Key facts
- Indonesia's energy ministry confirmed no new coal export restrictions are planned.
- The government will focus on enforcing existing domestic market obligation (DMO) regulations.
- Recent temporary diversions of export shipments were made to address domestic supply shortages for state utility PLN.
- PLN has secured 141 million tonnes of supply against its 154 million tonne annual requirement, indicating a 13 million tonne gap.
- The DMO pricing regime, capping coal sold to utilities at $70/t, is cited by industry bodies as a cause of the supply crunch.
Indonesia's energy ministry has stated that the government does not intend to implement further restrictions on coal exports. The focus remains on ensuring compliance with existing domestic market obligation (DMO) regulations to meet the supply needs of the state-owned electricity company, PT Perusahaan Listrik Negara (PLN).
This clarification follows recent actions where some coal shipments destined for export were temporarily held back under presidential order to prioritize domestic supply for PLN's power plants, which have been experiencing shortages leading to blackouts in Java. The ministry emphasized that these diversions were temporary and adjusted based on PLN's operational requirements, with exports now proceeding normally as domestic supply conditions improve.
The ministry highlighted that a gap of 13 million tonnes exists in PLN's annual coal requirement, with 141 million tonnes secured against a total need of 154 million tonnes. Enhanced scrutiny of PLN's fuel procurement will be conducted by multiple government agencies and PLN itself to ensure DMO policy effectiveness.
Indonesia may also review its production quotas for the year in July. A new state-owned entity, Danantara Sumberdaya Indonesia, has been established to centralize coal exports, primarily for monitoring trades and preventing under-invoicing.
The current supply issue is partly attributed to a mismatch in coal quality, with medium-calorific value coal being diverted to the export market. Indonesia's 2026 production quotas have been reduced, further tightening supply. Industry bodies have pointed to the government's DMO pricing regime, which caps coal sold to utilities at significantly lower prices than the benchmark market rates, as a primary driver of the supply crunch, leading to proposals for price adjustments.