What has happened since the war in Ukraine
Indonesia set to meet global energy demand with coal
The impact of the war in Ukraine on energy prices led to an increase in coal exports from Indonesia, with the world’s largest coal exporter benefiting from higher prices. After a voluntary ban on coal exports in January, monthly coal shipments were above the pre-pandemic average and Indonesia has signaled it wants to produce and export more coal to meet global demand.
Indonesia wants to push for the B35
Indonesia’s Ministry of Energy and Mineral Resources recently announced a further increase in the minimum biodiesel blend requirement to 35%, indicating that new biodiesel named B35 could be the new mandate by the end of July. The ministry’s drive to switch to a higher blend of biodiesel can be seen as a positive in terms of reducing vehicle emissions, but it will have implications for the national palm oil supply.
Indonesia banned palm oil exports last April to ensure a stable domestic supply of cooking oil. Since then, the ban has been lifted and export levies waived until August 31. However, months of export restrictions led to a glut of supply and a drop in prices. Raising the mandatory biofuel content of biodiesel to 35% could address the current oversupply in the domestic market, although this may result in higher domestic cooking oil prices.
Delayed until further notice
Indonesia was to impose carbon taxes in April 2022 under the Tax Regulation Harmonization Act of 2021. The new law would have charged $2.1 per ton of carbon to coal-fired power plants, but was postponed indefinitely.
The EV roadmap has takers
Indonesia’s strategy to develop its electric vehicle market is largely supported by its reserves of nickel, the key product used in the production of batteries for electric vehicles. In 2022, Hyundai Motors rolled out its first electric vehicle produced in Indonesia after inaugurating the vehicle factory in March 2022 and the electric vehicle battery factory in September 2021. More recently, the Indonesian Investment Coordination Board announced that Volkswagen would invest in Indonesia to develop a battery for electric vehicles. ecosystem in the year.