<![CDATA[Fossil fuel still dominates the primary energy use in Indonesia. According to Ministry of Energy and Mineral Resources, fossil fuel counts to almost 50% of final energy usage in 2005. As a consequence, government should manage this over-dependency, since fossil fuel is a non-renewable resource in nature, thus, scarcity becomes problem. Coal is the primary candidate for the substitutes, since some researches reveal that coal reserves are able to fulfill the national demand for the next 100 years. The government has formulated an act on energy diversification and set the target of coal usage may contribute to at least 33% of primary energy mix in 2025. To achieve this target, however, the government needs to develop policies both on supply and demand side. On the supply side, the government has issued the Act Number 4 Years 2009, which changes the regulations on mining activities. Accordingly, there are still some disputes, especially on the terms of divestment period. The government should accommodate the mining companies’ financial objectives by providing longer period for them in order to obtain reasonable profit. On the demand side, the government should develop new demand for final energy derived from coal. Coal liquefaction is an promising alternative in order to widen the coal market for household users.]]>
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