How coal oversupply erodes company profits and state revenues

The report details a downturn in Indonesia's coal sector, where a strategy of increasing production volumes to offset falling global prices is contributing to market oversupply. This trend, combined with rising operational costs from inflation and new biodiesel mandates (B40), has led to a decline in net income for producers. Consequently, state non-tax revenues and provincial fiscal transfers to coal-dependent regions like East Kalimantan and South Sumatra have dropped significantly since the 2022 price peak.

• Global coal oversupply was driven by production increases in China (147 million tonnes) and India (104 million tonnes) between 2022 and 2023, alongside the removal of Australia's coal export ban.
• Indonesian producers attempted to maintain revenue by expanding exports—by 53 million tonnes in 2023 and 37 million tonnes in 2024—which further increased global inventories by 44 million and 48 million tonnes respectively.
• Nine major coal companies planned a combined production increase of 26.6 million tonnes for 2025, with Bayan Resources and Bukit Asam planning the largest increases of 13.5 million and 6.7 million tonnes respectively, though actual production as of June 2025 reached only 357.6 million tonnes (48% of the annual target).
• Company profits are being squeezed by falling prices and rising costs, including a mandatory biodiesel blending increase to 40% (B40) starting January 2025, which the ICMA estimates could increase annual production costs by 1 trillion IDR.
• State non-tax revenues from the mineral and coal subsector peaked at 183 trillion IDR in 2022 but fell by 4.4% in 2023 and 18.6% in 2024 as average coal prices dropped from 201 USD/ton in 2023 to 121 USD/ton in 2024.
• Provincial fiscal transfers from coal royalties declined between 2023 and 2025 by 41% for East Kalimantan, 30% for South Kalimantan, and 23% for South Sumatra.

APA

Ember (2025). How coal oversupply erodes company profits and state revenues. https://ember-energy.org/chapter/how-coal-oversupply-erodes-company-profits-and-state-revenues/

Chicago

Ember. How coal oversupply erodes company profits and state revenues. 2025. https://ember-energy.org/chapter/how-coal-oversupply-erodes-company-profits-and-state-revenues/.

Wikipedia

{{cite report |author=Ember |title=How coal oversupply erodes company profits and state revenues |date=6 November 2025 |url=https://ember-energy.org/chapter/how-coal-oversupply-erodes-company-profits-and-state-revenues/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ember2025how, author = {{Ember}}, title = {{How coal oversupply erodes company profits and state revenues}}, institution = {Ember}, year = {2025}, month = nov, url = {https://ember-energy.org/chapter/how-coal-oversupply-erodes-company-profits-and-state-revenues/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }