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​Energy Crisis and Coal Export, Recent Developments in Indonesia

Posted 8 months ago by JAC Outsourcing

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Domestic energy supply, especially coal, became a hot issue in early 2022 with various policies taken by the Government, including a ban on coal exports. The Government accepted this step to maintain the availability of domestic energy to remain safe and accelerate the recovery of the national economy.

President Joko Widodo has banned coal exports as of January 1, 2022, because PT PLN ( State Electricity Company) is experiencing a coal crisis that can cause power outages. Several countries have protested against this policy. Indonesia is indeed one of the largest coal exporters in the world. No wonder the policy of banning coal exports impacts other countries. 

The Ministry of Energy and Mineral Resources (ESDM) noted that Indonesia's coal exports reached 405 million tons in 2020. The Government plans to form a public service agency (BLU) to overcome the threat of an energy crisis, especially coal. This BLU will later manage the funds collected from coal companies. Several efforts have been made so that PT PLN gets a supply of coal for power plants to be free from the threat of power outages.

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Meanwhile, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said the ban on coal exports had not been lifted. However, 37 coal carriers have been allowed to sail to export destinations. Entrepreneurs welcome the export concessions made by the Government. 

The Executive Director of the Indonesian Coal Mining Association, Hendra Sinadia, said his party is still waiting for the details of the policy from the Government. He further explained that coal companies that wish to export must meet the requirements set by the Government in the future. The first condition is that coal companies that have fulfilled their sales contracts to the state electric company and have 100% DMO obligations in 2021 will be allowed to export in 2022.

Second, suppose the coal company already has a contract with the state electric company but has not fulfilled its contractual obligations and the DMO for 2021. In that case, it must fulfill the penalty obligation according to the Decree of the Minister of Energy and Mineral Resources Number 139 of 2021. The calculation value of the fine will be applied since the Ministerial Decree is issued.

The third provision is that coal companies whose coal specifications do not meet the specifications for state electricity company's coal requirements or do not have a contract with the state electric company in 2021 will also be subject to a fine with the exact mechanism as in the Decree of the Minister of Energy and Mineral Resources No. 139 of 2021.

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