Executive Summary

Key insights and market outlook

The Indonesian government plans to implement a coal export duty when global coal prices are high, according to Minister of Energy and Mineral Resources Bahlil Lahadalia. The duty will be based on a specific price threshold still being formulated. This policy aims to maximize natural resource benefits for the country's welfare and increase state revenue.

Full Analysis

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Deep Dive Analysis

Indonesia Introduces Conditional Coal Export Duty Policy

Price-Linked Export Tariff Mechanism

The Indonesian government is set to implement a coal export duty that will be triggered when global coal prices reach certain threshold levels ¹

². Minister of Energy and Mineral Resources Bahlil Lahadalia explained that the export duty will not be applied when coal prices are low, to avoid burdening companies during market downturns. The specific price threshold for implementing the duty is currently being formulated by the government ¹.

Rationale Behind the Policy

The decision to impose a conditional coal export duty is part of the government's efforts to maximize the benefits of natural resources for national welfare and increase state revenue, as mandated by Article 33 of the Indonesian Constitution ²

. Finance Minister Purbaya Yudhi Sadewa previously highlighted that the policy aims to address the anomaly where coal exporters receive tax restitutions during low-price periods but don't contribute through export duties when prices are high.

Economic Impact Considerations

The government is carefully designing the export duty mechanism to balance state revenue generation with the profitability of coal mining companies. Bahlil emphasized that the duty will only be applied when companies are making significant profits during high-price periods, ensuring that the measure is fair and doesn't harm businesses during market slumps ¹

. The targeted annual revenue from this export duty is approximately Rp 20 trillion ².