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Jakarta Post

Explainer: Indonesia’s push for coal downstreaming against all odds

The Jakarta Post Image
Workers load coal at Cirebon Port in West Java in this file photo.(JP/Arya Dipa )
Norman Harsono
Jakarta   ●   Thu, December 17, 2020

Indonesia has pulled concerted efforts on coal downstreaming, including through legal means, as it seeks to exploit the country’s vast coal reserves and boost the economy, amid challenges in economic feasibility and the risk of environmental hazards.

The government passed two laws this year that cement the legal foundation for coal downstreaming, namely the new Mining Law and the Job Creation Law, to reaffirm its commitment and introduce incentives.

The downstreaming of coal, whose reserves in Indonesia is the sixth-largest in the world, includes the push to transform coal, the dirtiest fossil fuel, into cooking gas, methanol and electricity, among other commodities.

Coal is among Indonesia’s top export commodities, aside from palm oil, and the mining industry as a whole contributes big money to non-tax state revenue, official data shows.


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