OPINION
Ardhi Ishak K.
Promotion and Government Relations Head PT Pamapersada Nusantara.
Members of the Executive Board of ASPINDO, APBI, and PERHAPI
Future Indonesia coal industry
in energy transition era
T
he world’s coal While demand for coal is forecast grew by over 5% during 1st half 2023.
consumption was projected to fall, the demand for renewables Indonesia is the world’s largest
to reach a new high at over is rising as almost every country thermal coal exporter since 2010,
8 billion tons in 2022 when has committed to reducing their exporting 465 million tons of coal
the energy crisis was still shaking the carbon emission toward 2050 as their in 2022 and expecting to rise more
market. China and India are still the contribution to reach the world’s than 500 million tons this year. Coal
biggest coal consumers, which both climate change target. industry has seen a fast growth since
account for 67% of the total global In the latest IEA’s Coal Market 1993, when it only produced 30 million
consumption. They are also recorded as Update – July 2023, coal demand tons. Within 10 years coal production
the largest coal producers in the world. fell faster than previously expected increased 4x to 122 million tons in
Coal is both the single biggest in United States and the European 2003, then increased again to 475
source of primary energy for electricity Union by 24% and 16%, respectively. million tons in 2013 and now in 2023
generation worldwide and the single However coal demand from two it is expected to reach 750 million tons,
biggest source of carbon emission. largest consumers, China and India, the new highest production record.
CoalMetalAsia doc.
72 COALMETAL ASIA | SEPTEMBER 2023
(in mil. ton)
800 750
729
Domestic
687
700
Export 601
600
Production
500 475
392
413
513 296
400 465 327
300
200
403 113
200
122
100
29 92
72 222 237 337 305 213 214
0 30
1993 2003 2013 2022 2023 2030F 2040F 2050F 2060F
As part of international community, demand also rose significantly from 10 so do the cement factorys and steel
Indonesia is also committed to reaching million tons 30 years ago to 222 million mills. Indonesia’s energy sector will
net zero emissions by 2060 or before. ton last year and projected to increase still be growing in the future. Currently
Goverment through Ministry of Energy to 237 million tons in 2023. , our electricity consumption is only
and Mineral Resources (MEMR) In the future global coal demand 1.17 MWh per capita, which is very
already released an Energy Sector will decrease while the energy low compared to Asian countries which
Roadmap to Net Zero Emissions, under transition taking place, replacing consume an average of 3.31 MWh per
collaboration with International Energy fossil fuel with renewables or other capita or to advanced economies like
Agency (IEA). The government also low emission energy sources. This European countries at 6.28 MWh per
has also planned early retirement of will be challange for Indonesia coal capita.
coal-fired power plants with the support sector. It should be prepared for Energy transitions offer the chance
of Just Energy Transition Partnership smooth transition since mining activity to build a sustainable energy system
(JTEP) and Energy Transition involving huge amount of working that reduces negative impact to the
Mechanism (ETM) that provide capital, workers and also investment. environment. Energy security is the
providing blended financing scheme to Indonesia’s coal industry roadmap with key challenges for energy transition,
decarbonize Indonesia’s energy sector. energy transition perspective should to ensure it’s availability, acceptability
Coal mining sector has played an be designed carefully by involving all and also affordability.
important role for Indonesia’s economy stakeholders. It should be noted that Indonesia’s
during the last 30 years. Now we have Indonesia’s mining sector also coal reserve of about 36 billion tons is
become the third largest coal producer produces nickel, cobalt, tin, copper, and enough to cover all domestic needs for
and also the largest thermal coal bauxite. All those minerals should be more than 100 years. This advantage
exporter in the world. There are more refined and processed by downstream should be taken into consideration in
than 900 coal mines in production stage industry in the country as refer to our energy transition roadmap and
with production capacity more than 750 regulation. This industry still uses coal- grand strategy for coal sector in energy
million tons per annum. Domestic coal fired power plants as the powerhouse, transition era.
SEPTEMBER 2023 | COALMETAL ASIA 73
