Indonesia to Implement Tiered Coal Export Tariff in 2026

Price-Sensitive Tariff Structure

The Indonesian government is developing a tiered export tariff system for coal, with Finance Minister Purbaya Yudhi Sadewa announcing that the proposed rates will range between 5% and 11% starting January 2026. The tariff will be dynamically adjusted based on global coal prices, creating a price-sensitive mechanism designed to balance government revenue with industry competitiveness.

Tariff Mechanism Details

The proposed tariff structure includes three tiers:

1. Lower tariff of 5% when coal prices are below a certain threshold
2. Medium tariff of 8% at mid-range prices
3. Higher tariff of 11% when prices exceed the upper threshold

The exact price thresholds for each tier are still under discussion, with the government balancing between maximizing revenue and maintaining industry competitiveness. The new system represents a shift from previous export policies, providing a more dynamic and responsive tariff mechanism.

Economic Implications

The implementation of this tiered tariff system is expected to have significant implications for Indonesia's coal industry and government revenue. By adjusting tariffs according to global coal prices, the government aims to capture more revenue during periods of high prices while providing relief during downturns. This approach is designed to create a more stable and predictable export environment for Indonesian coal producers.