Jakarta – The coal domestic market obligation (DMO) policy is an important step to accelerate the energy transition towards renewable energy (NRE) and reduce dependence on fossil fuels, especially in power plants, according to Executive Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira.
He said the new Minister of Energy and Mineral Resources (MEMR), Bahlil Lahadalia, needs to revise the coal DMO as this is crucial to reduce the risk of over-reliance on coal, the main fossil energy source in Indonesia.
“Together with the Ministry of Finance, it is necessary to discuss the revision of the coal domestic market obligation which raises the risk of fossil fuel dependence, especially in power plants,” said Bhima, Tuesday, August 20.
Bhima proposed that the coal DMO figure be reduced to 100 million tons per year, down almost half from the realisation of meeting the domestic market in 2023 which reached 177 million tons.
“The realisation of the DMO in 2023 was recorded to exceed the Ministry of Energy and Mineral Resources’ prognosis, which was 120 percent of its target of 177 million tons,” Bhima added.
In addition to the DMO revision, Bhima also encouraged Minister of Energy and Mineral Resources Bahlil Lahadalia to accelerate the early retirement process for coal-fired power plants, including those operated by industries outside the captive network. He also emphasised the need to revise Presidential Regulation (Perpres) Number 112 of 2022 concerning the Acceleration of Renewable Energy Development for Electricity Supply.
“The revision of Presidential Regulation Number 112 of 2022 which still allows the construction of PLTU in new industrial areas also needs to be revised. It is estimated that there are 21 gigawatts of industrial estate PLTUs to be built and this hampers Indonesia’s efforts to achieve carbon emission targets,” Bhima explained.
The revision of the coal DMO policy and the acceleration of coal power plant retirement are expected to support Indonesia’s efforts to achieve lower carbon emission targets and accelerate the transition to cleaner and more sustainable energy. (Hartatik)
