Jakarta – The issue of national coal management in recent times has been in the spotlight and a topic of discussion from various parties. For example, the annual production quota, export incentives, price-fixing, and the obligation to supply the domestic market (domestic market obligation), increased value-added, to coal in the context of the energy transition. Publish What You Pay Indonesia held a multi-stakeholder online discussion with the theme “Energy Transition and National Coal Management Strategy: Policy – Implementation – Opportunities – Challenges” on Thursday (30/9). The discussion was attended by several resource persons: Cecep Yasin, Coordinator of Minerba Production and Utilization Planning, Directorate General of Mineral and Coal, Ministry of Energy and Mineral Resources (KESDM); Hendra Sinadia, Executive Director of the Indonesian Coal Entrepreneurs Association (APBI); Elrika Hamdi, Energy Finance Analyst, Institute for Energy Economics and Financial Analysis (IEEFA); Christianus Benny, Head of the ESDM Office of East Kalimantan Province; Frenky Simanjuntak, PWYP Indonesia Researcher; and Radikal Lukafiardi, PWYP Indonesia Researcher.
Aryanto Nugroho, National Coordinator of PWYP Indonesia, opened the discussion by seeing that the energy transition and national coal management strategy need to look at various perspectives, not only from the government but also from all stakeholders so that the policy-making process in the energy transition is expected to be fair and sustainable.
“It is hoped that this multi-stakeholder forum will provide progress in the future and make discussions more interesting in the context of accelerating the energy transition. On the other hand, energy needs in Indonesia are still being met and will not shut down the domestic energy industry and will not have a negative impact on energy availability in the future,” said Aryanto.
Frenky Simanjuntak, at the beginning of the discussion, revealed that the projection of energy reserves in Indonesia has the potential to run out in the future. This can also be seen as the latest developments in the world today, namely how coal investment is also decreasing due to the lack of investor interest in investing in this energy sector.
“In principle, that there are three things that need to be considered, first: national energy policy should pay attention to aspects of coal reserves that are likely to run out in the next few decades, so whether it is still relevant to use coal as the main energy reserve, second: coal phasing out needs to be considered for the National Energy Council and related stakeholders on how to respond to the changes that occur, third: they should act now regarding carbon emissions,” said Franky.
“Our national energy mix is still dominated by fossil energy, and coal has a dominant proportion, and the trend continues to increase, but Indonesia has committed to reducing carbon emissions by 29% by 2030 through the Nationally Determined Contribution (NDC), only in the context of the energy transition. So, in the future, Renewable Energy should have a bigger share in the national energy mix compared to fossil energy,” said Radikal Lukafiardi.
Radikal also stated policy recommendations from the results of the study that could be proposed, namely: coal production control policies must be implemented consistently and supported by effective policies in controlling control over production quotas proposed by business actors, setting coal production targets through a top-down mechanism. which is then reduced to a quota per region/region taking into account the balance of reserves, domestic needs, and the environment, the effective implementation of DMO needs to be supported by the issuance of clear and consistent regulations, including a monitoring mechanism and the application of strict sanctions for those who do not meet DMO needs, tightening and supervision of coal exports must be further enhanced, so that revenues and foreign exchange are effective in supporting the economy but not causing prolonged dependence.
“This energy transformation can, of course, be carried out by any industry if the technology used is economical and visible, so that not only coal mining seeks to make an energy transition but every industry may compete in carrying out this transformation, but on the contrary if not economically, there will be obstacles later,” said Hendra Sinadia
Although basically the development of renewable energy requires technology that is quite capable with a relatively expensive price and is still produced from abroad, it’s just that there have been several forms of efforts made by Indonesia in coal processing by increasing added value or what is often called “downstreaming”. This increase in added value or downstreaming may still be relatively slow because business actors need adequate fiscal or non-fiscal support in the long term, namely since the issuance of Law no. 3/2020 and Law No. 11/2020 as a form of incentive for the development of coal downstreaming.
“As we know, coal contributes a lot to state income, but it’s time for us not only to look at the extractive world, but to push to another industrialized world that is cleaner and service-oriented market so that Indonesia does not only get income from the extractive industry, and this applies not only to the central government but also to the provincial and district/city governments,” added Elrika Hamdi.
Data from the Ministry of Energy and Mineral Resources states that 86% of coal reserves are medium and low-calorie coal, with resources of 145.7 billion tons and reserves of 38.8 billion tons. However, low-calorie coal in Indonesia as much as 33% of Indonesia’s total coal reserves is still not utilized optimally. Cecep, a representative from MEMR, said that Indonesia’s coal production will still be stable at 650 until 2030 due to increasing domestic demand and will experience a decline afterward as global demand declines due to the energy transition. In Indonesia, coal itself is still the primary energy that is still widely used.
“Currently, the government is still focused on preparing steps in planning and managing this energy transition, including setting a strategy so that the transition can continue to provide opportunities for the economy,” said Cecep Yasin.
In the regional context, Christianus Benny stated that East Kalimantan Province seeks to maximize the utilization of NRE potential and the implementation of energy conservation, namely by 2025 the new and renewable energy mix will reach at least 12.4% based on the RUED target of East Kalimantan Province. In addition, another target is the 100% electrification ratio of East Kalimantan Province by 2025, where all villages in the border areas have electricity with a supply of at least 600 watts of electrical energy per day and ensure the availability of electricity for industrial areas, especially the Bontang, Kariangau, and Maloy Batuta.
The discussion closed with the hope that the energy transition that will take place and will soon be implemented will not only focus on technical and financial matters but also on the opportunities and challenges of the energy transition to realize sustainable and equitable national energy independence. (RJ)