One of the largest countries in Southeast Asia is facing an energy crunch — and that’s sending ripples of impact around the region.
Indonesia’s government is concerned about coal — not because of pollution, but because of energy needs.
The country is the biggest exporter of thermal coal — used to generate electricity — and officials are worried about having enough for domestic consumption to prevent widespread blackouts.
On New Year’s Day, Indonesia’s Ministry of Energy and Mineral Resources banned the export of coal for the month of January — subject to a re-evaluation this week.
China is a key player in this — Indonesia is the country’s top supplier of coal imports.
According to government figures, over the first 11 months of 2021, more than 60% of China’s coal imports came from Indonesia.
Commodity analysis firm Kpler writes that other international markets for Indonesian coal include India, Japan and South Korea.
The Indonesian Coal Mining Association issued a statement saying it expects short-term domestic supply issues will improve shortly — adding “we hope that exports can be gradually reopened.”
Under normal conditions, Indonesia exports more coal than it uses domestically.
Last month, the International Energy Agency said global demand for coal hit a record in 2021 — and demand is continuing at a high level as the northern hemisphere heads into the coldest months of the year.
