Indonesia's coal export duty scheme for 2026 still under discussion

• Duty triggers pushback from miners due toconcerns over competitiveness
  
  
• HR-based pricing, possible cut in production quotas raise export uncertainty
  
  

Mysteel Global: Indonesia has not finalised its new coal export duty scheme for 2026 as scheduled at the start of the new year, as policymakers are still in discussions in the face of strong resistance from coal mining companies. By far, no official implementation date has been confirmed, according to multiple local media reports.

The country's Finance Minister Purbaya Yudhi Sadewa had previously indicated that the levy would be introduced on 1 January 2026, with rates initially proposed at 1-5%, depending on coal prices. The measure was expected to generate up to Rp 20 trillion ($1.19 billion) in additional state revenue, Mysteel Global reported earlier.

However, according to Bisnis.com on 31 December, Purbaya revealed a new tiered tariff pattern, proposing steeper rates on coal exports ranging from 5% to 11%, adjusted based on coal price movements in global markets, though this proposal remains under review and has yet to be finalised.

The original 1-5% plan had already triggered pushback from domestic miners, who warned that an added tax burden would further squeeze margins, undermine the competitiveness of Indonesian coal in global markets, and inject greater uncertainty into production and sales planning for 2026. Concerns have just intensified given the higher rates being discussed.

Compounding the uncertainty, Indonesia's Trade Ministry has introduced a new reference price (Harga Referensi, HR) system for mining exports. According to the Jakarta Post on 30 December, the HR will be calculated based on average prices across domestic and international commodity exchanges and will serve as the basis for determining export duty brackets.

Under the revised scheme, the HR determines the applicable tariff tier, which is then applied to the Export Benchmark Price (HPE) set periodically by the trade minister in coordination with other government agencies.

"This new layered pricing mechanism directly inserts policy-driven costs into our export contracts," said Gita Mahyarani, acting executive director of the Indonesian Coal Mining Association (APBI), as the Jakarta Post quoted.

Industry sources cautioned that the revised duty structure would further complicate pricing negotiations and erode Indonesia's competitiveness in export markets, particularly at a time when global supply has been abundant.

Meanwhile, uncertainty surrounding production quotas has added another layer of confusion. On 30 December, Energy and Mineral Resources Minister Bahlil Lahadalia said the Indonesian government plans to cut coal mining quotas for 2026 to keep prices at what he described as "rational" levels. However, he stopped short of specifying the scale of the reductions.

Previously, the ministry had indicated that the national coal output in 2026 could fall below 700 million tonnes (mnt), down from the 735 mnt target for 2025, though no formal guidance has been issued.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.