Coal DMO likely to exceed 30%, MEMR says
Friday, February 6 2026 - 07:23 PM WIB
By Calvin Purba
The Ministry of Energy and Mineral Resources (MEMR) has indicated that the Domestic Market Obligation (DMO) for coal could be set at more than 30% to ensure domestic coal demand is met.
According to Yuliot Tanjung, Deputy Minister of Energy and Mineral Resources, the government has already determined the volume of coal required for the DMO. He explained that due to downward adjustments to coal production targets for 2026, the government will increase the DMO percentage.
“With the planned reduction in production, the DMO percentage will inevitably increase,” Yuliot said on Friday (Feb. 6). “The range could possibly be more than 30%.”
Regarding the Work Plan and Budget (RKAB), Yuliot said the government will allow mining companies to submit revisions as long as there are changes or increases in domestic demand.
“In implementation, the RKAB can be revised if there are changes or increases in domestic demand,” he said.
Yuliot also emphasized that mining companies should avoid excessively aggressive coal production, as this could push prices down.
“In fact, when business entities ramp up production excessively, competition becomes unhealthy, prices fall, and government revenue is not optimized,” he said.
Read also: Medium coal producers cut spot sales as govt plans drastic output cut
Previously, the House of Representatives (DPR) urged the Ministry of Energy and Mineral Resources to raise the Domestic Market Obligation (DMO) for coal producers to 30% from the current 25% to safeguard domestic energy supply following the government’s plan to cut coal output in 2026.
Commission XII member Yulian Gunhar said the proposed increase is a logical consequence of Energy and Mineral Resources Minister Bahlil Lahadalia’s decision to lower the national coal production target from 790 million tonnes in 2025 to around 600 million tonnes in 2026. Under Ministerial Decree No. 267.K/2022, coal miners are currently required to allocate at least 25% of their production to the domestic market.
“PLN’s domestic coal requirement under the DMO is around 240 million tonnes. If production is limited to 600 million tonnes, a 25% DMO will not be sufficient. The solution is to raise the DMO share to 30%,” Yulian said during a hearing with the ministry in Jakarta on Jan. 22.
He added that the adjustment needs to be mapped out immediately, as national coal production is dominated by seven to eight large companies that control more than half of total output. He stressed that domestic supply security must be maintained even as the government seeks to improve fiscal conditions, with Indonesia’s fiscal deficit recorded at 2.92% of gross domestic product.
Editing by Reiner Simanjuntak