Chasing volume, losing value: the cost of coal over expansion in Indonesia

Indonesia's coal sector is facing a downturn as production records in 2024 are met with declining export demand from China and India and rising production costs. This oversupply has eroded company profits and state non-tax revenues. Simultaneously, coal mine methane (CMM) emissions are significantly underreported and are projected to rise by 25% by 2030, driven by the expansion of underground mining in South Kalimantan. The report recommends a moratorium on new mines, improved methane monitoring, and a just transition framework for coal-dependent regions.

• Indonesia's coal production reached a record high of 836 million tonnes in 2024, but total demand is projected to fall by approximately 10% to 756 million tonnes in 2025.
• Export markets are contracting as major importers China and India reduce reliance on Indonesian coal due to their own domestic production increases and the growth of solar and wind power.
• The strategy of increasing output to offset falling prices has failed, with average net profits for coal companies dropping by 67% from their 2022 peak due to rising production costs and lower market prices.
• State non-tax revenues from the mineral and coal subsector have declined since 2022, leading to significant reductions in provincial fiscal transfers to East Kalimantan (41%), South Kalimantan (30%), and South Sumatra (23%) between 2023 and 2025.
• Actual coal mine methane (CMM) emissions in 2024 are estimated at 722 kt CH4, which is more than four times the official government reported figure of 168 kt CH4.
• CMM emissions are projected to increase by 25% by 2030, primarily driven by the expansion of underground coal mining in South Kalimantan, where one mine's production is expected to grow from 2.6 million tonnes in 2024 to 20 million tonnes by 2030.

APA

Setiawan, D., Zhang, S., Thiru, J. Z., Modadugu, R., Rahmani, A. A., & Bhardwaj, N. (2025). Chasing volume, losing value: the cost of coal over expansion in Indonesia. Ember. https://ember-energy.org/app/uploads/2025/11/EN-Chasing-volume-losing-value-the-cost-of-coal-over-expansion-in-Indonesia-PDF.pdf

Chicago

Setiawan, Dody, Shiyao Zhang, Jivan Zhen Thiru, Rajasekhar Modadugu, Ardhi Arsala Rahmani, and Nishant Bhardwaj. Chasing volume, losing value: the cost of coal over expansion in Indonesia. Ember, 2025. https://ember-energy.org/app/uploads/2025/11/EN-Chasing-volume-losing-value-the-cost-of-coal-over-expansion-in-Indonesia-PDF.pdf.

Wikipedia

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BibTeX

@techreport{setiawan2025chasing, author = {Setiawan, Dody and Zhang, Shiyao and Thiru, Jivan Zhen and Modadugu, Rajasekhar and Rahmani, Ardhi Arsala and Bhardwaj, Nishant}, title = {{Chasing volume, losing value: the cost of coal over expansion in Indonesia}}, institution = {Ember}, year = {2025}, month = nov, url = {https://ember-energy.org/app/uploads/2025/11/EN-Chasing-volume-losing-value-the-cost-of-coal-over-expansion-in-Indonesia-PDF.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }