Category: Commodities

Bahlil Lahadalia, Minister of Energy and Mineral Resources has stated that Indonesia will start to utilize nuclear power plant by 2030 as laid out in the 2025-2034 Electricity Supply Business Plan (RUPTL). According to Bahlil, nuclear power plants are new, cheap energy sources, and can be used to strengthen the national electricity system. In addition, the use of nuclear will also reduce the use of fossil fuel-based electricity.

The government through the Ministry of Energy and Mineral Resources has proposed an increase of crude oil and liquefied petroleum gas (LPG) import from the United States by around US$10 billion, as part of tariff negotiations. If this is agreed, Indonesia will source nearly one-third of its import from USA, which could affect the country’s relationship with other countries.

During President Prabowo Subianto’s official visit to Abu Dhabi, Indonesia and the United Arab Emirates (UAE) have strengthened their strategic partnership with the signing of eight bilateral cooperation agreements, spanning a wide range of sectors from energy transition and food security to security, trade, and cultural and religious cooperation.

Other than pausing tariffs for some countries, which led to recovery in both equity and commodities markets, US President Donald Trump issued an executive order to revitalise the country’s coal industry. While some share doubts about its success this time around, the decision contributed to downfall of thermal coal price. 

Trump’s sweeping tariffs and China’s counter measures might slowdown energy transition program worldwide. Downfall of fossil fuel is seen a disincentive for renewable energy. Some investors, however, continue to invest in renewable energy projects in Southeast Asia.

Newcastle thermal coal dropped 2.4% to US$97 per ton last Friday (Apr 4) to tracking other commodities. Even before Trump’s sweeping tariffs, the commodity, which is the largest export for Indonesia, has fallen significantly on weaker demand and robust supply.

So, nickel miners have reportedly sent a letter to President Prabowo Subianto protesting a plan to raise royalty for the commodity. Financial report of Trimegah Bangun Persada (NCKL) or Harita Nickel, however, suggested a substantial increase in royalty would do little to impact profitability. 

Prabowo’s brother Hashim Djojohadikusumo has criticized the Just Energy Transition Partnership (JETP), calling it a failure because of the lack of funding for Indonesian renewable energy projects. If we go back to 2022, Indonesia secured US$20 billion funding commitment for energy transition funds through JETP from developed nations and international organizations. However, according to Hashim, the United States has yet to fulfil its commitments.