Utility companies across Asia are racing to address the threat of critical coal shortages after Indonesian mining firms suspended spot coal exports in protest against a proposed government policy to cap production as several Asian nations that rely heavily on Indonesian coal imports now face the risk of power disruptions if supplies tighten.
According to Reuters, an official at an Indonesian coal mining company said shipments tied to long-term contracts will continue. However, spot deliveries will be restricted until a final decision on production quotas is reached. The official also warned that even some long-term contracts could be jeopardized as miners confront unforeseen challenges.
Indonesia accounted for roughly half of global thermal coal exports in 2025 and remains the largest supplier to major importers such as China, India, Vietnam, and the Philippines.
The government’s proposal to cut production and introduce quotas comes amid weakening global coal prices, with authorities aiming to support export prices and boost tax revenues.
Mining companies have cautioned that enforced production cuts could trigger layoffs and mine closures, placing additional pressure on the government to secure a compromise before mining operations and export flows are disrupted.
Jakarta has previously demonstrated a willingness to intervene in the sector. In 2022, Indonesia temporarily halted coal exports due to supply shortages at domestic power plants, a move that caused global prices to surge. Benchmark seaborne Asian thermal coal futures have already climbed 9 percent to their highest level in over a year following the latest intervention.
Prices may continue to rise as major importers respond to the prospect of reduced Indonesian supply and seek alternative sources from other exporters and trading firms.
Data from commodity intelligence firm Kpler shows that 16 countries imported at least 1 million metric tons of Indonesian thermal coal in 2025, ranging from Brunei to China and covering many of the world’s largest coal consumers. However, reliance varies widely. While China and India largely depend on domestic mines, several South and Southeast Asian countries rely almost entirely on imports to power coal-based electricity systems.
A sustained decline in Indonesian coal shipments would therefore have far-reaching consequences. Asian utilities are already under pressure to meet peak regional heating demand while depending on coal for more than half of their power generation.
The Philippines, Bangladesh, Viet Nam, and Malaysia are considered the most vulnerable to supply disruptions. Kpler data identifies the Philippines as the most dependent buyer in 2025, sourcing 98 percent of its coal imports from Indonesia. Energy think tank Ember reported that coal generated about 57 percent of the country’s electricity last year.
Bangladesh imported more than 90 percent of its coal from Indonesia in 2025 and raised coal’s share in its power mix to a record high. Meanwhile, Malaysia and Viet Nam each sourced over half of their annual coal supply from Indonesia and rely on the fuel for at least 40 percent of their utility electricity.
The situation underscores Indonesia’s pivotal role in global coal markets and highlights the potential ripple effects that domestic policy shifts could have on regional energy security.
Source: Indonesia Business Post
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<p>Time: November 2025<br /> By: WTO and International Trade Group, Legal Department – VCCI</p>
