Indonesia plans to produce 695 million tonnes of coal in 2023 and sees exports of 518 million tonnes, Energy and Mineral Resources Minister Arifin Tasrif said recently, indicating a level that would ensure record shipments out of the country.
In 2022 Indonesia produced 687 million tonnes of coal and exported 494 million tonnes, as per the minister.
Production in 2022 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 in 2022, while shipments to its biggest market, China, dipped in 2022.
The country’s domestic coal consumption is estimated at 177 million tonnes in 2023, down from 193 million tonnes in 2022.
“There are a number of efficiency programmes that we must carry out to reduce carbon emission from coal power plants,” Arifin Tasrif said, while explaining the lower estimate.
Coal-fired power makes up more than 50% of Indonesia’s energy supply and the government in 2022 set a more ambitious target to cut emissions by 31.89% on its own, or by 43.2% with international support, by 2030. The country also aims to reach net zero emissions by 2060.
Arifin Tasrif expects that coal prices will remain elevated in 2023 after 2022’s record prices, caused by supply disruptions from the Ukraine war.
“Coal prices are expected to still hold up well in 2023 because of global energy (supply and demand) balance problems that still need some support from coal,” he told reporters.
Arifin Tasrif also said the country consumed 10.45 million kilolitres of biodiesel made from palm oil in 2022, and is targeting consumption of 13 million kilolitres in 2023.
Indonesia’s government-set monthly coal benchmark price peaked at USD 330.97 per tonne in October 2022. It was at USD 305.21 per tonne in January 2022.
However, it banned coal export twice in that year, saying it was falling short of its domestic targets. The ban came when the European Union started its phased-in restriction on Russian energy supplies, especially coal imports.
The world’s top palm oil producer is also expected to implement a ‘B35’ programme in February 2023, which would mandate that diesel fuel contains 35% palm oil, up from the current level of 30%.