Rising biodiesel costs and declining coal prices burden Indonesia’s coal industry
Tuesday, September 23 2025 - 06:51 AM WIB
Indonesian coal companies are grappling with increasing production costs, driven in part by the higher price of biodiesel B40, as global coal prices continue to decline.
Verisca Hutanto, Commercial Director at PT Bukit Asam Tbk (PTBA), highlighted the challenges caused by the higher cost of B40, which is more expensive than conventional fuel. "With no subsidies for B40 anymore, we are facing significant increases in operational costs," Verisca said during the CT Asia 2025 forum in Jimbaran, Bali. The use of B40 has also raised logistics costs, especially for PTBA, which has to transport coal over long distances from mines to ports. "This increase in logistics costs will substantially raise overall production expenses," she added.
Similarly, Kurnia Ariawan, President Director of PT Kideco Jaya Agung, reported that B40’s high cost has added up to 20% to the company’s fuel expenses. Kideco, which produces about 30 million tons of coal annually, requires 350 million liters of B40. With a price disparity of up to IDR 3,000 per liter between B40 and conventional fuel, Kideco faces an additional cost of around IDR 1.05 trillion annually. "The extra costs are substantial," Kurnia noted.
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In addition to rising fuel costs, coal producers are facing pressure from falling global coal prices. Priyadi, Chairman of the Indonesian Coal Mining Association (APBI), revealed that the price of coal has dropped significantly, influenced by geopolitical tensions and global energy market uncertainty. "Coal prices, which were around US$130 per ton in 2024, have fallen below US$100 per ton this year," Priyadi said. This price drop has led to adjustments in production strategies and investment plans across the industry.
Priyadi emphasized that the decline in coal prices presents a significant challenge for Indonesia’s mining sector, underscoring the need for cross-sector collaboration and adaptable government policies to stabilize the market, protect investments, and maintain competitiveness amid global geopolitical shifts.
Editing by Alexander Ginting