Six Incentives for Coal Producers Developing Downstream Projects


To boost value-added products, the government has prepared a series of incentives for coal producers developing downstream projects. The Energy and Mineral Resources (ESDM) Ministry stated that the government had already prepared six incentives. First, the government will reduce the coal royalty rate for coal gasification projects to zero percent; followed by setting up special prices for coal for gasification projects at the mine gate in second.

Third, issuing the Mining Business License (IUP) according to the economic age of the coal gasification project; fourth, granting a special tax holiday according to the economic age of the project; fifth, the exemption of value-added tax (VAT) for coal-into-syngas processing services, sixth, the exemption of VAT on engineering, procurement, and construction (EPC) for local content.

Director-General of Mineral and Coal Ridwan Djamaluddin said the government would keep encouraging business entities to carry out downstream coal projects. "Later on [after the coal gasification project into dimethyl ether in PT Bukit Asam Tbk, in collaboration with Air Products & Chemical Inc and PT Pertamina], several other projects will follow suit because the downstream sector is a law mandate," he said, Tuesday (25/1).

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