Indonesia’s thermal coal market is heading into the next few months with two policy questions. The first is a critical one over the 2026 Indonesian coal production target from the current official level of 600 Mt. The second is how the country’s new commodity export consolidation system will affect Indonesia thermal coal exports in practice. These issues are important for international thermal coal markets and particularly major Asia-Pacific buyers of Indonesian coal.
The text below is a shortened version of an Insight originally published on CRU Online, dated 18 August 2026. For the full version, contact us here.
We expect Indonesian coal production to exceed its current 2026 target
The Indonesian government publishes official national coal production estimates. While government figures are inflated, we use these estimates and targets in the analysis below to illustrate problems with Indonesia’s own 600 Mt 2026 coal production target. In other words, all numbers in the analysis below assume government estimates are correct to facilitate a like-for-like comparison with the production target. CRU’s estimates of Indonesian coal production are lower than the government’s and are based on a wider range of data sources which are more consistent with industry trade and power data – the CRU Thermal Coal Market Outlook provides more information. If interested, you can directly request a demo here.
Official Indonesia data shows thermal and metallurgical coal production reached ~367 Mt in 2026 H1, with 231 Mt for exports and the remainder destined for domestic demand and stockpiles. Thus, 2026 H1 production already accounts for ~60% of the 600 Mt target. We expect only a modest h/h increase in 2026 H2 coal demand. Indonesian nickel production coal demand will be under pressure in 2026 H2 due to uncertainties in nickel production quotas.
If the 600 Mt target is enforced, Indonesia thermal coal exports would need to fall dramatically from ~227 Mt in H1 to ~103 Mt in H2, severely tightening a seaborne market that totals ~1 bn t/y. Indonesian thermal coal prices would rise dramatically, with all prices increasing and FOB Indonesia 3,800 kcal/kg spot prices approaching medium-grade prices.
Even if the government was to announce an upward revision for the Indonesian coal production target to below or equal to 700 Mt, we assume it will record final 2026 production at a level above 700 Mt. If the target is revised to 750 Mt, the market would be closer to a ‘balanced’ state. This is the scenario reflected in our Thermal Coal Market Outlook base case.This would still result in modest market tightness, but it would avoid many of the more severe consequences associated with lower production targets.
Single-window export policy expected to only have a mild effect on Indonesian thermal coal exports
The second policy issue is Indonesia’s commodity export consolidation, or the ‘single-window’ export policy that has been widely publicised. Thermal coal exporters will still reportedly transact directly with buyers abroad. The start of the full implementation is scheduled for 1 September 2026 based on reports. It is unlikely that the new framework will suddenly remove large volumes of Indonesia thermal coal exports from the market over the next several months. However, the policy change could still disrupt the market as new procedures and delays create significant administrative burdens.We expect mildly reduced transaction volumes while the market adjusts to new procedures.
CRU thermal coal market forecasts consider both uncertainties
The Indonesian government is unlikely to leave its 2026 coal production target at 600 Mt. The forecasts in our CRU Thermal Coal Market Outlook (including for Indonesian supply and prices) already assume an upward revision to the target. Therefore, our price forecasts are more moderate than the sharp price increases that would result from enforcing a low Indonesian coal production targetThe effect from the introduction of commodity export consolidation will be real but limited, and more details are discussed in the report we provide as part of the Thermal Coal Market Outlook – if interested you can directly request a demo here.
If you would like to know more about how Indonesia’s policies affect thermal coal markets, contact us. We would be more than happy to have a discussion.
