Coal is a fossil fuel which is one of the main causes of greenhouse gases, especially CO2, which causes global warming and climate change. Even though this fuel is cheap and available in abundance in Indonesia, its use will be increasingly reduced over time to achieve safe conditions for the earth. Indonesia is the 5th largest coal producer in the world with production of around 570 million tons per year with reserves reaching 38 billion tons, the main production of which is on the islands of Sumatra and Kalimantan. A large coal company in Indonesia can produce 50 million tons of coal every year.
Policies to reduce consumption of fossil fuels, especially coal, also continue to be implemented globally. For Asia, for example, Japan and Korea with their Feed in Tariff and Renewable Portfolio Standard (RPS) are leading the way in the use of renewable energy, especially wood pellets. Meanwhile in Europe, with the Renewable Energy Directive II (RED II), renewable energy is targeted to reach 32% by 2030, biomass fuel is predicted to reach around 75% of the share of renewable energy and the target is that coal will not be used completely by 2050. Germany has announced that it will not use coal. By 2038, the UK is even targeting no longer using coal for its electricity production starting October 2024. North America, namely the United States and Canada as members of the G7, are also committed to reducing coal consumption, in 2018 Canada even announced regulations to no longer use coal for electricity generation by 2030. On the other hand, coal power plant construction projects funded by China in various countries have collapsed. Plus, the G7 countries (Canada, France, Germany, Italy, Japan, England and the United States) are aggressively blocking the use of coal. Countries that still support coal use, such as China and Indonesia, are increasingly isolated and could face more pressure to stop such activities.
Seeing the world energy trend which is starting to decarbonize, many coal companies are then developing new businesses in the renewable energy sector. A number of coal companies are known to have planned to produce large capacity wood pellets and also become palm kernel shell (PKS) exporters. And seeing the global trend in the use of renewable energy which continues to increase, especially biomass fuel, it is possible that in the near future they will immediately execute this plan. With the large profits from the coal business, developing new businesses should also be easier.
For these coal producers whose business sector is in the energy sector, marketing these biomass fuel products should not be difficult. Wood pellets and palm kernel shells / pks can be used as fuel in power plants just like coal. In fact, a number of coal-fired steam power plants also use certain amounts of biomass fuel which is mixed with coal, namely by cofiring. In fact, biomass fuel can be used 100% in certain types of technological power plants such as stokers and fluidized beds. As both products for energy, more specifically solid fuels with the same users, it is indeed easier for coal companies to develop into the wood pellet industry and export palm kernel shells / pks.
In contrast to palm kernel shells / pks which is waste or by-product from palm oil mills or CPO mills which are obtained by collecting from palm oil mills, wood pellet production for large capacities requires a stable and sustainable supply of raw materials with one of the best options being wood from energy plantation. Energy plantations with a certain area need to be created according to the wood pellet production targets to be achieved. Post-mining land can be reclaimed for energy plantations. And for coal companies developing renewable energy also gives a positive image because it contributes to the decarbonization program and if in time the coal business has to be reduced or even stopped, they will be ready with a new business in the form of renewable energy.
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