News that Indonesia's coal imports from the United States (US) surged 158.4 percent in the first quarter of 2026 has been widely discussed on social media. Many have questioned the validity of this situation: Indonesia is known as one of the world's largest coal producers and exporters, so why is it buying from the United States? Official data confirms the surge, but the context behind it is far more complex than the figures.
Complete Data
According to the Quarterly Coal Report released by the US Energy Information Administration (EIA), US coal exports to Indonesia in January–March 2026 reached 1.74 million short tons, a 158.4 percent jump compared to the same period the previous year, which was only 673,608 short tons. Compared to the fourth quarter of 2025, the volume still increased from 1.32 million short tons.
With this achievement, Indonesia was recorded as the second-largest destination for US coal exports in the Asian region after India, as well as being among the top three destinations for US coal exports globally in the first quarter of this year. India still dominates with 7.46 million short tons, or more than half of the total US coal exports to Asia, which reached 13.08 million short tons. Behind Indonesia are South Korea with 1.66 million short tons and Japan with 1.48 million short tons.
Globally, US coal exports were recorded at 23.69 million short tons in the first quarter of 2026, with an average price of US$114.22 per short ton. This export surge comes amid a slump in US domestic consumption, which fell 11.4 percent year-on-year, as the US power sector continues to reduce its reliance on coal.
Not for coal-fired power plant fuel
A crucial point often overlooked in public discussion is the type of coal imported. The Ministry of Energy and Mineral Resources (ESDM) emphasized that the coal imported from the US is metallurgical coal, or coking coal, not the thermal coal that Indonesia has historically relied on as fuel for steam-fired power plants (PLTU).
Metallurgical coal has a high calorific value and special physical properties that allow it to be processed into coke through heating at extreme temperatures without air. This coke functions as both fuel and a reducing agent in blast furnaces, converting iron ore into steel, a role that thermal coal cannot replace. The problem is, although Indonesia is the world's second-largest producer of thermal coal, domestic coking coal reserves are very limited. For years, approximately 80 percent of national coke needs have been met through imports from various countries. So, this isn't a question of "why a coal-producing country still imports coal?" but rather two types of coal with completely different functions.
The aftermath of the RI-US trade agreement
This surge in imports is inextricably linked to the Indonesia-US trade agreement. President Prabowo Subianto and President Donald Trump signed the Agreement on Reciprocal Trade (ART) in Washington, D.C., in February 2026. Under this agreement, Indonesia received a 19 percent reciprocal tariff on its products entering the US market, down from the initial threat of 32 percent, on the condition that it remove tariff barriers for more than 99 percent of US products entering Indonesia.
One point in the agreement document stipulates that Indonesia is obliged to facilitate and encourage increased imports of coking coal from the US to support the steel industry, domestic industrialization, and national energy reliability and security. This commitment is part of a commercial energy cooperation worth approximately US$15 billion, which also includes the transfer of advanced coal processing technology from the US, including for building materials, battery components, carbon fiber, and synthetic graphite. The agreement itself is still awaiting ratification by the Indonesian House of Representatives before it becomes fully effective.
Why Continue Importing Despite Being Rich in Coal?
Throughout 2025, national coal production will reach 790 million tons, with 514 million tons, or 65.1 percent, exported, equivalent to 43 percent of the total global coal trade volume of 1.3 billion tons per year. However, almost all of this production is thermal coal for coal-fired power plants, not coking coal for the steel industry.
Domestic demand for coking coal is expected to continue to rise in line with Danantara's plan to build a new steel plant with a capacity of 3 million tons per year. Meanwhile, the surge in coke demand from China and India in recent years has made this commodity increasingly competitive in the global market.
Several analysts believe this policy is more appropriately interpreted as a strategy for securing industrial raw material supplies, rather than a policy contradiction. Diversifying coke sources is considered to strengthen energy security and mitigate geopolitical risks, a pattern also used by Japan and South Korea when building their industrial foundations through imports of strategic raw materials.
Notes from Industry Players
Domestic coal entrepreneurs continue to urge that this obligation should not lead to long-term dependence. The Indonesian Coal Producers Association (APBI) stated that import policies should not erode domestic coal absorption, which can still be used for certain technical needs. While acknowledging that Indonesia still needs premium-quality metallurgical coal, which domestic production cannot yet meet.
Going forward, the direction of downstreaming policies and exploration of domestic metallurgical coal reserves, which were initiated by the Ministry of Energy and Mineral Resources (ESDM) in several regions of Kalimantan, will determine whether Indonesia can reduce its dependence on coke imports in the long term or become increasingly tied to US supplies within the framework of the signed trade agreement.
