The Publish What You Pay (PWYP) Indonesia Coalition urges the government to immediately implement a policy to cut national coal production. The coalition insists that this policy must be positioned as a long-term strategy to end Indonesia’s dependence on fossil energy.
The plan to reduce production has emerged amid plunging coal and nickel prices driven by global oversupply. Minister of Energy and Mineral Resources Bahlil Lahadalia stated that Indonesia’s coal supply accounts for nearly 50 percent of global supply, or around 500–600 million tons out of the total world trade.
PWYP Indonesia National Coordinator Aryanto Nugroho said this situation should serve as a momentum to correct national energy policies that have long relied excessively on production expansion.
“The government should not be merely reactive when prices fall due to oversupply. If the motive is only to prop up prices so that state revenues are maintained, that is not a strategic policy, but merely market stock management,” Aryanto said in a written statement on Thursday, January 8, 2026.
He emphasized that production cuts should be pursued for environmental protection and the energy transition, not to safeguard corporate profit margins.
PWYP notes that Indonesia’s coal production, which reached around 800 million tons in 2024, is clear evidence of serious obstacles to the energy transition. Continued production expansion could weaken incentives for renewable energy development.
“Cutting production is imperative 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,” Aryanto said.
According to him, a gradual reduction in production to around 400 million tons, as mandated by the National Energy Plan (RUEN), must become a binding commitment in the national decarbonization roadmap.
Beyond production issues, PWYP believes this momentum must be used to overhaul governance in the mining sector, which has long been plagued by problems. Aryanto highlighted corruption loopholes in quota setting, land conflicts with Indigenous communities, and the large number of unreclaimed mining pits.
“Production cuts must go hand in hand with a large-scale audit of mining governance. Law enforcement and environmental oversight must no longer be sacrificed in the pursuit of production targets,” he said.
PWYP also warned of the risk of rent-seeking in the allocation of production quotas when output is restricted. “When production is cut, quotas become valuable commodities. This process must be transparent, accountable, and based on strict environmental compliance so that it is not monopolized by a small elite,” Aryanto said.
Furthermore, Aryanto stressed that fluctuations in global commodity prices are a serious warning of fiscal risks stemming from dependence on coal. The government must prepare economic diversification strategies, particularly in mining-dependent regions.
Therefore, PWYP Indonesia urges the government to ensure that production cuts are accompanied by a moratorium on new mining permits, the implementation of a just transition for workers and mining regions, and improved transparency of production and state revenue data. “This production reduction will answer whether we are truly transitioning or merely managing stock while waiting for prices to rise again at the expense of the environment,” Aryanto said.
Previously, Minister Bahlil stated that coal and nickel production would be cut in 2026. The move aims to maintain market prices, as coal prices are currently declining.
“The amount of coal traded globally is only around 1.3 billion tons. Indonesia supplies 500–600 million tons, nearly 50 percent,” Bahlil said at a press conference at his office on Friday, December 19, 2025.
According to Bahlil, excessive production causes commodity prices to fall. Meanwhile, businesses need to receive fair prices, while the state must also secure appropriate revenues.
Source: Tempo