Indonesia’s off-grid coal use surges

By Sara Schonhardt | 01/29/2026 06:15 AM EST

“Captive coal” is increasingly powering the nickel and aluminum industries, even after the country banned new coal plants.

A tugboat pushes a barge carrying coal on Mahakam river in Samarinda, East Kalimantan, Indonesia.

A tugboat pushes a barge carrying coal on Mahakam river in Samarinda, East Kalimantan, Indonesia. Dita Alangkara/AP

Indonesia’s coal use is rising, despite an initiative formerly backed by the United States to help the country shift from coal to clean energy.

That increase is driven overwhelmingly by off-grid coal used to power industrial activity, particularly nickel and some aluminum smelting, according to new research from the Centre for Research on Energy and Clean Air and the Global Energy Monitor. Indonesia is the world’s largest producer of nickel and one of the largest coal producers and consumers.

The study finds that 31 gigawatts of so-called captive coal projects are operational or in development. That’s three times more captive coal capacity than in 2023 and roughly equal to Germany’s entire coal fleet, according to the report.

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The total covers 19.3 GW of captive coal in operation, 3.6 GW under construction and 8.1 GW in planning stages.

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