Indonesia to Levy Coal Export Duties in April

JAKARTA, Investortrust.id — The Indonesian government is preparing to tighten its grip on the world’s largest thermal coal trade, signaling a shift that could rattle global energy markets while padding the state’s coffers. Finance Minister Purbaya Yudhi Sadewa announced Thursday, March 26, 2026, that the administration of President Prabowo Subianto has approved a new export duty on coal, a move aimed at capturing a larger slice of the industry’s windfall profits.

The policy, which has already received the presidential nod, is currently undergoing final deliberations. "What is clear is that we will decide; the meeting is tomorrow," Purbaya told reporters. "The President has already approved a specific figure."

For the global energy sector, the timing is critical. If the final "tax levels" are hammered out during Friday’s sessions, the levy is slated to take effect as early as April 1, 2026. This fiscal maneuver serves a dual purpose: it acts as a stabilizer for the national budget (APBN) and a pressure valve for a domestic economy increasingly focused on self-sufficiency. In the lexicon of Jakarta’s technocrats, if global prices remain stubbornly high, the duty allows the state to "share" in the industry’s prosperity to increase national income.

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The move marks a definitive hardening of Indonesia’s "Domestic Market Obligation" (DMO)—a regulatory framework that requires miners to sell a portion of their output to local power plants at capped prices. Under President Prabowo, the DMO has evolved from a bureaucratic hurdle into a foundational pillar of national sovereignty.

Speaking at a plenary cabinet meeting on Friday, March 13, 2026, President Prabowo laid out a "nation-first" doctrine that extends beyond coal to other vital commodities like crude palm oil. "I emphasize here that all coal production is prioritized for the interests of our national needs," the President told his cabinet. "That applies to everything, including palm oil."

The End of the Export Free-for-All

The President’s rhetoric reflects a growing sentiment in Jakarta that Indonesia’s vast mineral wealth has long benefited private enterprises more than the public. "They are allowed to do business, but ownership belongs to the Indonesian nation," Prabowo said, backing a stern warning from Energy and Mineral Resources Minister Bahlil Lahadalia.

Minister Lahadalia has already begun wielding the industry's most potent stick: the Work Plan and Budget (RKAB) approvals. Without fulfilling domestic quotas, coal firms will find their export permits summarily blocked. "Our orientation is domestic consumption," Bahlil noted during the March 13 session, adding that his ministry is finalizing a ministerial decree to formalize this "domestic-first" allocation.

Supply Headwinds

The data suggests a tightening vise on supply. As of March 17, 2026, the Ministry of Energy has issued production permits for only 390 million metric tons (430 million short tons) for the year. This is a far cry from the government’s total 2026 production target of 600 million metric tons—a target that is itself a sharp 24% reduction from the 790 million metric tons produced in 2025.

Industry analysts suggest that the combination of lower production caps and new export duties could create significant headwinds for international buyers who have long relied on Indonesian coal. While the specific tariff rates remain under wraps, the Finance Minister hinted that the implementation could even be accelerated if global price volatility persists.

For a nation that has historically balanced the needs of its mining giants with the requirements of its state utility, Perusahaan Listrik Negara (PLN), the message from the Merdeka Palace is clear: the era of unchecked exports is over.

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