INDOPOSCO.ID – Public policy analyst and Head Researcher of NEXT Indonesia Center, Ade Holis, says the government’s plan to reinstate a coal export levy starting in January 2026 could boost state revenue by as much as Rp19 trillion within a single fiscal year.
The estimate is based on a study by NEXT Indonesia Center that does not yet include lignite, or low-grade young coal, in its calculations.
“This revenue simulation only covers commodities under HS code 2701, namely coal and coal briquettes. Lignite, which falls under HS code 2702, has not been included. If lignite were also subject to the export levy, the revenue potential would certainly be higher,” Ade Holis said in a statement in Jakarta on Sunday (December 21, 2025).
He explained that the research was conducted in response to the government’s plan to reactivate the coal export levy after nearly two decades of exemption. The last time Indonesia imposed an export levy on coal was in the 2005–2006 period.
According to Ade, the policy is not solely aimed at increasing state revenue, but also at ending what he described as an “implicit subsidy” for coal, which has long benefited from export duty exemptions.
Based on simulations by NEXT Indonesia Center, potential state revenue in 2026 is projected at Rp11.7 trillion under a pessimistic scenario, Rp15 trillion under a moderate scenario, and up to Rp19 trillion under an optimistic scenario.
The calculations assume an export levy rate of 2.5 percent, positioned as a midpoint within the 1–5 percent range previously outlined by Finance Minister Purbaya Yudhi Sadewa.
In addition to the levy rate, the simulation factors in export volumes, the Export Benchmark Price (HPE), and projections of the rupiah exchange rate against the US dollar, focusing specifically on coal exports classified under HS code 2701.
“The calculations are based on the framework set out in the 2005 Finance Ministry regulation, when the coal export levy was first introduced,” Ade said.
Nevertheless, Ade stressed that the export levy should not be viewed merely as a tool to increase state revenue. More broadly, he said, the policy could serve as a strategic instrument to encourage downstream processing, ensuring that coal is not simply exported in raw form but processed domestically into industrial inputs with greater economic value.
During the period of export levy exemptions, state revenue from the coal sector has relied solely on production royalties and fixed mining fees. According to data from the Ministry of Finance, revenue from these sources reached Rp77.9 trillion in 2024, accounting for around 13.33 percent of total Non-Tax State Revenue (PNBP).
With the reintroduction of the export levy, this natural resource commodity is expected to make a more substantial contribution to state finances. However, Ade cautioned that the policy also carries risks, particularly in terms of Indonesia’s coal competitiveness in the global market.
He noted concerns among industry players about potential margin compression, amid a global downturn in coal prices and rising mining operational costs.
According to him, the government must carefully consider the international market’s sensitivity to price changes.
“The key to the success of this policy lies in timing and adaptive regulatory design. For example, through a transparent levy formula where the export duty is applied optimally when prices are high, and relaxed or suspended when market conditions weaken,” he said.
Even so, data from the International Trade Center (ITC) indicate that Indonesia’s coal competitiveness remains relatively strong. Over the 2020–2024 period, Indonesian coal prices averaged 32.6 percent lower than the global average.
“This means that even with an export levy of up to 5 percent, Indonesian coal producers would still have sufficient room to compete in the international market,” Ade said, as quoted by Antara.
To strengthen the policy’s effectiveness, he suggested that the government consider a tiered tariff structure aligned with price movements and coal quality.
Integrating the export levy policy with the downstream development agenda, along with regular evaluation mechanisms, is also seen as crucial to ensuring a swift and appropriate response to global market dynamics.
“With a flexible, data-driven approach, the coal export levy can function not only as a revenue-generating instrument, but also as a strategic tool to build a more sustainable and competitive national energy sector,” Ade concluded. (aro)
