Indonesia's Economy
Coal Exports and the Energy Transition
How Indonesia became the world's largest thermal coal exporter, why its own power depends on coal, and the Just Energy Transition Partnership.
Indonesia is the world’s largest exporter of thermal coal.
Exports
- Major buyers include China and India.
- Coal is a large source of export revenue, booming when prices spiked in 2022.
Domestic power
- Coal generates most of Indonesia’s electricity.
- Captive coal plants power nickel smelters.
Energy transition
- In 2022, Indonesia agreed a Just Energy Transition Partnership (JETP) with rich countries, promising around 20 billion dollars to help cut coal use.
- Progress has been slow.
The dilemma
Coal brings revenue and jobs, but climate goals require phasing it down.
Domestic market obligation
Coal miners must sell a share of output at capped prices to the domestic power company PLN.
The Indian power plant
A coal plant in Gujarat burns imported Indonesian coal, which has lower ash than some Indian coal.
Thinking coal exporters can easily quit coal
Revenue, jobs and domestic power make it hard.
Key takeaways
- Indonesia is the largest thermal coal exporter.
- China and India are major buyers.
- Coal powers most of Indonesia's electricity.
- The 2022 JETP promised funds to cut coal use.
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