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Jakarta: Indonesia, the world’s largest exporter of coal used to generate electricity, announced Saturday that it banned exports of the material in January in an effort to ensure its internal supply.
The Ministry of Energy and Mineral Resources said in a statement that the increasing demand for electricity in the country threatens widespread interruptions unless more supplies are diverted to power stations.
Indonesia exports the majority of its coal, but requires producers to keep a minimum amount to supply the country’s power plants.
The decision came against the backdrop of increasing demand at a time when economic growth in the post-virus phase worldwide is causing a rise in demand for electricity that cannot be secured from less polluting alternatives.
Climate Conference COP26
The International Energy Agency said last month that global demand for coal, the world’s largest emitter of greenhouse gases, reached record levels in 2021 and could continue into 2022, threatening plans made at last year’s COP26 climate conference to cut emissions.
Last January, Indonesia exported about 30 million tons of coal, according to the Central Bureau of Statistics.
The authorities imposed an export ban after coal miners failed to comply with the so-called “domestic market obligation” under which they must supply at least 25 percent of an approved mine production plan at a maximum selling price of $70 per metric ton, less than half the global reference price. .
And the temporary export ban decision would prevent about 20 facilities that provide 10.9 gigawatts of energy in total, from closing, according to an official in the ministry, Radwan Jamal Al-Din, announced in a statement Saturday.
The government will re-evaluate the decision after January 5, he said.
“We cannot allow companies’ non-compliance with the local market’s commitment to impede the investment climate and the national economy,” he added.
Indonesia has pledged to stop building new coal facilities from 2023 and reach carbon neutrality by 2060.
However, despite criticism from environmental activists, work to develop the Suralaya coal facility on the island of Java is still ongoing.
The mega facility is one of the largest in Southeast Asia, and is capable of providing power to about 14 million homes annually.
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