KOMPAS.com — The Publish What You Pay (PWYP) Indonesia Coalition believes that the government’s discourse on cutting coal production must become a momentum to accelerate the energy transition. PWYP Indonesia National Coordinator Aryanto Nugroho urged the government not to take this decision merely because coal prices are falling.
Moreover, production cuts should have been implemented long ago in accordance with the National Energy Plan (RUEN).
“We need a transformative vision to cut production in order to protect the environment and accelerate the energy transition, not merely to save corporate profit margins,” Aryanto said in a statement on Wednesday (January 7, 2026).
According to him, coal production surging to as high as 800 million tons in 2024 is clear evidence that Indonesia’s domestic energy transition has been stalled. Such massive production, he added, weakens incentives to shift toward renewable energy.
“Cutting production is a necessity to achieve the Net Zero Emissions target. We cannot talk about an energy transition if upstream coal supply continues to be ramped up without control,” he said.
As mandated by the RUEN, reducing coal production to 400 million tons must be made a binding commitment in Indonesia’s decarbonization roadmap.
“This is a concrete step to align energy policy with global climate commitments,” Aryanto added.
Governance issues
PWYP Indonesia noted that the increase in coal production to date has been accompanied by various unresolved governance problems. These include corruption loopholes in quota setting, land conflicts with Indigenous communities, and the large number of unreclaimed abandoned mining pits.
The government is therefore urged to conduct a governance audit of the mining sector.
“This momentum must be used to clean up illegal mining practices and ensure that companies allowed to continue operating truly meet strict compliance standards, without compromise,” Aryanto said.
In addition, PWYP Indonesia warned of corruption risks behind policies on production quota allocation. When production is cut, quotas become scarce and valuable.
“This creates potential rent-seeking in the lobbying process for production quotas. The cuts must not become a tool for a small elite to retain production privileges,” he said.
Aryanto emphasized that the production cut process must be carried out transparently, accountably, and in strict compliance with environmental criteria.
The government’s plan to reduce coal production is driven by the sharp decline in coal and nickel prices due to global oversupply.
Previously reported, the government plans to lower nickel and coal production targets in the 2026 Work Plan and Budget (RKAB). This step is intended to boost commodity prices that have been under pressure from excess supply. Minister of Energy and Mineral Resources Bahlil Lahadalia said the cuts would be applied across the board.
“We are cutting everything. Not only nickel, but coal will also be cut,” Bahlil said after a press conference on the readiness of the energy and mineral resources sector for the 2025 Christmas and 2026 New Year holiday period in Jakarta on Friday (December 19, 2025).
According to Bahlil, the production target cuts aim to restore balance between supply and demand. Excessive supply, he said, has continued to weaken commodity prices.
Coal prices, for example, have declined amid global trading volumes of around 1.3 billion tons, of which Indonesia supplies approximately 500–600 million tons.
Source: Kompas Lestari