Indonesia raises tax targets for energy, mining sectors

Market: Coal, Electricity
27/03/25

Indonesia is aiming to collect higher non-tax state (PNBP) revenue from its energy and mining sector this year, with the country's energy ministry (ESDM) targeting 254.5 trillion rupiah ($15.4bn) for 2024, an 8.6pc increase on the year.

The ESDM collected Rp269.5 trillion in PBNP payments last year, surpassing the target collection by 15pc. The minerals and coal mining sector was the biggest contributor, with total revenue collected reaching Rp140.5 trillion, accounting for 52pc of the total. PNBP deposits from the mining and energy sector last year surpassed the 2024 target of Rp113.54 trillion, the ESDM said.

The ESDM aims to collect at least Rp124.5 trillion from the mineral and coal mining sector this year. The ESDM said the collections target was set conservatively, and it expects actual remittances to surpass this.

The ESDM is currently eyeing an increase in royalty rates for all mining sectors to help increase collections this year, a move that industry participants have decried as they claim that it will have a detrimental effect on business. Coal mining companies have called for the royalty rates to remain unchanged, especially since regulations that were recently implemented that affected their cashflows. They were referring to the use of the coal reference HBA price as an index for export sales, and the extension of the holding period for export proceeds to one year from three months previously.

The ESDM will run more frequent and stricter compliance audits on mandatory payments to ensure that PNBP collection targets are met, it said. This will be possible given the integration of the e-PNBP digital collections system with the Mineral and Coal Information System (Simbara), an inter-agency digital platform which allows for tighter monitoring of mining company operations, ESDM added.

Miners that fail to remit PNBP collections could be be flagged and penalties ranging from fines to business permit suspensions and terminations could be carried out, the ESDM said.

By Antonio delos Reyes

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29/04/25

German participants argue against power zone split

London, 29 April (Argus) — German power market participants have spoken out against dividing the German bidding zone, citing lower market liquidity and investments in renewable energies. The statements come after European transmission system operators (TSOs) association Entso-E yesterday published its bidding zone review (BZR), which concluded that splitting Germany's bidding zone into five would be the most "economically efficient". Germany's four TSOs argued that a bidding zone split would restrict liquidity in the futures market and could increase costs in the balancing market because fewer providers in smaller markets would participate. Renewables operators would probably see lower revenues, which could increase the need for subsidies, the TSOs said. And the economic gains from a split — around 1pc of system costs in 2025 — are not "meaningful". The TSOs also questioned the "suitability" of the study, citing "outdated" data and an "incoherent" analysis period. They highlighted the fact that the study compiled data from 2019, while the implementation of a split would only be possible by 2030, meaning developments in the system — including grid and renewables expansion — were not taken into account. Renewables association BEE agreed, adding that the BZR ignored several "key aspects", such as grid security, market efficiency, stability and the impact on the energy transition. The association highlighted the importance of strong German market liquidity, which enables "functioning" long-term power trading that is "crucial" for all of Europe. Traders' association Energy Traders Germany concurred, stating that a liquid market benefits consumers and businesses, as well as power plant investors. And exchange EEX told Argus that investments in power plants, which rely on "long-term framework conditions", would probably drop if the bidding zone were split. In the event of a split, subsidies and other compensation measures for industrial actors would probably need to be increased, EEX added. "All in all, it would end up being more expensive," the exchange told Argus . And chemical industry association VCI said reorganising the market would open up a "mega construction site" that would drag on for many years and create market uncertainty. A bidding zone split would make industrially strong regions into "high-price zones", energy association BDEW and automotive association VDA said, weakening competitiveness and prosperity. Instead of dividing the bidding zone, the focus should be on accelerated expansion and digitalisation of grids, they argued. The likely-incoming German government has pledged to stick to a single bidding zone , while economic ministry BMWK last year also rejected a bidding zone split , citing the complexity of the change, the risks to the competitiveness of industry centres, and lower liquidity. Germany's changing power system In the BZR, Entso-E advises assessing "the impact of the change of key influencing factors between 2025 and a potential implementation date around 2030", including grid expansion, before reconfiguring bidding zones. Germany's power mix in 2024 was much changed from 2019. In 2019, solar and wind output made up just under a third of the mix at an average of 19GW. By 2024, their share had risen to just under 46pc, with output averaging 23GW. And owing to the government-mandated phase-out, nuclear generation's share of the mix fell to zero by 2024 from just under 14pc in 2019, when Germany had 9.5GW installed nuclear capacity, according to Fraunhofer ISE data. Meanwhile, the share of coal and lignite-fired output dropped by around 2.6 and 3.9 respective percentage points from 2019 to 6.3pc and 16.3pc in 2024. Around 2.8GW and 10.3GW of coal and lignite-fired capacity, respectively, was taken off the open market in 2019-24 as part of the country's coal phase-out, according to data from grid regulator Bnetza. But gas burn in 2024 was around 1GW up from 2019, climbing to just over 12pc of the mix against 8.7pc five years earlier. And Germany's mix is likely to become even more renewables-heavy in the following years as it is set to phase out a further 6GW of dispatchable capacity by the start of 2030. The coal and lignite phase-out deadline is set for 2038, although market participants have recently called the date into question, owing largely to delays to the long-awaited power plant strategy. Owing to rapid solar buildout, solar generation in 2030 could average 16.2GW, according to Argus calculations. This would be 9.2GW up from 2024. And while onshore wind expansion lags in comparison, generation in 2030 could average 16.6GW, which would be around 4GW up from last year. German grid expansion is progressing rapidly, with 1,400km of power lines approved last year, a record. The four main projects aiming to address poor north-south interconnectivity — namely the 4GW Suedlink, 4GW Suedostlink, 2GW A-Nord and 2GW Ultranet lines — are set to come on line between the end of 2026 and 2030. German demand in 2024 was around 4GW lower than in 2019, largely owing to slowing production in energy-intensive industries, which has declined since December 2021. Recent US tariffs on imports have triggered further economic insecurity in industry, while BMWK earlier this month said it expects industrial activity in the coming months to "weaken". While economic growth is expected to increase by 1pc next year, according to BMWK, demand is unlikely to recover to pre-Covid and pre-energy crisis levels unless conditions improve for energy-intensive industries. By John Horstmann and Bea Leverett DE power mix 2019 % DE power mix 2024 % Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump return complicates climate talks: Cop 30 head

29/04/25

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29/04/25

Trump return complicates climate talks: Cop 30 head

New York, 29 April (Argus) — This year's UN Cop 30 climate talks will proceed with a key goal of scaling up climate finance, but US president Donald Trump's disruptive return to the White House has made efforts to reduce emissions more challenging, according to the Brazilian official leading the summit. Continuing the fight to reduce greenhouse gas (GHG) emissions "is going to be a slightly uphill battle, but I think it's the right one," Brazil climate secretary and Cop 30 president André Corrêa Do Lago said Tuesday at the BNEF Summit in New York City. "The international context could help a little more", Corrêa Do Lago said, drawing laughter from the audience. Trump moved quickly after beginning his second term to withdraw the US from the Paris Agreement, an exit that will formally take effect in January 2026. He has started to impede US development of renewable energy projects he sees as boondoggles, but he is facing challenges to his attempts to halt government funding and tax credits for the sector. It is unclear if the US will send a delegation to the Cop 30 summit this year, which is scheduled to take place in Belem, Brazil, in November. Corrêa Do Lago said that invitations have not yet been sent to prospective participants. He also made a distinction between the US government and others in the US, including state and businesses leaders, that have pledged to continue supporting GHG emissions reductions even as the Trump administration moves to boost oil and gas. Publicly, countries have not changed their tune on climate in response to the US policy shifts. But Corrêa Do Lago said that privately there are "some that say, ‘God, how am I going to convince my people that I have to try to lower emissions if the richest country in the world is not doing the same?'" Corrêa Do Lago said that this year's summit needs to focus less on technical negotiations over documents that might never be implemented as a result, and more about making an economic appeal for decarbonization and hosting more of a "Cop of solutions, a Cop of action". He reiterated the Brazilian government's goal of increasing climate financing for developing countries from the target set at Cop 29 of $300bn/yr by 2035 to the far higher target of $1.3 trillion/yr. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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India’s TSPL starts up torrefied bio-pellet plant

29/04/25

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29/04/25

India’s TSPL starts up torrefied bio-pellet plant

Singapore, 29 April (Argus) — India's private sector utility Talwandi Sabo Power (TSPL) has set up a torrefied bio-pellet manufacturing facility in the northern state of Punjab, to ensure steady biomass supply to its 1.98GW coal-fired plant. The pellet plant has a capacity of 500 t/d or 182,500 t/yr of torrefied bio-pellets, and use agricultural stubble or residue as feedstock, according to TSPL, a unit of mining conglomerate Vedanta. The Punjab region generates around 15-20mn t/yr of crop stubble, according to TSPL. The plant had already purchased over 800,000t of agricultural stubble, which it will convert to around 640,000t of torrefied bio-pellets. The utility is also targeting to reduce "5pc use of coal daily" by replacing the fuel with torrefied bio-pellets. TSPL also co-fires 450 t/d of torrefied biomass that is purchased from other suppliers in the open market. The utility typically seeks torrefied pellets made from agricultural residue with a minimum of 50pc raw material from stubble, straw, or crop residue from rice paddy. The gross calorific value of pellets procured for its plant usually ranges between GAR 3,400-5,000 kcal/kg. Vedanta's aluminium unit had also used biomass briquettes for power generation. Its alumina refinery in Lanjigarh, Odisha consumes about 20 t/d of biomass briquettes, according to Vedanta. The briquettes are made from agricultural residue sourced from farmers in India. By Nadhir Mokhtar Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Environmental markets wary of Trump's next moves

28/04/25

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28/04/25

Environmental markets wary of Trump's next moves

Houston, 28 April (Argus) — US President Donald Trump's recent threat of legal challenges against state climate and clean energy policies has roiled environmental markets waiting to learn the scope and avenues those confrontations could take. Trump's 8 April executive order, which directed the Department of Justice (DOJ) to consider contesting state policies that threaten "American energy dominance", targeted California's cap-and-trade program by name, but it may also extend to other policies, including renewable portfolio standards (RPS). But uncertainty about the extent of the administration's ambitions has injected another variable into an already volatile economic landscape. Market anxieties may not fade soon. US attorney general Pam Bondi has until early June to report on actions she has taken and make recommendations for other steps by the White House or Congress. Conservatives in some states already have asked her to scrutinize particular programs. Administration arguments One angle from which the DOJ could attack state programs is the well-trod "dormant Commerce Clause", a legal doctrine that says state laws cannot discriminate against or impose undue burdens on another state's economic activity. But such a challenge is more difficult if a program is merely stipulating, "if you want to come to our state, our electricity market or our fuel market, here are the rules to play by", according to Matthew Dobbins, a partner at Vinson & Elkins and member of the law firm's environment and natural resources team in Houston. Courts have dismissed lawsuits that tried this approach against low-carbon fuel standards in California and Oregon , as well Colorado's RPS. In addition, an appeals court last year threw out a case against Washington's cap-and-invest program, ruling it did not overstep in its handling of in-state versus out-of-state electricity suppliers. The US Supreme Court may soon decide whether to hear an appeal of the case. More broadly, a 2023 Supreme Court decision upholding a California law restricting interstate pork sales based on animal treatment makes such dormant Commerce Clause challenges "a lot harder", according to Nico van Aelstyn, partner at Sheppard Mullin in San Francisco. The DOJ could try using the "Equal Sovereignty" doctrine, which stipulates that one state's rights cannot exceed another's, van Aelstyn said. This has been used in cases against California's vehicle emissions standards and other states' climate "superfund" laws, which penalize oil and gas companies for historical emissions. But van Aelstyn described it as "not really tested yet." That administration has also been hoping to fast-track Supreme Court rulings on the executive orders by justifying them through "declared emergencies," according to Dobbins. This use of emergency powers will likely reveal how far the court will go to "pressure test" the administration's requests for speedy judicial relief, as justices work through a growing emergency docket through the end of term in June or July. Relitigating the past Amid growing trade tensions between the US and Canada, the DOJ could also revive a 2019 lawsuit against California's cap-and-trade program. A US district court at the time ruled that federal purview over foreign affairs does not preempt the state linking its program with Quebec's. Although the first Trump administration appealed the ruling, former president Joe Biden withdrew the case, leaving the matter undecided with one claim potentially still ripe for judicial review. "What that'll probably come down to is how much Canada has expressed its anger . . . and if the administration is willing to go 'all in' on trying to provoke one of our largest trading partners," Dobbins said. But even if California severed ties with Quebec, the province is a small part of the market, and its absence is unlikely to cripple the state's program. Meanwhile, in the markets… Trump's executive order has put states and US companies alike on the back foot, adding to a "shock and awe" barrage from tariffs and potential rollbacks to federal clean electricity incentives , said Tom Harper, a partner on consultant Baringa's energy advisory team in New York City. That volatility has led clean energy developers and buyers to hold off on decisions until they have a bit more stability. "You're almost in a state of paralysis because you can't go and deploy a team on a project. You can't go and arrange finance because the cost is moving day to day," Harper said. The tariffs have also fed growing concerns about the US economy, which have spilled into environmental markets. The California Carbon Allowance (CCA) market, already a bit bearish because of ongoing delays to planned program changes, plunged the day after Trump's executive order. Argus assessed CCAs for December delivery that day at $26.74/t — at the time their lowest price since November 2022. The lack of certainty around federal legal developments continues to whittle away at bullish signals, leaving market participants to wait for a clear outcome. Adding another layer of uncertainty is the fact that disputes may spill outside of the court system. Following the same logic as of Trump's " national energy emergency ", the US Federal Energy Regulatory Commission (FERC) could hypothetically issue an emergency order to halt carbon and clean energy programs. The recent resignation of a Democratic commissioner, giving Trump the ability to install a Republican majority, could facilitate that pathway. But using FERC to shutter these programs would be on weak legal footing, van Aelstyn said. The Trump administration has no issue using extrajudicial tools to enforce its policies, such as its January pause on federal funding that left states like California — which receives more than $100bn in backing and grants from the US government each fiscal year — grappling with potential budget holes. Two federal courts have said the administration must dole out the funds, but agencies have been slow to comply. "If they can withhold congressionally appropriated research funds for universities because they don't like their policies with regard to free speech on their campuses, what else might they do?" van Aelstyn said. "Withhold Medicaid funding to states where they don't like their renewable energy standards?" By Denise Cathey and Patrick Zemanek Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump works to blunt renewables growth

28/04/25

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28/04/25

Trump works to blunt renewables growth

Washington, 28 April (Argus) — US president Donald Trump has started to impede development of renewable energy projects he sees as boondoggles, but he is facing challenges to his attempts to halt government funding and tax credits for the sector. Trump has attacked wind turbines and solar projects as part of a "Green New Scam" that should not be built, based on his preference for the fossil fuel-fired and nuclear power plants he says are more reliable and affordable. Trump selected a cabinet of like-minded individuals who oppose renewables and see little urgency to address climate change. He was elected to end the "nonsense" of building renewable resources that are heavily subsidised, make the grid less reliable and raise costs, energy secretary Chris Wright said in an interview on Earth Day. Interior secretary Doug Burgum on 16 April ordered Norwegian state-controlled Equinor to "immediately halt" construction of the 810MW Empire Wind project off New York. Trump had already ordered a freeze on future offshore wind leases , and suspending Empire Wind's permits is likely to spook investors even outside the renewables sphere. To reverse course on a fully permitted project is "bad policy" that "sends a chilling signal to all energy investment", American Clean Power Association chief executive Jason Grumet says. The US last week separately said it would impose anti-dumping duties on solar components imported from four southeast Asian countries that will range from 15pc to 3,400pc. Those duties — in effect from June to support US solar manufacturers — will be in addition to a 10pc across-the-board tariff the US imposed this month on most imports. Solar industry groups have said that steep import duties will make new installations unaffordable, stunting the industry's ability to grow. Trump has had less success in his push to axe support for renewables approved under Joe Biden. On 15 April, a federal judge ordered the administration to unfreeze billions of dollars for clean energy projects provided by the Inflation Reduction Act (IRA) and 2021 infrastructure law. The administration lacks "unfettered power to hamstring in perpetuity two statutes", judge Mary McElroy wrote. In a separate ruling on 15 April, judge Tanya Chutkan prohibited the administration from suspending $14bn in grants distributed to nonprofits under the IRA for a greenhouse gas reduction programme. The administration is appealing both rulings. Targeting the windfall Trump could further undermine the growth of renewables by convincing Republicans in Congress to use an upcoming filibuster-proof budget package to repeal or narrow the IRA's tax credits for wind, solar and other clean energy projects. Critics of that law see the potential for $1 trillion in savings by repealing its tax credits, which could offset the costs of more than $5 trillion in planned tax cuts. But there appear to be enough votes in each chamber of Congress to spare at least some of the IRA's energy tax credits. In the Senate, where Republicans can only afford to lose three votes, Alaska's Lisa Murkowski and three other Republicans signed a joint letter this month saying "wholesale repeal" of the tax credits would fuel uncertainty and undermine job creation. In the House of Representatives, where Republicans have a similarly slim majority, 21 Republicans voiced concerns earlier this year about repealing all of the tax credits. Renewables are on track to overtake natural gas as the largest source of US electricity by 2030 — assuming the tax credits and climate rules enacted under Biden remain intact — the EIA stated this month in its Annual Energy Outlook . The amount of power from renewables under the EIA's existing policy baseline by 2035 will increase by 135pc to 2.8bn MWh, while gas-fired power will decline by 14pc to 1.6bn MWh over the same time period. By Chris Knight Baseline US net power generation Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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