Coal Remains the Largest Foreign Exchange Contributor in the Minerals Subsector in Indonesia

- 14 March 2022 13:38 WIB
Illustration. Andrey Andreyev/Unsplash
Illustration. Andrey Andreyev/Unsplash

JAKARTADAILY.ID – Out of all the fossil fuels, Coal remains one of the cheapest and yet most vital non-Renewable Energy sources amidst Indonesia's plans to transition into greener energies.  

Executive Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia explained that so far Coal has proven to be the cheapest or most affordable energy source in the world. Coal is also able to meet the elements for national energy security.

“The availability of Coal is still relatively large and acceptable. Especially with the development of low-emission generating technology," he told reporters recently.

Also read: President Joko Widodo Inaugurates Coal-to-Dimethyl Ether Project in South Sumatra

He said that Coal is currently is the world's target along with the uncertainty of oil and gas supply due to the invasion of Russia and Ukraine. In fact, a number of countries that use natural gas as the main energy source have begun to take steps back to using Coal as energy.

Some of them are italy and Germany. Both countries are known to use gas as a source of energy for power generation. The high price of gas has made the country choose to operate a Coal-based steam power plant (PLTU).

Hendra believes that this situation will have a positive impact on Indonesia. Indonesia is one of the largest thermal Coal producing countries in the world. This type of Coal is used by the world as a source of energy for power generation.

Based on data from the Ministry of Energy and Mineral Resources, domestic Coal production has reached 74.02 million tons as of March 4, 2022. This amount is equivalent to 11.16 percent of the target set by the government, which is 663 million tons by the end of the year.

Of this amount, 11.14 million tons of Indonesian Coal sold to the market were exported and another 18.24 million tons were intended for domestic industries. Both for power generation and industrial needs such as fertilizer and cement. While the rest are still in the process of being sold.

In addition, Energy Watch Executive Director Mamit Setiawan explained that the growth of the Coal industry will increase the demand for labor. This means that the existence of fossil mining is able to reduce the number of unemployed in the country. "This increase will also revive the economy of the community and the local government, where the Coal mining sites are located," he said.

So far, Coal continues to be one of the largest foreign exchange earners in the mineral and Coal sub-sector. Last year, non-tax state revenue (PNBP) in this sector reached Rp 75.15 trillion or 192% of the target. Meanwhile, this year's foreign exchange contribution is projected to exceed last year's target.

Also read: Indonesia Bans Coal Carrier Ships for Export

As for energy transition efforts, Coal is one of the biggest sources of energy in the country. This is because the energy transition or use of clean energy generation is still at the development stage.

In addition, the investment cost for the development of new and Renewable Energy is quite expensive. The Ministry of Energy and Mineral Resources has on several occasions mentioned that the investment required for the development of EBT will reach IDR 400 trillion in the next 10 years. This assumption is considered after the EBT Bill is completed.


Editor: Suksmajati Kumara


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