Jakarta, CNBC Indonesia – The Indonesian government has an ambitious target of achieving a carbon neutral target of 2060 or faster, one of which is to reduce the use of coal domestically, especially for Steam Power Plants (PLTU).
Until 2030, it is targeted that around 5.52 Giga Watt (GW) to 9.2 GW of the power plant is stopped. Then, it will be increased gradually until 2055 or even faster in 2040 there will be no more PLTU operating.
However, if the government is serious about leaving coal, including stopping national coal production, it means that Indonesia must be prepared to experience a surge in unemployment.
The reason is, coal is still the mainstay of this country’s commodity, even in 2020 it was ranked third as the largest coal producer in the world, after China and India.
The coal industry has also absorbed up to 150 thousand workers in 2019, based on data from the Coal Booklet of the Ministry of Energy and Mineral Resources 2020.
“The coal industry absorbs up to 150,000 workers in 2019. The composition of foreign workers is 0.1%,” the 2020 Ministry of Energy and Mineral Resources Coal Booklet wrote.
This number does not even include the absorption of labor in the field of PLTU operations. If it is included with workers in PLTU, it means that the number of workers who have to lose their jobs will be even greater.
If the government completely stops the use of PLTU and coal production, it means that it must be prepared to open new job opportunities for hundreds of thousands of Indonesian workers who are currently working in the coal mining industry and coal-based power plants.
Minister of Energy and Mineral Resources Arifin Tasrif in a Working Meeting with Commission VII DPR RI, Monday (15/11/2021), said that the government plans to reduce 5.52 GW of PLTU by 2030, consisting of a reduction of PLTU Java – Bali by 3.95 GW and Sumatra by 1.57 GW.
“We planned early retirement Coal PLTU, Java-Bali phase out 3.95 GW and Sumatra phase out 1.57 GW until 2030,” he said in a Working Meeting with Commission VII DPR RI, Monday (15/11/2021).
He explained that his party made a road map towards carbon neutrality in order to accelerate the development of new renewable energy (EBT) and the energy transition to replace the retired PLTU.
Previously, Chairman of the Association of Indonesian Mining Experts (Perhapi) Rizal Kasli said that national coal consumption is estimated to decrease by 175-190 million tons per year or equivalent to a reduction in income of Rp. 25 trillion per year if the power plant is completely stopped.
Therefore, according to him, the government is considered to have to accelerate the downstreaming of coal to replace the lost market.
“Until 2060, it is estimated that coal use will decrease by 175-190 million tons or around Rp. 25 trillion. The government must spur the growth of coal downstreaming,” he told CNBC Indonesia, quoted Thursday (11/11/2021).
He explained that domestic coal consumption globally is still small. Based on BP Statistical Review 2021 data, Indonesia’s coal consumption is only about 2.2% of the total share of world coal consumption, much lower than China which has 54.3%, India 11.6% and USA 6. 1%.
“Indonesia is still far lower in its use of coal,” he said.
As a substitute for this loss of revenue from the coal sector, according to him, the government should look for an alternative source of Non-Tax State Revenue (PNBP) from other industries to support national development.
“This will also have an impact on reducing job opportunities, both direct and indirect workers, from coal mining. This must find a way out,” he added.
Muhammad Wafid, Director of Mineral and Coal Revenue at the Directorate General of Mineral and Coal (Ditjen Minerba) of the Ministry of Energy and Mineral Resources said that PNBP in the mining sector is dominated by coal.
“God willing, (PNBP exceeds the target), the coal is approximately 75-80% of the total PNBP,” he explained.
This year the PNBP of mineral and coal mining has reached a record high in at least the last 10 years. Until November 11, 2021, PNBP Minerba, based on data from the Ministry of Energy and Mineral Resources Minerba One Data Indonesia (MODI), was recorded at Rp 59.62 trillion. This amount is equivalent to 152% of the target set at the beginning of the year of Rp 39.10 trillion.
The national coal production target in 2021 is 625 million tons, with domestic absorption targeted at 137.5 million tons.
In 2020, Indonesia produced around 558 million tons of coal, of which domestic coal consumption only reached around 132 million tons. This means that coal consumption for domestic purposes is around 24% of the total national coal production.