JAKARTA (Reuters) – Indonesian lawmakers on Thursday called on the government to raise the domestic sales requirement for coal miners to 30% on the expectation that energy demand in Southeast Asia’s biggest economy will rise in coming years.
Coal companies are currently required to sell 25% of their output to the local market, with a $70-per-tonne cap for power generators and a $90 cap for cement and fertiliser industries.
The world’s biggest thermal coal exporter in early January suspended shipments of the fuel amid low inventories at local power generators. Exports have since been allowed to resume, except from miners who have yet to comply with the domestic sales rule.
Any increase in the so-called mandatory domestic obligation is likely to worry the global energy market, already reeling from the unexpected ban earlier this year.
Sugeng Suparwoto, chairperson of the parliamentary committee overseeing the energy sector, said the current 25% requirement will not be enough to meet local demand as it is expected to rise.
“Coal demand will surely increase, whether for the needs of (the state utility) or industrial demand,” he said in a hearing with Energy Minister Arifin Tasrif, who did not address the committee’s recommendation.
As part of its efforts to reach net-zero carbon emissions by 2060, Indonesia has said it will not build new coal power plants. But several projects are already underway and these are expected to add around 14 gigawatts of new capacity in the coming years, according to the country’s 2021-2030 power supply strategy.
(Reporting by Fransiska Nangoy; Editing by Kanupriya Kapoor)
