Indonesia's coal sector is experiencing a complex transformation in 2025, marked by strategic production adjustments, market dominance, and evolving global trade dynamics. According to Databoks, Indonesia is projected to control 50% of the global thermal coal export market, solidifying its position as the world's leading thermal coal exporter.
Production and Export Landscape
The Indonesian government is strategically recalibrating its coal production and export strategy. The Ministry of Energy and Mineral Resources is considering increasing the Domestic Market Obligation (DMO) from 25% to over 30%, signaling a shift towards prioritizing domestic energy needs. The indicative coal production target for 2026 is set around 600 million tons, a significant reduction from the estimated 800 million tons in 2025.
Trade and Revenue Dynamics
Indonesia's trade surplus reached $41.05 billion in 2025, a 31.03% increase from the previous year. However, the coal sector has experienced challenges, with export revenue declining from $30.49 billion in 2024 to $24.48 billion in 2025, and export volumes dropping by 3.66% to 390.93 million tons.
Market Positioning and Challenges
Despite challenges, Indonesia maintains a strong market position. Asian coal imports decreased by 4.4% in 2025, but China's domestic coal production reached a record high of 4.83 billion tons. This suggests a complex global coal market with shifting dynamics between domestic production and international trade.
Conclusion / Bench Energy View
Indonesia is strategically navigating the global coal market by balancing export opportunities with domestic energy security. The government's approach of potentially increasing domestic market obligations, controlling production, and maintaining market dominance indicates a sophisticated energy policy aimed at long-term sustainability and economic optimization.