Indonesia has banned its coal export since January 1 due to a shortage of domestic use. However, after ten days, the government lifted the ban temporarily. It will allow them to continue supplying other Asian countries that depend on the fuel for energy.
As the world’s biggest thermal coal exporter, Indonesia shocked the energy industry with its decision to stop exporting coal. Because of the shortage of domestic use, the government decided to stop the export of coal for a while. After verifying adequate supply from mining and transport authorities, the country will give a “green light” to 14 vessels.
Indonesia Lifts Ban on Coal Export Temporarily
Indonesia has been the largest thermal coal exporter globally. It shocked coal-dependent countries when it announced a ban on coal export on January 1 due to a shortage in the level of local consumption.
However, after ten days of the ban, the Indonesian government decided to ease the restriction and gave the “green light” for export.
“As of today, after seeing a much better supply condition at PLN, 14 vessels that have already been fully loaded with coal and have been paid by the buyers, can be immediately released for export,” said Luhut Pandjaitan, Coordinating Minister of Maritime and Investment Affairs.
On Wednesday, the government will organize a review of whether to reject the ban on coal export. It will gradually do so, considering how the re-establishment impacts conformity with the Domestic Market Obligation (DMO) rules.
Asian Countries Request Indonesia to Lift Ban on Coal Export
The ban on coal export ensued after a report that the country already has low inventory levels. This increased worldwide coal prices last week. Additionally, it prompted Asian countries, such as the Philippines, to request the easing of the restriction.
The Philippines appealed to Indonesia to lift its ban on coal export. It said that the policy will substantially damage economies that heavily depend on coal for power generation.
Energy Secretary Alfonso Cusi made the appeal through a letter. It was sent to Indonesia’s Minister of Energy and Mineral Resources, Arifin Tasrif, the Department of Energy (DOE) through the Department of Foreign Affairs.
Cusi requested the foreign affairs department to intervene and request on behalf of the Philippines. Indonesia’s coal export ban had increased prices in China and Australia last week. This stranded countless vessels bound to deliver coal to major buyers in China, India, and South Korea.
The Philippines buys most of its coal supply from Indonesia. Sometimes, it buys more expensive coal from Australia and Vietnam. Its imported coal supply in 2020 is almost 70% of the 42.5 million tons. Last year, it imported 2.3 million tons of coal every month from Indonesia to run power plants.
Impact of Indonesia’s Ban on Coal Export
Indonesia’s coal export ban will have an adverse impact on Filipino consumers. According to P4P, it will create higher electricity rates, adding to consumers’ burden of paying bills. The Consumer rights and energy advocacy group is also concerned about the country’s power stability.
The Philippines imports 97% of its coal supply from Indonesia. So, if the ban on coal export persists, most Filipinos will rely on candles to light their houses at night.
“As we wait for the implications of Indonesia’s export ban to be reflected on our monthly bills just like last year’s energy crunch did, we can already be sure that more of such will happen in the future for as long as we insist on using fossil fuels even as our country’s vast indigenous renewable energy capacity waits to be harnessed,” said P4P convener Gerry Arances.
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