Economy News

Philippines urges Indonesia to lift coal export ban

Indonesia suspended coal exports on January 1 amid shortages at domestic power plants.

The Philippines’ energy secretary Alfonso Cusi has appealed to Indonesia to lift its coal export ban, saying the policy will be detrimental to economies heavily reliant on the fuel for power generation, Manila’s Department of Energy said on Monday.

Indonesia, the world’s biggest thermal coal exporter suspended exports on January 1 after its state power utility reported dangerously low inventory levels of the fuel at its domestic power stations.

The Philippines’ move follows similar requests from other Asian governments such as Japan and South Korea.

Cusi made the appeal in a letter sent via the Department of Foreign Affairs to Indonesia’s Minister of Energy & Mineral Resources, Arifin Tasrif, the energy department said in a news release, without specifying when the letter was sent.

Cusi had asked the foreign affairs department to intercede and appeal on behalf of the Philippines through the Association of Southeast Asian Nations’ (ASEAN) cooperation mechanism.

The ban drove coal prices in China and Australia higher last week, while scores of vessels slated to carry coal to major buyers such as Japan, China, South Korea and India have been in limbo off Kalimantan, home to Indonesia’s main coal ports.

Contingency measures

The Philippines, which is still heavily dependent on coal for power generation, buys most of its requirements from Indonesia, and some, more expensive, supplies from Australia and Vietnam.

Nearly 70 percent of the 42.5 million tonnes of Philippine coal supply in 2020 was imported, according to government data.

Power generated by coal comprises about 60 percent of the country’s power mix, and in 2021 the country sourced 2.3 million tonnes per month from Indonesia to fuel its power plants, the energy department said.

Senator Win Gatchalian, who heads the Senate energy committee, has called on the energy department to prepare contingency measures because of the export ban, including looking for other potential suppliers.

Indonesia is the world’s biggest thermal coal exporter, supplying the majority of fuel the Philippines uses in its power plants [File: Willy Kurniawan/Reuters]

Source: Reuters/ AlJAZEERA

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