Coal demand could overtake supply growth in coming years

The current reluctance to finance coal projects still sees the pandemic and the Russia-Ukraine war as major obstacles.

While supply-side concerns come after adverse weather conditions hit production in countries like Indonesia and Australia in 2022, the shift in traditional post-war trade flows continues. All of which pushed global thermal coal prices to record highs this year. Meanwhile, additional demand from Europe, which has imposed sanctions on Russian coal, could also deplete Asian supply, especially for high-CV coal.

Coal is a backup raw material until a cost-effective and equally reliable replacement is found, while renewable energy sources are currently considered unreliable due to outage and storage concerns.

To fulfill its commitment to reduce its national emissions by 29% in 2030, Jakarta is expected to use renewable energy sources for 23% of its needs by 2025, rising from the current level of approximately 12%.