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Indonesia mulls raising coal DMO to 30%
The plan was originally proposed by the House of Representatives Commission VII overseeing energy and mining.
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A worker stands on the back of a truck loaded with coal at Karya Citra Nusantara (KCN) Marunda Port in Jakarta on Jan. 17, after Indonesia eased an export ban on the commodity. (AFP/Adek Berry)
T
he Energy and Mineral Resources Ministry is mulling over a proposal to raise the domestic market obligation (DMO) for coal from 25 percent to 30 percent of total production to anticipate rising domestic demand.
Energy Minister Arifin Tasrif told reporters on Friday that the government was "monitoring the domestic electricity sector and industries’ demand", to make a decision.
However, there would be no increase in the DMO price for thermal coal, which is currently capped at US$70 per ton, he said.
Read also: Govt mulls plan to form new entity to collect coal levies
House of Representatives Commission VII overseeing energy and mining during a hearing with the energy ministry on Jan. 13 proposed increasing the DMO to 30 percent of total production to anticipate rising domestic coal consumption.
Commission chairman Sugeng Suparwoto said "increasing coal DMO volume was important" considering coal-fired power plants with an estimated total capacity of 35,000 megawatts would begin operations in the next few years, which means domestic coal consumption for coal plants would reach around 175 million tons per year.
Plans to improve DMO governance were taken after the government began on Jan. 1 a month-long ban on coal shipments to address a shortage in state power company PLN’s coal stocks, which could have led to widespread blackouts. The ban drove coal prices in China and Australia higher in January.
