Ahead of Implementing Coal Export Duty, These Issues Should Be Considered

Jakarta, CNBC Indonesia - The government plans to implement an export duty on coal to increase state revenue amid the impact of the Middle East conflict between Iran and Israel involving the United States. However, the policy is deemed to require careful examination. Chairman of the Indonesian Mining & Energy Forum (IMEF) Singgih Widagdo stated that the implementation of the export duty is possible in principle. Nevertheless, there are several crucial aspects that the government must consider before the policy is enacted. “The government could impose an export duty on coal. However, there are important points that must be understood regarding the imposition of the coal export duty,” said Singgih to CNBC Indonesia on Wednesday (25/3/2026). According to him, the government, particularly the Ministry of Energy and Mineral Resources, needs to recalculate or audit the current mining costs. This is due to the increase in production costs, especially from the surge in fuel prices. “Thus, on average, the mining cost per tonne must be a concern for the government,” he said. In addition, it should be noted that the current rise in coal prices is primarily driven by the US-Israel war against Iran; ironically, the rise in fuel prices due to the war also leads to increased mining costs. As a result, in his view, the price increase may not last long-term. “With these two reasons, if the government proceeds with the export duty, it must truly calculate at what price level it will be set,” said Singgih. He assessed that with the variety of Indonesian coal quality, especially in the low-rank category, not all producers gain significant profits. Therefore, Singgih proposed that if the government still implements the export duty, it should be applied at price levels above US$160 per tonne with a tiered scheme. He added that the export duty would only apply to the export market, so if there is a significant cut in the RKAB, the potential for coal exports will also decline. “Clearly, the analysis and calculation of the export duty must be based on the current mining cost conditions and what level is best as the basis for calculating the export duty,” said Singgih.