Indonesia urged to tighten oversight of coal domestic market obligation
Energy think tank CERI has urged Indonesia to strengthen enforcement of its coal Domestic Market Obligation (DMO), warning that a USD 5 per tonne fine is too weak against export margins near USD 68. The Directorate General of Mineral and Coal says mining companies have been assigned to supply 212 million metric tons of coal to state utility PT PLN, above the utility's 154 million ton requirement for 2026.
Indonesian energy analysts are calling for stronger enforcement of the country's coal Domestic Market Obligation (DMO), warning that gaps in supervision could threaten the reliability of primary energy supply to power plants. According to Republika, the Center of Energy and Resources Indonesia (CERI) argues that the government already has the tools to police compliance but needs to use them more effectively.
Enforcement gaps in focus
CERI Executive Director Yusri Usman told Republika that governance of coal supply requires attention from all stakeholders, including the Ministry of Energy and Mineral Resources (ESDM) through its Directorate General of Mineral and Coal (Minerba). He said an evaluation of DMO governance could also form part of a wider effort to strengthen supervision of the mining sector.
The economics of skipping the obligation
CERI set out why some miners may prefer to export rather than deliver to the domestic market. Meeting the DMO, Yusri said, costs a mining company around USD 45 per tonne to produce coal and deliver it to a coal-fired power plant (PLTU). The penalty for failing to meet the obligation is USD 5 per tonne, while the international market price sits at roughly USD 68 per tonne. A miner that exports instead of supplying domestically therefore still earns about USD 17 to USD 18 per tonne even after the fine, according to CERI's calculation.
CERI said the effectiveness of sanctions against non-compliant companies should be part of any evaluation aimed at strengthening compliance.
Monitoring tools already in place
Yusri pointed to instruments the government can use. The Mineral and Coal Information System (Simbara) allows real-time monitoring of DMO compliance, with each miner required to input data on production, royalties paid and DMO obligations. He also said the export-recommendation mechanism could be optimized: a company that breaches its obligation would automatically lose its export permit, because no miner can export without a recommendation issued by the Director General of Minerba to the Director General of Foreign Trade. Together with the RKAB work plan, these instruments could strengthen governance of energy supply to power plants, CERI said.
The comments follow an announcement days earlier by the police anti-corruption unit (Kortastipidkor Polri) naming two companies allegedly linked to irregularities in coal procurement. CERI said any evaluation of coal supply should be carried out comprehensively.
Government points to a supply buffer
Minerba says it continues to strengthen oversight of DMO compliance for both the electricity and non-electricity sectors. Director General Tri Winarno said the government has assigned mining companies holding an approved RKAB to supply coal to state utility PT PLN, with total assignments reaching 212 million metric tons — above PLN's 2026 requirement, estimated at 154 million metric tons. As of May 2026, 144 million metric tons of the assigned volume had been contracted, with delivery realization estimated at 130.5 million metric tons.