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View all search resultsFinancial strain in coal sector threatens methane reduction goal
Expended underground mining is jeopardizing the coal industry’s and the government’s commitment to the Global Methane Pledge, a pact to cut methane emissions by at least 30 percent by 2030.
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The Suralaya coal-fired power plant is pictured on Oct. 31, 2023, in Cilegon, Banten. (AFP/Ronald Siagian)
M
ounting financial pressure is pushing Indonesia’s coal industry toward methane-intensive underground mining, jeopardizing the country’s commitment to global emissions pledges.
The Global Methane Pledge foresees a worldwide cut in global methane emissions by at least 30 percent by 2030, but expanded coal mining operations, a key source of methane emissions, threaten to undermine Indonesia’s commitment to that pact.
Coal companies’ net profits have plunged 67 percent since their 2022 peak, according to data analyzed by energy think tank Ember.
Rather than prompting a managed decline, the mounting financial pressure has triggered a desperate surge in production from new, methane-intensive underground mines as companies attempt to compensate for plummeting prices.
This expansion is set to drive a 25 percent increase in Indonesia's methane pollution by 2030, the think tank warns in a study published earlier this month.
The simultaneous profit implosion and production increase now directly threaten to undermine Indonesia’s pledge to reduce methane emissions and jeopardize the economic stability of coal-dependent regions.
Mutya Yustika, an energy economist at the Institute for Energy Economics and Financial Analysis (IEEFA), said the coal sector's deepening financial strain was stripping away its capacity to manage the surge in methane emissions from new underground mines.
