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Accelerating Coal Downstreaming, Government Prepares Additional Incentives

Fri 06 Oct 2023, 09:00 AM



Indonesia's coal production in 2022 reached 687 million tons, an increase when compared to coal production in 2021. Coal production in 2022 is used to meet domestic needs as much as 215 million tons, one of which is as a supply for the needs of coal-fired power plants, while some are marketed abroad.

Even though coal production has increased, Acting Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, Bambang Suswantono, revealed that according to the Roadmap to Net Zero Emission (NZE) scenario, coal production will decline in 2030.

"The decline in coal production is due to a decrease in coal export numbers, as well as the need for coal as raw material for electricity generation, along with the increase in raw materials from New Renewable Energy (EBT) to become a source of electricity generation," explained Bambang.

Therefore, Bambang said that one of the strategies for utilizing coal is coal downstreaming, in line with the Indonesian President Joko Widodo's program of downstreaming industry to achieve a golden Indonesia by 2045, so that it will provide added value to the products produced.

Coal can be processed into derivative products, both as industrial raw materials and energy sources such as Dimethyl Ether (DME), Methanol, Synthetic Gas, Hydrogen and Ammonia. Currently, several downstream coal industries have been completed, namely coal briquettes, coke making, and coal upgrading.

To support coal downstreaming, Bambang said that the government is providing three incentives for companies that are committed to carrying out coal downstreaming, namely by reducing special coal royalty rates. for coal gasification to 0%, then setting special coal prices to increase added value (gasification) which is carried out at the mine mouth.

"The third incentive is that the validity period of the coal mining business permit specifically for coal for gasification is given in accordance with the economic age of the coal gasification industry," he said.

Image source:

Source: Hilirisasi Batubara Pemerintah Siapkan Insentif Tambahan


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