World’s Biggest Thermal Coal Exporter Revokes Rules As Buyers Divert

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  • Indonesia revokes rules requiring domestic ships for some exports, as the government foresees that it would be disruptive for exports.
  • The rules require exporters of coal and palm oil to use domestic shipping companies for shipments.
  • Indonesian shipping companies do not have enough vessels to cater for Indonesia’s exports of the fuel. 
  • A number of coal buyers from Japan have diverted their purchases from Indonesia due to uncertainties over the implementation of the rules.

Indonesia’s government revokes regulations requiring exporters of coal and palm oil to use domestic shipping companies for shipments, reports Maritime Logistics Professional.

What is the regulation?

Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said that Indonesia’s government will revoke rules requiring exporters of coal and palm oil to use domestic shipping companies for shipments.

To know more read our article New Shipping Rules Could Affect Export Demand!, Says ICMA

The world’s biggest thermal coal exporter, issued regulations in 2018 requiring its coal and palm oil exporters to use domestic shipping companies. These regulations were due to come into force this May.

Disruptive for exports 

Pandjaitan said that President Joko Widodo has ordered to revoke the rule as the government foresees that it would be disruptive for exports.

He said, “In this current situation, we should not disrupt (exports), so in a recent meeting the President decided the Trade Ministry regulation should be revoked.”

Reason for this move

  • A coal miners group has complained that Indonesian shipping companies do not have enough vessels to cater for Indonesia’s exports of the fuel. 
  • The country is targeting exports of 395 million tonnes of coal this year.

According to The Indonesia Coal Miners Association, a number of coal buyers from Japan have diverted their coal purchases from Indonesia due to uncertainties over the implementation of the rules.

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Source: Maritime Logistics Professional