The polemic on Government Regulation (PP) Number 25 of 2024 concerning Amendments to PP Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining (Minerba) Business Activities is continuing.
One of the highlights is that there is a privilege for business entities owned by religious organizations to get a priority offer to manage coal mining land, the former owner of the Coal Mining Work Agreement (PKP2B), as stated in article 83A in the regulation.
In the context of national coal production, this gives wide space to exploit black gold. By including religious mass organizations in the mining business, it can trigger the increasing uncontrolled production of national coal production.
It must be acknowledged that Indonesia’s current energy needs are still very dependent on fossil-based primary energy sources, especially coal.
Based on the energy mix data from the National Energy Council (DEN) in 2023, coal still dominates, which is 40,46 percent. Followed by petroleum 30.18 percent and natural gas 16.28 percent.
The role of coal in supporting Indonesia’s energy supply and economy is difficult to deny.
The dominance of coal looks stronger when viewed from the national production of coal which has continued to increase in the last three years.
Based on data from the Ministry of Energy and Mineral Resources (ESDM), the realization of coal production in 2021 amounted to 606.28 million tons. This figure has increased by 40,59 million tons from the 2020 realization.
In 2022, coal production reached 685.8 million tons and continued to increase in 2023 with a reach of 770,83 million tons.
The realization even exceeded the set target, which was 694 million tons, and was recorded as the highest production in history.
Denying the Spirit of Energy Transition
The issuance of PP Number 25 of 2024 brought the spirit of coal exploitation and had great potential to trigger an uncontrolled increase in national coal production.
Of course, this is very disappointing from the perspective of a green and sustainable economy, especially the energy transition.
The spirit of exploitation in this government regulations is very contradictory to the position of Indonesia which is currently pursuing the achievement of energy transition. This will further distance Indonesia from the commitments that underlie the spirit and the target of energy transition.
At the international level, Indonesia is one of the countries committed to the Paris Agreement. Even the government is committed to realizing Net Zero Emission (NZE) sooner or earlier, namely in 2060.
At the national policy level, the spirit of energy transition is contained in the National Energy Policy (KEN) and the National Energy General Plan (RUEN).
But in its realization, the targets related to the energy transition are so difficult for the government to achieve. Even before the issuance of PP
Number 25 of 2024 which has the potential to significantly increase national coal production.
In PP Number 79 of 2017 concerning KEN, for example, the primary energy mix for coal in 2025 is targeted at least 30 percent.
Meanwhile in 2023, the coal energy mix is still at 40,46 percent. There is only a decrease of about 2 percent compared to 2022.
In PP Number 22 of 2017 concerning RUEN, the government is committed to controlling coal production of a maximum of 400 million tons starting in 2019. The number should decrease every year.
However, if you look at the realization of coal production that has continued to increase in the last three years, it is like being roasted from the fire.
In fact, when RUEN mandated coal production to a maximum of 400 million tons in 2019, in the same year, the realization of coal production actually reached 616.6 million tons and was the highest production record at that time.
This means that the government has failed to control coal production in accordance with the targets in the RUEN. Of course, this sets a bad precedent for the government in the spirit of energy transition.
Even so with the performance of Energy National Council, the institution responsible for national energy policy. In fact, this institution is led by the president and the minister of Energy and Mineral Resources as its daily chairman.
This assumption is further strengthened when comparing the target of 400 million tons in the RUEN with the amount of coal production in 2023, which is 770.83 percent. Really very far from the target.
“So far, this is the furthest away ,” something like that if you borrow a trending quote on Tiktok to describe this condition.
The government’s failure did not stop there. Failure to control production to achieve the RUEN target will continue in the following years. In fact, it is predicted that it will be even crazier than the previous year.
The government ensures that. In the next three years, production figures are projected to be above 900 million tons.
At the beginning of this 2024, the Ministry of Energy and Mineral Resources has approved the Work Plan and Budget (RKAB) for 2024 – 2026 which comes from 587 applications, with the total tonnage of coal production approved reaching 922.14 million tons in 2024; 917.16 million tons in 2025 and 902.97 million tons in 2026.
This figure does not include the number of potential coal mine production from the Mining Business License (IUP) which is currently still an exploration status or a business entity owned by a religious mass organization which is the implementation of the problematic PP Number 25 of 2024.
How Should It Be?
The government should be more aware of Indonesia’s position, which is very much in an energy transition period.
So that with that awareness, it is hoped that it can produce policies that support and further strengthen energy transition efforts.
Instead, it gives birth to rules that moderate increasing the amount of coal production such as PP Number 25 of 2024. Because it is contrary to the spirit and can hinder the energy transition.
Supposedly, the government focuses on targets that have not been achieved in the context of energy transition efforts. For example, the target in the RUEN mentioned above.
Focus on strengthening control of coal production in line with the spirit of energy transition. Instead of giving birth to policies that further distance realization from targets and have the potential to inhibiting the energy transition.
The former PKP2B land should no longer need to be exploited. This is to ensure that coal production does not increase amidst the situation of increasing national coal production which continues to occur every year.
At least, as a manifestation of the government’s seriousness in controlling coal production in favor of the energy transition commitment.
And the government should revoke PP Number 25 of 2024 which favors increasing coal production and is far from the energy transition commitment. In closing, I quote the speech of President Joko Widodo, who is also chairman of DEN, at the S20 High Policy Webinar on Just Energy Transition, 2022, to remind us of our commitment to realizing clean energy.
“We must encourage clean energy for all”- President Joko Widodo
Ariyansah NK
Indonesian Publish What You Pay (PWYP) researcher
This article has been published on June 13, 2024 on Kompas.com with the title “Government Regulation Giving Mining to Mass Organization Contradiction with the Spirit of Energy Transition”
Editor: Sandro Gatra