Energy Minister Bahlil Lahadalia has signed a new regulation establishing the use of the reference coal price (HBA) as the official pricing standard for the country's coal exports, replacing other pricing benchmarks such as the Indonesia Coal Index (ICI) and Newcastle Coal Futures.
The regulation, formalized through a Ministerial Decree, will require coal exporters to use the HBA as the basis for export transactions. The change will take effect on March 1, 2025.
Julian Ambassadur, Director of Mineral and Coal Program Development at the Ministry of Energy and Mineral Resources, confirmed the decree. “Yes, it has been signed in the Ministerial Decree,” he told Kontan on Tuesday.
Previously, Bahlil had indicated that the Ministry would mandate the use of HBA for export pricing. "It won’t be long before we consider issuing a ministerial decree to ensure that HBA is used for transactions in the global market," Bahlil said in a press conference on February 3.
Read also: Indonesia to mandate HBA price for coal exports
The move comes as Indonesia plays a key role in the global coal market, with the country’s coal exports accounting for up to 35% of global demand. Bahlil emphasized that Indonesia should have the authority to set the price of its coal, given its significant contribution to global coal supply.
“The total global coal consumption is around 8 to 8.5 billion tons, but the coal available in the market is about 1.25 to 1.5 billion tons. We export 500 to 550 million tons, which makes up 30%-35% of total global consumption,” he said.
Bahlil also questioned why the country’s coal pricing should be determined by neighboring countries, adding, “Why should our HBA price be lower than other countries?”
Editing by Reiner Simanjuntak
