The Indonesian government has set a coal export target of 457.3 million tonnes for 2023. This target is part of the coal production target of 694 million tonnes set by the government for 2023. Meanwhile, 236.7 million tonnes of coal will be allocated to meet domestic needs, or what is known as the Domestic Market Obligation (DMO).
Increased DMO Allocation to Anticipate the Covid-19 Pandemic.
Director of Coal Business Development from the Ministry of Energy and Mineral Resources (ESDM), Lana Saria, explained that increasing the DMO allocation in 2023 is intended to anticipate economic recovery due to the Covid-19 pandemic. “The DMO has increased due to the improvement in conditions from the pandemic. So we will reduce exports because domestic demand is increasing,” he said in a press conference on January 31, 2022.
Realization of Coal Production in 2022.
To compare, actual coal production in 2022 reached 687 million tonnes, which is equivalent to 103% of the production target of 663 million tonnes. A total of 206 million tons of coal production is used to meet domestic coal needs.
The European Market Contributes in Absorbing Indonesian Coal Exports.
Although still in small quantities, the European market also contributed to absorbing Indonesian coal exports. Countries such as Poland, Switzerland and several other countries are listed as coal importers from Indonesia, even though the amount imported is not more than 10 million tons.
Potential Demand from European and Indian Markets.
For 2023, potential demand from the European market is still wide open. Lana explained that several European countries have started coordinating with the Ministry of Energy and Mineral Resources. Although not sure how much coal volume demanded by these countries. Meanwhile, Lana also sees high demand opportunities from the Indian market, although there are still some obstacles, such as import regulations and logistical constraints. However, with stable economic development. The potential demand from India is very large and could become one of the target markets for Indonesian coal producers.