Indonesia has ended a ban on coals exports. Only coal exporters that have complied with the DMO (domestic market obligation) rules and agreed to pay related fines will be allowed to resume exports. In addition, the country has adopted a new regulation that imposes harsher penalties for violators, maintaining the coal export ban for companies until they meet their DMO.
Under the DMO, Indonesia, which relies on coal-fired power generation (62% of its power mix), forces coal miners to supply 25% of annual production to the state-owned power utility PT Perusahaan Listrik Negara (PT PLN) at a maximum price of US$70/t, around half of the current global market price. In addition, Indonesia requires power plants to maintain a 20-day coal supply of around 5.1 Mt in total. As local coal miners only met less than 1% of the required supply on 1 January 2022, the country decided to prohibit coal exports in a bid to prevent a possible widespread blackout. The Indonesian government banned coal exports in January 2021 to avoid risks of domestic shortage for the power sector and potential blackouts.
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