The Indonesian government is pursuing a policy to mandate coal miners to operate local processing plants after annual coal production hit a new record in 2023.
The downstream industry policy seeks to restrict the export of raw coals while obliging producers to come up with a clear domestic processing agenda by 2025.
A senior official said Tuesday the presence of domestic coal processing plants becomes a requirement for any coal company to get their license extended by the government.
The downstream industry program requires the utilization of coals in other industries such as dimethyl ether, methanol, synthetic gas, hydrogen, and ammonia.
However, there has been little progress since the program was introduced in 2022.
“Companies have different output plans and no one has started the program yet,” said Lana Saria, director of coal business supervision with the Energy and Mineral Resources Ministry.
“Some companies have their downstream industry plan approved and they are either conducting feasibility studies or looking for business partners,” she added.
Energy Minister Arifin Tasrif said the previous day that the national coal production reached 775 million tons last year, the highest annual output in history.
Of that figure, 213 million tons were used in domestic power plants while the remaining amount went to the export markets.
In the past four years, Indonesia’s coal production has been on a steady rise, from 564 million tons in 2020 to 614 million tons in 2021 and 687 million tons in 2022.
“The growth in coal production is attributable to growing demand from the electricity industry as we are adding more coal-fired power plants,” Arifin said.
Disruptions in global gas supplies also drove up demand for Indonesian coals as alternate energy sources, he added.
Image source: Antara Photo/M Risyal Hidayat