Jakarta. Energy and Mineral Resources Minister Bahlil Lahadalia recently said that Europe was still using Indonesian coal to generate electricity, as he defended the government's decision to continue using the black combustible rock.

In addition to the continued domestic use of coal, Indonesia is trying to make sure that its export-bound coal is sold at a good price. Bahlil revealed that Indonesia mulls restricting its exports should exporters not follow the price that the government has set. Speaking at a press briefing in Jakarta, Bahlil was responding to a question on what he thought of US President Donald Trump’s decision to withdraw Washington from the Paris climate accord. The minister then went on to say that many people “were under the assumption that Europe had ditched coal, but that’s not the case.”

“I’m not gonna say who, but there are several European countries that are still buying Indonesian coal to this day. They are not even [importing] our coal for industrial use. Some are still using our coal for power generation. And these countries are behind the Paris Agreement,” Bahlil said on Monday.

He added: “So don’t be fooled, … and now we have Trump out [of the accord].” 

The Paris Agreement sets out a legally binding international treaty in which countries pledge to limit global warming to 1.5 degrees Celsius.  All European Union (EU) nations as well as Indonesia have ratified the agreement. According to Bahlil, Indonesia is open to early retirement of coal-fired power plants only if it receives financing. As a case in point, Indonesia is still on board with the plan to retire its 660-megawatt Cirebon-1 coal-fired plant seven years earlier than scheduled. In late 2023, the Asian Development Bank (ADB) announced that it would back its early retirement.

“[The Cirebon-1 plant early retirement]  is possible because someone is financing it. Our calculations also show that it is economically feasible. So we don’t mind early coal plant retirement as long as there is funding and its plan does not burden the country, people, and the [state electricity firm] PLN,” Bahlil said.

Government data shows that Indonesia produced 836 million tons of coal in 2024. About 233 million tons went to the domestic market obligation which mandates coal producers to allocate a portion of their output to meet the energy needs at home. Indonesia exported 555 million tons of coal that year, up from 518 tons recorded in the previous year. The country saved 48 million tons for stock. The ministry data, however, did not list the export destinations of Indonesian coal that year.

Possible Export Restriction
Despite the growing coal exports, prices remain low. The price of Indonesian coal has been dependent on a number of indexes, including the Indonesian Coal Index (ICI). Every month, the Energy and Mineral Resources Ministry sets a benchmark price to determine the royalty rates and selling price of coal. Indonesia had set a high-grade coal benchmark price of $124.01 per ton for January. ICE Newcastle data shows coal prices averaged at around $118.5 per ton last month. 

“Our coal makes up to 35 percent of the global supply, … so our coal-related policies will have a huge impact on the world especially if we decide to restrict our exports. We have not done that, but we might change our mind if our price keeps coming under pressure,” Bahlil told reporters.

He added: “We are planning to draft a ministerial decree to make sure that [exporters] use our coal benchmark price for [the transactions in] global markets. We will come up with ways to force companies to follow these rules. If necessary, we have no choice, but to revoke their export permit.”