Bahlil Explains the Reason for Cutting Coal Production in 2026

Minister of Energy and Mineral Resources Bahlil Lahadalia. (Photo: Maria Trisnawati/VOI)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) plans to revise the Work Plan and Budget (RKAB) for 2026 as a strategic step to improve coal prices in the market.

This policy is taken to balance supply and demand, following the oversupply conditions that have been suppressing global coal prices.

Efforts to coordinate between supply and demand are considered important, not only to maintain the stability of coal commodity prices, but also to ensure the availability of energy reserves for future generations. The government considers that excessive coal exploitation needs to be controlled so that natural resource management remains sustainable.

"We will reduce production (coal) so that prices are good and this mine we have to pass on to our grandchildren. So don't think that we manage natural regional resources as if it must be completed now. This nation must continue, our environment must maintain aspects of justice and we must also maintain it," said Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia, quoted Friday, January 9.

Bahlil explained that Indonesia's dominance in global coal supplies also affected market imbalances. Currently, the world coal trade volume reaches around 1.3 billion tons, with Indonesia contributing a very large portion.

"The coal traded globally is approximately 1.3 billion tons. Of the 1.3 billion tons, Indonesia supplies 514 million tons or approximately 43 percent. What is the result? Supply and demand are not maintained, which ultimately makes coal prices fall," he said.

Learning from this condition, the government decided to rearrange the production quota through a revision of the RKAB so that it is more in line with national and international needs.

One of the concrete steps is to cut the national coal production target.

"The realization of national coal production which reached 790 million tons in 2025 will be cut to approximately 600 million tons," said Bahlil.

Throughout 2025, coal utilization for domestic needs or Domestic Market Obligation (DMO) is 32 percent or 254 million tons out of total production. Meanwhile, the remaining 514 million tons are used for export needs.

Currently, said Bahlil, the Directorate General of Mineral and Coal (Minerba) is calculating the production quota for each mining company in detail through the RKAB system. The government expects business actors to begin adjusting their work plans to the new policy.

In addition to coal, the government also hinted that it would adjust similarly to other mineral commodities, such as nickel.

This step is directed to support the development of a more equitable and sustainable downstream ecosystem.