Indonesia’s vital coal sector experienced a significant economic contraction through the first eleven months of 2025, a period defined by a sharp divergence between shipment volumes and the financial returns they generated. Official statistics revealed a complex picture where export volumes saw a moderate decline of 3.9% year-over-year, settling at 354.64 million metric tons. However, the financial impact was disproportionately severe, with the total value of these exports plummeting by a staggering 20.27% to $22.17 billion. This dramatic drop in revenue highlights a dual challenge for the nation’s top commodity: not only were fewer tons being shipped, but each ton was fetching a substantially lower price on the global market. The trend was further underscored by external market indicators, such as the 14% annual decline in Newcastle coal futures, which serve as a key benchmark for Asian thermal coal prices. This price weakness compounded the effect of lower shipment volumes, creating a powerful headwind for Indonesian producers and the national economy.
A Tale of Two Headwinds
The consensus among industry analysts points to a confluence of external and internal pressures that collectively dampened Indonesia’s export performance. Externally, the primary driver was a notable softening of demand from the world’s largest coal consumers, particularly China and India. These nations, historically key destinations for Indonesian coal, have aggressively ramped up their own domestic production capabilities. This strategic push toward energy self-sufficiency has directly reduced their reliance on foreign imports, creating a significant demand vacuum in the international market. Internally, Indonesia’s export competitiveness faced a different kind of challenge: policy uncertainty. The government’s proposed introduction of a new tiered export duty, with rates potentially ranging from 5% to 11% based on prevailing coal prices, has cast a long shadow over the industry. The prolonged delay in finalizing the implementing regulations for this new tax structure has created an unpredictable and risky environment for exporters, complicating long-term planning and investment decisions.
The Shifting Global Energy Landscape
The export slowdown in 2025 did not occur in isolation but aligned with a broader, structural transformation taking place across the global energy sector. This period saw Indonesia’s domestic coal production also fall by 5.8%, signaling that the challenges were not confined to the export market. More significantly, the downturn resonated with long-term forecasts from major international bodies. The International Energy Agency had already predicted that global coal demand growth was set to slow considerably, with consumption expected to reach its peak around 2030. This projected plateau and subsequent decline were attributed largely to the accelerating expansion of renewable energy sources worldwide, as nations increasingly pivot toward cleaner alternatives to meet climate goals. For a major fossil fuel exporter like Indonesia, these events served as a stark indicator that the global energy paradigm was fundamentally shifting, presenting sustained and long-term challenges that transcended cyclical market fluctuations.
