INDONESIA, the biggest exporter of coal used in electricity generation in the world, said it has banned exports of the fuel this month in a move aimed at safeguarding its domestic power supply.

The country’s rising demand for electricity risks widespread blackouts unless more supplies are diverted to power stations, said the Energy and Mineral Resources Ministry in a statement today.

Indonesia exports the majority of its coal, but mandates that producers must set aside minimum amounts to supply the nation’s power plants.

The decision comes against a backdrop of surging demand, as an international post-pandemic economic growth drives electricity needs that cannot be met from less-polluting alternatives.

The International Energy Agency had last month said global demand for coal, the biggest source of greenhouse gases in the world, hit a record last year and will be sustained into this year, threatening plans set out at the COP26 climate change conference to cut emissions in 2021.

Indonesia exported almost 30 million tonnes of coal last January, according to the Central Statistics Bureau.

The export ban was imposed after coal miners failed to meet so-called Domestic Market Obligation (DMO), under which they are obliged to supply at least 25% of a mine’s approved production plan at a maximum sales price of US$70 (RM292) per metric tonne – less than half the global benchmark price.

The temporary export ban will prevent almost 20 power plants providing a total of 10.9 gigawatts of power from shutting down, said a senior official at the ministry, Ridwan Jamaludin, in a statement today.

He added that the government will re-evaluate the policy after January 5.

“We cannot let the companies’ disobedience to comply with the DMO disrupt the investment climate and the national economy.”

Indonesia has pledged to stop building new coal-fired power plants from 2023 and to be carbon neutral by 2060.

But despite an outcry from environmental activists, the current development of the Suralaya coal plant on Java is ongoing.

The enormous plant is one of the biggest in Southeast Asia and can power about 14 million homes a year. – AFP, January 1, 2022.