Indonesia's Coal Industry Pressured to Diversify Amid Declining Exports

Indonesia's coal industry faces challenges as China and India reduce imports. While coal remains vital to Indonesia's economy, its reliance on major exporters like China and India presents risks. The industry must diversify toward cleaner energy to avoid a costly future transition amid regulatory and financial constraints.

Indonesia's coal sector is under increasing pressure to diversify as China and India, its primary export markets, reduce coal imports, according to a report by the Jakarta-based think tank, Energy Shift.

The report highlights that the coal industry, contributing around 3.6% to Indonesia's economy, must pivot to cleaner energy alternatives to prevent a costly transition in the future.

Despite record coal production, Indonesia faces risks from its reliance on key buyers and regulatory constraints, as well as inconsistent government policies on emissions and energy transitions.