Govt considers raising coal DMO share after 2026 output cut

The Ministry of Energy and Mineral Resources (MEMR) is reviewing a potential increase in the Domestic Market Obligation (DMO) for coal producers, following the government’s plan to cut national coal output in 2026.

Coal miners are currently required to allocate at least 25% of annual production to the domestic market. Energy and Mineral Resources Minister Bahlil Lahadalia said the DMO share could be raised if it proves insufficient after coal production is reduced to around 600 million tonnes in 2026, down from an estimated 790 million tonnes in 2025.

“If the approved RKAB is 600 million tonnes and a 25% DMO is not enough, then we will increase the DMO,” Bahlil said on Monday.

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He stressed that meeting domestic demand would remain the government’s top priority, with exports permitted only after local needs are fulfilled.

The government is still assessing the appropriate balance between domestic supply security and the sustainability of the coal mining industry, Bahlil added.

Indonesia produced about 790 million tonnes of coal in 2025, with roughly 65% exported and about 32% allocated to the domestic market. The country supplies around 43% of globally traded coal.

Indonesia Mining & Energy Forum (IMEF) chairman Singgih Widagdo said a lower production target combined with stable domestic demand would automatically push up the DMO share as a percentage of output, forcing miners to limit exports.

“Companies will need to recalculate their export plans, because DMO compliance is mandatory,” he said.  

Editing by Reiner Simanjuntak