Jakarta. Indonesia plans to cut its coal production in 2026 as part of an effort to stabilize global prices after a sharp downturn fueled by oversupply, Energy and Mineral Resources Minister Bahlil Lahadalia said on Friday.

Bahlil confirmed that next year’s output will be lower than in 2025, though the final volume is still being calculated. “Yes, definitely. We are exercising the volume,” he told reporters at the ministry office in Jakarta, as quoted by state news agency Antara.

The Benchmark Indonesian Coal Price (HBA) for early November fell to $103.75 a ton, down from $109.74 in late October and below $114.43 a year earlier. Prices have slumped as supply outstrips demand: Indonesia exported 555 million tons of coal in 2024.

Indonesia is already tracking lower production this year. Director General of Mineral and Coal Tri Winarno expects output to reach around 750 million tons by the end of 2025, almost 100 million tons less than the 836 million tons produced in 2024. For 2026, Tri said production will be capped below 700 million tons, though the final figure is still being calculated.

"Production will be held back because coal prices have ‘collapsed,’” Tri said after a hearing with Commission XII of the House of Representatives in Jakarta on Thursday.

The government will prioritize domestic market obligation (DMO) supplies even as exports are curtailed. Bahlil said Indonesia may raise the DMO allocation above 25 percent for priority industries such as electricity, fertilizers and cement if supply tightens. The regulated coal price for power plants will remain at $70 per ton, unchanged since 2018. State utility PLN alone requires 140–160 million tons annually, making it the country’s largest coal consumer. 

“If domestic needs are still unmet, we will increase the DMO,” Bahlil said.

According to the International Energy Agency (IEA), global coal demand is expected to plateau from 2024 to 2027, reaching around 8.87 billion tonnes by 2027. While coal demand in advanced economies continues to shrink, this decline is expected to be offset by growth in a few emerging and developing economies, such as India, Indonesia, and Vietnam.