Indonesia’s Coal Windfall Tax Could Yield $3.8 Billion for Renewable Funding

*TL;DR: Indonesia’s proposed windfall tax on coal could generate up to Rp66.03 trillion ($3.79 billion). 350.org calls for the funds to be redirected to renewable projects rather than fossil‑fuel subsidies.

Context Indonesia plans to impose export duties and a windfall tax on coal producers. The move arrives as the 2026 state budget earmarks more than Rp380 trillion for fossil‑fuel subsidies and payments to state‑owned firms Pertamina and PLN. Analysts note that the budget assumes oil at $70 per barrel, while market prices hover near $100, creating a fiscal gap the government must fill with debt or cuts.

Key Facts - The windfall tax could bring the state up to Rp66.03 trillion, roughly $3.79 billion, according to government estimates. - Indonesia’s 2026 budget allocates over Rp380 trillion to keep fossil fuels cheap and to compensate Pertamina and PLN. - 350.org’s Indonesia country manager, Sisilia Nurmala Dewi, says taxpayers are paying three times: subsidising cheap fossil fuels, covering higher energy bills when subsidies end, and funding climate‑damage repairs. - Global data shows more than 90 % of new renewable projects cost less than comparable fossil projects. In Indonesia, decentralized solar with battery storage could cut electricity generation costs by about 20 %.

What It Means If the windfall tax proceeds, the government faces a choice: continue funding a fossil‑fuel system that costs taxpayers billions, or invest the revenue in clean energy that can lower long‑term electricity prices. Redirecting the tax to renewables could reduce Indonesia’s exposure to volatile oil and gas imports, stabilise the state budget, and free fiscal space for social programs. Solar‑plus‑storage projects, already cheaper than new coal plants, could lower household energy bills and lessen the fiscal burden of future subsidies.

Looking Ahead Watch how Indonesia allocates the windfall tax proceeds and whether the budget revision shifts from fossil subsidies to renewable investments in the coming fiscal year.