Jakarta, CNBC Indonesia – The Indonesian government has a carbon neutral target by 2060 or sooner. To achieve this target, one of the steps that will be taken is to retire the coal-fired power plant (PLTU).
If the power plant is stopped, it means that domestic coal absorption will decrease. On the other hand, coal is still the country’s mainstay commodity, not only for state revenue, but also for employment.
As is known, currently there are more than 1,000 coal mining companies, consisting of 1,162 coal Mining Business Permits (IUP), of which 1,157 coal Production Operation IUP and 5 coal Exploration IUPs. In addition, there are around 66 Coal Mining Concession Work Agreement holders (PKP2B).
In 2019, the number of workers in the coal mining sector reached 150,000 workers.
In order to maintain the sustainability of the domestic coal mining industry so that it does not die completely, the government encourages the downstream coal program in Indonesia. But in fact, the absorption of coal from downstream projects cannot be as large as PLTU.
Based on the presentation from the Special Staff of the Minister of Energy and Mineral Resources (ESDM) for Mineral and Coal Governance (Minerba) Irwandy Arif, coal downstream projects such as Dimethyl Ether (DME), methanol, coking coal, and also the briquettes, which are currently in the planning stage, at least only absorb around 21.47 million tons of coal per year if all of these projects are operational.
This amount is certainly still much smaller than the need for coal for Steam Power Plants (PLTU) which reaches around 100 million tons per year.
Previously, PT PLN (Persero) estimated the need for coal for PLTU in 2022 to increase to 119.19 million tons from the projected need until the end of 2021 which reached 115.6 million tons.
PLN President Director Zulkifli Zaini said the increase in coal demand in 2022 includes the need for steam power plants operated by the PLN group as well as private electricity developers (PLTU).Independent Power Producers/ IPP).
“PLN has projected the need for coal for 2022 is 119 million tons,” he said in a Hearing Meeting (RDP) with Commission VII DPR RI, Monday (15/11/2021).
He detailed that the demand for coal for PLN’s PLTU in 2022 is estimated to decrease to 68.43 million tons from the projected need until the end of 2021 which is 70.3 million tons.
Meanwhile, the need for coal for IPP power plants in 2022 is estimated to reach 50.76 million tons, up from the projection until the end of 2021 which is 45.3 million tons.
So, what are the details of coal uptake for downstream projects?
The following are some plans for downstream coal projects in Indonesia and their annual coal demand, based on data from the Ministry of Energy and Mineral Resources:
1. Project coal to methanol carried out by PT Kaltim Prima Coal (KPC), the feedstock or coal needs is 5-6.5 million tons per year.
2. Project coal to DME which is carried out by PT Bukit Asam, Pertamina, and Air Products, is estimated to require coal raw materials of 6.5 million tons per year.
3. Project coal to methanol which is carried out by PT Arutmin Indonesia, is estimated to require coal raw materials of 6 million tons per year.
4. Project coal to methanol which is carried out by PT Adaro Indonesia, is estimated to require coal raw materials of 1.3 million tons per year.
5. Cokes making, semi coking coal plant project by PT Megah Energi Khatulistiwa, is estimated to require 1 million tons of coal per year.
6. Coal Briquetting
– PT Bukit Asam Briquette Factory requires raw materials of 30 thousand-40 thousand tons of coal per year.
– PT Thriveni’s Briquette Factory requires 130 thousand tons of coal per year as raw material.