An Analysis of Determinants and policies of Indonesian Coal Export

Abstract

This study aims to analyze in depth the development of coal prices, production, exchange rates and exports for the period 2005-2024, to determine and analyze the Indonesian government's policy in setting coal export quotas through the Domestic Market Obligation (DMO) mechanism and to analyze in depth the influence of prices, production and exchange rates on Indonesian coal exports for the period 2005-2024. The analytical methods used in this study are qualitative and quantitative. The analytical tool used is multiple linear regression. The results of the study show that during the period 2005-2024, the average development of international coal prices in the period 2005-2024 was 10.71 percent per year. Then the average development of coal production during 2005-2024 was recorded at 10.19 percent per year. On average, the annual development of the exchange rate was recorded at 3.03%. The average annual development of coal exports reached 6.87. Indonesia's coal export quota policy, through the Domestic Market Obligation (DMO), is essentially a compromise strategy between national interests and the interests of the mining industry. By requiring a minimum of 25% of production for domestic needs, the government ensures a stable energy supply for PLN (State Electricity Company) and industry, albeit lower than international prices. The DMO has proven vital to maintaining national energy security, electricity tariff stability, and state revenues. The success of this policy depends heavily on consistent government oversight, company compliance, and the adaptation of the national energy system to global market dynamics and the sustainable energy transition. Multiple linear regression results indicate that prices, production, and the exchange rate have a positive and significant impact on Indonesia's coal exports from 2005 to 2024.