Indonesia does not plan to introduce additional restrictions on coal exports, with the government focused on enforcing existing regulations to meet supply requirements of state-owned utility PT Perusahaan Listrik Negara (PLN), the energy ministry (ESDM) said.
"There is no new proposal to introduce additional restrictions, as the necessary regulatory framework is already in place," the ministry told Argus on 26 June. Authorities will instead ensure "effective implementation" of provisions under the domestic market obligation (DMO).
The response comes after energy minister Bahlil Lahadalia said on 25 June that some coal shipments earmarked for export were being held back on the direct order of President Prabowo Subianto to prioritise domestic supply to PLN's power plants to address shortages at state-owned utility PLN that have triggered blackouts across Java. The minister's comments revived memories of late 2021, when a similar supply crunch prompted a full export ban in January 2022, jolting global coal markets.
The Directorate General of Mineral and Coal (Minerba) had temporarily withheld certain export shipments to ensure the availability of coal with the required calorific value for PLN's primary energy needs. "The volume of exports temporarily withheld was adjusted based on PLN's operational requirements," the ministry said, adding that with domestic supply conditions now improving, coal exports are proceeding normally.
The temporary export diversion took place as part of the regulatory oversight function, ESDM said, rather than as a punitive or market-wide measure. The move to hold back some coal exports in favour of domestic supply has injected fresh uncertainty into the seaborne market with lingering concerns on more shipments making way to meet PLN's growing demand, especially during the peak summer season with the El Nino weather pattern aggravating the temperatures and power consumption.
Supply contracts totalling about 141mn t has already been secured against PLN's total annual requirement of 154mn t, leaving a 13mn t gap, ESDM said, reiterating a shortfall acknowledged by the minister on 25 June. PLN's primary energy procurement would be subject to enhanced scrutiny to ensure its fuel requirements are met, ESDM said. The oversight would be undertaken by authorities including representatives from the Financial and Development Supervisory Agency (BPKP), ESDM, the Directorate General of Mineral and Coal, and PLN.
"Such oversight is a normal and necessary regulatory function to ensure that the DMO policy is effectively implemented, particularly in securing coal supply for PLN's primary energy requirements," the ministry said.
The enhanced scrutiny comes as Jakarta scrambles to address shortages at PLN that have triggered blackouts across Java. It would add to a series of measures taken by the government to boost its oversight of the sector including coal producer's DMO performance. Indonesia might also review this year's production quotas, or RKABs, in July, according to market participants.
The regulatory steps extend beyond domestic supply. Indonesia has set up a state-owned entity, Danantara Sumberdaya Indonesia, to centralise coal exports, although authorities later clarified that the company would mainly focus on monitoring trades to prevent under-invoicing. All exports are expected to be channelled through the new entity, in line with the original plan announced last month.
Quality vs quantity
The current shortage stems less from an absolute lack of supply than from a mismatch in coal quality. The gap lies specifically in medium-calorific value (CV) coal above GAR 5,000 kcal/kg, which PLN uses to blend with lower-grade supply to maintain boiler performance, Bahlil said. While DMO volumes appear sufficient on paper — with 180mn–190mn t allocated and 160mn–170mn t committed — domestic deliveries have been skewed toward lower-CV coal, with mid-CV material likely being absorbed by the export market.
Indonesia's 2026 production quotas, or RKABs, were cut to around 600mn t from 817mn t in 2025, tightening overall supply headroom and adding pressure on availability of specific grades for the domestic market. Indonesia exported 151.1mn t of all types of coal in January-April, down by 6.9pc from a year earlier, while output in the first four months of 2026 is estimated at 230mn–235mn t, down from a revised 250.5mn t in the same period of 2025.
Industry bodies point to the DMO pricing regime as a root cause of the supply crunch.
The government caps coal sold to power utilities at $70/t for GAR 6,322 kcal/kg — a level unchanged since 2018 — while the benchmark HBA price for the same grade currently stands near $124/t. For medium-grade coal, the effective DMO price falls to around $35–40/t against an HBA benchmark of roughly $60/t, leaving producers with negligible or negative margins on compliant supply.
The Indonesian mining professionals' body, Perhimpunan Ahli Pertambangan Indonesia (Perhapi), has proposed raising the DMO price to $80–90/t, while the Indonesian Coal Mining Association (APBI) has called for a periodic adjustment mechanism linking DMO prices to a percentage of the HBA.
