E-ISSN: 2963-3699

P-ISSN: 2964-0121

Homepage: Homepage: https://return.publikasikupublisher.com

This work is licensed under CC BY-SA 4.0

DESIGNING THE COAL DOMESTIC MARKET OBLIGATION COMPETITIVENESS

POLICY THROUGH SUSTAINABLE BALANCED SCORECARD AND SWOT

ANALYSIS (INDUSTRY LEVEL ANALYSIS OF INDONESIA)

Ginanjar Maulana

School of Business and Management Bandung Institute of Technology, Indonesia

gmlana71@gmail.com

ABSTRACT

Starting from the problem of government policy regarding DMO on coal, it is important to examine the

implications of DMO on the level of competition of the national coal industry in the global market arena.

Therefore, the research wants to examine the competitive sources of finance of the national coal industry,

and develop strategies to improve sustainable and superior performance so that it can indeed compete in

the global market. This approach is qualitative. The research location is the coal industry in Indonesia.

The research time is one time, yes it is 2023. Data collection techniques are literature review and

document study. Data analysis techniques use the Sustainable Balanced Scorecard (SBSC) model

combined with competitive advantage sources, and equipped with SWOT analysis. The results found

that the sources of Indonesia's coal competitive advantage are: (i) The.biggest in the industry. (ii)

Distance-low transportation cost. (c) Size (large industry size), (d) Strong market share. Then six

strategies were proposed to improve sustainable performance in order to compete in the global market.

The six strategies are basically a combination of production strengths, coal quality weaknesses,

environmental issues, and the development of environmentally friendly technology, as well as

technology that can improve coal quality, and can make coal not only for the benefit of energy sources.

Keywords : Competitive advantage; Sustainable Balanced Scorecard; Strategy; DMO

INTRODUCTION

Coal is one of the fossil fuels which is the most important energy source for power

generation and serves as a staple fuel for the production of steel, cement, to textiles (Yulia &

Chandriyanti, 2021). Until now, Indonesia is still very dependent on fossil energy sources. About

88% of electricity is generated from fossil power plants, with 60% of it coming from coal, 20%

from natural gas, 6% from petroleum, and only 12% from renewables. Therefore, since the late

1970s, coal has become a strategic commodity and a reference for national energy policy (Natalia

et al., 2022).

However, at the same time, Indonesia's coal reserves are also used as a strategic export

commodity which is the main priority. Indonesia plays an important role in the global coal market.

ESDM data (2018) shows that Indonesia ranks fifth in coal producers, and coal exporters with the

second largest rank in the world. The revenue obtained from coal exports is one of the definite

sources for the state budget (Natalia et al., 2022).

Persaoal, only 21% of Indonesia's coal is used domestically. This often has an impact on

coal shortages in the country. Even in the period 2009-2011 there was a scarcity of coal in the

market. At that time, domestic industries using coal had difficulty getting coal supply, because

coal producers were more interested in exporting coal than selling it domestically (Haryadi &

Suciyanti, 2018). Even though domestic coal demand continues to increase, along with Indonesia's

population that continues to increase, and has become 273 people in 2020 (Worldometer, 2022).

Therefore, it is not surprising that since 2018 the government has imposed a Domestic

Market Obligation (DMO) policy. The DMO policy is motivated by the problem of not meeting

the minimum percentage of coal sales for domestic users by holders of exploration and

exploitation permits and coal production operations, and demands about the low utilization of

coal for domestic coal users. Meanwhile, at the same time, coal export activity is relatively high.

Therefore, DMO is considered as a form of coal management policy so that coal-rich Indonesia

is not used as an exploration sunmber for foreign parties (Jazuli, 2015). The regulation on DMO

regulates the fulfillment of national coal needs by 25% of the total production in the Annual Work

Plan and Cost Budget (RKAB) with a percentage of 80% fulfillment for electricity (PLN and

Independent Power Producer / IPP) and 20% for other domestic sectors (Alkanu et al., 2020).

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced 
Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)  
 
1241 
Return: Study of Management Economic And Business, Vol 2 (12), December 2023 
The problem then does not stop only until the implementation of the DMO. There is still a 
lot of homework related to the national coal industry after the DMO is implemented. One of the 
problems that will be faced by the national coal industry is about the competitive advantage of 
national coal in the global market. The competitive advantage of the national coal industry is not 
light, because coal has also been projected as one of the energy sources in sustainable energy in 
2030, which sets the energy composition of the emphasis not only on renewable energy (39.3%), 
petroleum (19.4%), gas (7.8%) and coal (33.5%) (Baskoro et al., 2021). This means that coal will 
increasingly become one of the mainstays of domestic energy sources, which means relatively 
reducing the portion of national coal exports.   
After the DMO policy, the Indonesian government again made a policy of limiting imports. 
From January 1 to 31, 2022, the Indonesian government (c.q the Ministry of Energy and Mineral 
Resources) has adopted a policy of banning coal exports for holders of Mining Business Permits 
(IUP) or IUPK for the Production Operation stage until an indefinite period. The policy is stated 
in Press Release Number: 1.Pers/04/SJI/2022. The policy was carried out by the government in 
an effort to meet the national coal supply for domestic power plants, which affected 10 million 
customers  of  PT  PLN  (Persero).  This  covers  the  electricity  needs  of  the  general  public  to 
industries in Java, Madura, Bali (Jaqmali), and non-Jamali. If the coal export ban is not carried 
out, then 30 Steam Power Plants (PLTU) with a power of around 10,850 megawatts (MW) will 
be affected (Natalia et al., 2022). 
The January 2022 policy is related to the commitment of coal entrepreneurs who supply 
coal to PLN. The realization of coal supply from coal businesses to PLN every bulkan is still 
under the obligation of a percentage of coal sales for DMO or domestic needs. As a result, at the 
end of 2021, it was accumulated that PLN's plants experienced a deficit in coal supply. As of 
January 1, 2022, the percentage of DMO fulfilled is only 35 thousand metric tons (MT) or less 
than 1% of the total 5.1 million MT of reassignment given by the government (Natalia et al., 
2022). 
In connection with this background, the focus of this study is to examine DMO from the 
aspect of competitive advantage at the level of the national coal industry (Indonesia). The main 
reference  for  the  theoretical  thinking  of  this  research  is  Sigalas'  (2015)  article  entitled 
"Competitive advantage: the known unknown concept". The article clearly distinguishes between 
sources of competitive advantage, competitive advantage (Ansoff, 1965; Porter, 1985; Sigalas et 
al, 2013), and the results of competitive advantage, in the form of superior performance (Sigalas, 
2015). 
As for the sources  of  competitive advantage,  it is relatively numerous. Sigalas (2015) 
classifies  sources  of  competitive  advantage  derived  from  three  theories,  namely  sources  of 
competitive  advantage  derived  from:  (1)  Resource-Based  Theory  (Barney  &  Clark,  2007),  (2) 
Market-led theory (Sachs & Yang, 2002), and Industrial organization theory (Tirole, 1988). 
DMO  issues,  the  development  of  the  mining  industry,  and  competitive  advantage  are 
dynamic and complex. Therefore, first of all, all elements of competitive advantage are analyzed 
first by SWOT analysis using the magnitude, importance, and total rating (M.I.R) method (Ferrel 
& Hartline, 2014), so that several strategic choices are obtained for the coal mining industry in 
Indonesia. Then  an analysis is carried out using a  source of  competitive advantage analysis, 
sustainable balanced scorecard (SBSC), and SWOT analysis.   
   
RESEARCH METHOD 
1.  Research approach    
This research uses a qualitative approach. A qualitative approach is a series of interpretive 
techniques that attempt to describe, code, translate, and emphasize meaning rather than numerical 
or frequency of naturally occurring phenomena in the social world.  Qualitative research aims to 
gain an in-depth understanding of a situation  (Cooper & Schindler, 2014; Creswell & Creswell, 2017). 
Among  five  types  of  qualitative  research  methods  (phenomenological,  grounded  theory, 
ethnography, narrative research, and case studies), this study chose the case study method (case 
studies (Creswell & Thompson, 2018). 

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1242 Return: Study of Management Economic And Business, Vol 2 (12), December 2023

Judging from the nature of the study, this study the purpose of descriptive studies is to

obtain data describing the topic of interest. Descriptive studies are typically designed to collect

data that describe the characteristics of objects (such as people, organizations, products, or

brands), events, or situations (Sekaran & Bougie, 2016).

2. Location and time of study

Judging from the research location, the implementation of this research was carried out in

Jakarta. Meanwhile, the research time is a one-time study (cross-section), namely 2023.

3. Data collection techniques

The form of data in this study consists of qualitative data (data in the form of words /

words), and quantitative data (data in the form of numbers / numeric) (Sekaran & Bougie, 2016).

Based on the data source, this study used primary data secondary data. Secondary data is data that

is already available and/or processed by other parties. Secondary data in this study are pre-existing

ones that are processed and provided by other parties (Sekaran & Bougie, 2016). The data collection

techniques include secondary data collection techniques using library research studies.

4. Data analysis techniques

Given that this research is qualitative research, the data analysis techniques in this study

generally use data analysis techniques from Miles, Huberman, and Saldana (2014). Miles et al

2014: 33). suggests that there are four components in qualitative data analysis, namely data

collection, data condentation, data display, and conclusion: drawing/verifying. Specifically, the

data analysis technique in this study uses: (1) sources of competitive advantage theory”, (2)

sustainable balanced scorecard (SBSC), and (3) SWOT analysis. The schema of the stages of data

analysis is as follows:

Graphs 1 Schematic of Analytical Techniques for Source of Competitive Advantage, SBSC and SWOT Analysis

RESULT AND DISCUSSION

National Competitive Strategy of Coal Industry on Global Competition in The Context of

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1243

Return: Study of Management Economic And Business, Vol 2 (12), December 2023

DMO

SBSC analysis has only reached the stage of evaluating the performance of the coal

industry. Furthermore, to obtain the results of the preparation of strategies to improve the

sustainable performance of the coal industry in order to achieve superior performance so as to

win global competition in the context of DMO, further analysis is needed, in this case using

SWOT analysis with magnitude, importance, and total rating (MIR) methods from Ferrel and

Hartline (2017).

Based on this SWOT analysis, alternative strategies will be obtained to improve the

sustainable performance of the coal industry. Alternative strategies include the following

alternatives: (i) S-O (Strengths-Opportunities) strategy, which is a strategy that uses the power of

internal effort to obtain opportunities that exist outside the business. In other words, this strategy

uses internal forces (signatories to PPPs) to take advantage of external opportunities. (ii) W-O

(Weaknesses-Opportunities) strategy, is a strategy that aims to minimize internal business

weaknesses by utilizing external opportunities. In other words, the goal of this strategy is to

improve the internal weaknesses of PPPs signatories by exploiting external opportunities. (iii) S-

T (Strengths-Threats) strategy, is a strategy pursued by a business to avoid or mitigate the impact

of external threats. This strategy uses internal forces (signatories to PPPs) to avoid or mitigate

the impact of external threats. (iv) W-T (weaknesses-threats) strategy, which is a strategy of

defending by reducing internal weaknesses and avoiding threats. It is a strategy that is a defensive

tactic directed at reducing internal weaknesses (PPPs signatories) and avoiding external threats

(David, 2013).

Based on the description above, the order of analysis of chapter IV is as follows: (i)

Integrating sources of competitive advantage (Ansoff, 1965; Porter, 1985; Sigalas et al, 2013)

into four BSC perspectives with the addition of two dimensions of sustainability (social and

environmental). The result of this integration is in the form of a sustainable balanced scored carad

(SBSC) framework with content in the form of competitive advantages. Then a discussion was

carried out one by one on the variables of the competitive advantage of the national coal industry

(Indonesia) in the context of DMO. The results of this discussion are in the form of evaluations

for each of these variables, so that the performance of each variable can be justified quantitatively

in percentage of performance achievements. The end of this sub-chapter is the presence of an

SBSC evaluation matrix in the competitive advantage of the national coal industry. The numbers

in the matrix are based on the results of qualitative evaluation for each variable. Meanwhile, the

weight for each perspective refers to Liang & Wang (2019), namely the financial perspective with

a weight of 30%, the customer perspective with a weight of 15%, the perspective of internal

business processes with a weight of 15%, the perspective of learning and growth with a weight

of 13%, and the environmental perspective with a weight of 20%.

1. Integration of Competitive Financial Variables into the Sustainable Balanced Scorecard

(SBSC) Framework

This subchapter integrates sources of competitive advantage (Ansoff, 1965; Porter, 1985;

Sigalas et al, 2013) into four BSC perspectives with the addition of two dimensions of

sustainability (social and environmental). The result of this integration is a framework

Sustainable Balanced Scored Carad (SBSC) with content in the form of competitive advantage.

Then a discussion was carried out one by one on the variables of the competitive advantage of

the national coal industry (Indonesia) in the context of DMO. The results of this discussion are

in the form of evaluations for each of these variables, so that the performance of each variable

can be justified quantitatively in percentage of performance achievements. The end of this sub-

chapter is the presence of an SBSC evaluation matrix in the competitive advantage of the national

coal industry.

a. Financial Perspective

Together with China and Australia, Indonesia is listed as the largest coal producing country in

the world. Indonesia is a country that has the largest coal reserves in Asia Pacific. Indonesia's

total coal reserves against world coal are 3.7% In terms of production, Indonesia contributes to

producing 9.0% of world coal production, while domestic coal consumption is only 2.2% of

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1244 Return: Study of Management Economic And Business, Vol 2 (12), December 2023

world coal. The rendahanya level of domestic coal consumption shows that Indonesia still has

the opportunity to utilize more coal domestically (ESDM, 2023a).

What is the position of coal in Indonesia's export structure. Indonesian Trade Data shows

that Indonesia's export structure as of January 2023 is dominated by the processing industry

sector, which reaches 70.15% of Indonesia's total exports. Then followed by the mining sector

(21.54%), the oil and gas sector (6.67%), and the smallest is the agricultural sector (1.65%). Coal

is one of the mines of the development sector. Coal is a contributor of 85% to total state revenue

from the mining sector. If the mining sector is calculated for its contribution to Indonesia's

exports, it means that coal contributes 18.30% (Kementerian ESDM, 2022b).

In the context of world coal trade, Indonesia is the largest coal exporter in the world. The

International Energy Agency (IEA) estimates that world coal exports will reach 1.35 billion tons

in 2022. There are seven countries that are the largest exporters of coal. In this case, Indonesia

occupies the position as the world's largest exporter. IEA data states that in 2022, Indonesia

exports coal of 473 million tons, followed by Australia (350 million tons), Russia (192 million

tons), the United States (76 million tons), South Africa (70 million tons), Colombia (53 million

tons), Canada (36 million tons), and other countries (101 million tons) (Sadya, 2023).

Figure 1 The World's Largest Coal Exporter (2022*)

Indonesia as the Largest Exporter of Coal

The volume and value of Indonesia's new stone exports from 2002 to 2022 showed an

increasing trend. Meanwhile, if you only look at the trend between 2021 to 2022, it only increased

slightly in terms of volume, but jumped sharply when viewed from the value of exports. Based

on data from the Central Statistics Agency (BPS), coal exports in 2022 weighed 360.28 million

tons, an increase of only 4.29% compared to the export weight in 2021. However, judging from

the export value, exports in 2022 reached USD 46.74 billion, an increase of 76.16% compared to

2021. The value of coal exports in 2022 is the highest record in the last two decades (BPS, 2023).

Indonesia's benchmark coal price (HBA) throughout 2022 strengthened significantly, HBA

in January was still at the level of USD 158.5 per ton. The HBA value continued to climb until it

reached 330.97 per ton in October 2022. The HBA trend weakened in December 2022, to USD

281.48 per ton. Although it decreased slightly, the HBA in December 2022 (BPS, 2023).

Indonesia sells medium and low quality coal types. Indonesia is able to sell both types of

coal in the international market at competitive prices. This is due to the low wages of Indonesian

workers (Indonesia Investments Report, 2023). Given that Indonesian coal is of low and medium

quality so that it has a lower economic value than high-calorie coal, a program to increase added

value or downstream coal is needed. The program is expected to increase the economic value of

the two types of coal (Kementerian ESDM, 2022a).

The Indonesian government itself has set national energy source and utilization targets

until 2050, which are formulated by the National Energy Policy and the National Energy General

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1245

Return: Study of Management Economic And Business, Vol 2 (12), December 2023

Plan (RUEN). In 2014 the government has established Government Regulation (PP) Number 79

of 2014 concerning the National Energy Policy (KEN) (Peraturan Pemerintah (PP) Nomor 79

Tahun 2014 Tentang Kebijakan Energi Nasional, 2014). This policy is a follow-up to the mandate

of Law No. 30 of 2007 concerning Energy, especially Article 11 concerning KEN. This national

energy policy is prepared based on the principles of justice, sustainability, and environmental

insight in order to create energy independence and national energy security. Figure 4.2 shows the

KEN Targets for the 2015-2050 Period, which includes 6 (six) KEN targets. The six targets

include the role of energy, NRE mix, energy supply, power generation, energy elasticity, and

electrification ratio (Kementerian ESDM, 2022a).

Figure 2 KEN Goals for the 2015-2050 Period

Source: ESDM (2022a)

Based on the scheme in figure 4.2 it appears that: (1) In 2025 the role of New and

Renewable Energy will be at least 23%, and in 2050 at least 31% as long as the economy is

fulfilled. (2) By 2025 the role of petroleum will be less than 25% and in 2050 it will be less than

20%. (3) In 2025 the role of coal will be at least 30%, and in 2050 at least 25%. (4) In 2025 the

role of natural gas will be at least 22% and in 2050 at least 24% (ESDM, 20213a).

b. Customer Perspective

The largest country to which Indonesia's coal exports are exported as of 2022 is India

(90.14 million tons). According to the Central Statistics Agency (BPS), Indonesia's coal exports

to India reached USD 8.8 billion or equivalent to IDR 131 trillion (at an exchange rate of IDR 15

thousand / United States dollar) during January-September 2022. The value of this export soared

205.26% compared to the same period in 2021. The value of Indonesia's coal exports in India is

almost equivalent to a quarter of the value of Indonesia's coal exports during the first nine of 2022

(Kusnandar, 2022).

The other nine countries ranked third to 10th are China (45.85 million tons), Japan (19.47

million tons), Philippines (23.02 million tons), Malaysia (19.33 million tons), Taiwan (14.29

million tons), South Korea (18.99 million tons), Thailand (11.30 million tons), Vietnam (8.51

million tons), and Hong Kong (3.90 million tons) (Kusnandar, 2022).

Coal is the dominant force in electricity generation. At least 27 percent of the world's total

energy output and more than 39 percent of all electricity is generated by coal-fired power plants.

Given the abundance amount, the extraction process is relatively easy, and infrastructure

requirements are cheaper than other energy resources (Indonesia Investment Report, 2023).

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1246 Return: Study of Management Economic And Business, Vol 2 (12), December 2023

Figure 3 Ten Indonesian Coal Export Destination Countries

The challenge of coal export is not light, especially from the aspect of the issue of the

negative impact of coal on the environment. This also has implications for the difficulty of

obtaining support for funding coal projects. Both of these challenges have an impact on the

difficulty of increasing Indonesia's coal export figures in the world market (ESDM, 2023a).

c. Internal Business Process Perspectives

Indonesia is a leading exporter of thermal coal. A significant portion of thermal coal

exported includes medium quality type (between 5100 and 6100 cal/gram) and low quality coal

(below 5100 cal/gram). BP Statistical Review of World Energy, around 60 percent of Indonesia's

total coal reserves consist of low quality coal (sub-bituminous) containing less than 6100 cl/gram

(Indonesia Investments Report, 2023).

As stated by the Indonesian Ministry of Energy and Mineral Resources, Indonesia's coal

reserves are expected to run out in about 83 years if current production levels continue. If

Indonesia's coal reserves are placed in a global context, then Indonesia's global coal reserves

currently rank 9th which is 2.2 percent of total global coal reserves (Indonesia Investment Report,

2023).

There are many pockets of small coal reserves found on the islands of Sumatra, Java,

Kalimantan, Sulawesi and Papua. But the three regions with the largest coal reserves in Indonesia

are South Sumatra, South Kalimantan, and East Kalimantan (Indonesia Investments Report,

2023)

Figure 4 The largest coal reserves in Indonesia

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1247

Return: Study of Management Economic And Business, Vol 2 (12), December 2023

National coal production continues to increase from year to year. Similarly, exports and domestic

use of coal also continue to increase. It's just that most of Indonesia's coal (70-80%) is for export

purposes. Table 1 shows this.

Table 1 Indonesia's Coal Production, Exports, Domestic

Year

Production

Export

Domestic

2007

217

163

2008

240

191

2009

254

198

2010

275

210

2011

353

287

2012

412

345

2013

474

402

2014

458

382

2015

461

375

2016

456

365

2017

461

364

2018

425

311

114

2019

400

160

240

Source: Indonesia Investment Report (2023)

Indonesia has developed a rk25-year coal roadmap until 2045. The national coal

development and utilization road map is focused on developing 10 main programs. The ten

programs were selected according to the characteristics of Indonesian coal, the majority of which

is dominated by low and medium rank coal. The program in the Road Map was also chosen to

answer global and national strategic issues, especially in the provision of more environmentally

friendly energy, increasing the added value of coal through the development of various coal-based

industries, the need to reduce CO2 emissions from coal-fired power plants.

The ten main programs are:

a) Coal potential development program to produce methanol and DME through coal

gasification process, especially low-calorie coal. Methanol and DME products can be used

as energy sources and industrial raw material sources. In addition, DME can be a substitute

for LKPG, so that the use of DME can reduce dependence on imported LPG.

b) Coal development program to produce SNG, and hydrogen. The consideration of this

program is that natural gas in the Sumatra and Kalimantan regions is declining and the area

has large coal resource potential. Through this program, low-calorie coal in Sumatra and

Kalimantan which has low economic value is planned to be converted into SNG, ammonia,

and hydrogen which have higher economic value, especially to meet gas needs in the two

regions above.

c) Coal development program to produce fuel through coal liquefaction. This program is to

optimize Indonesia's coal potential through the provision of gasoline fuel from coal.

Currently, most of Indonesia's gasoline needs are still met by imports. Bautabara

liquefaction products into gasoline can reduce dependence on imported gasoline products.

d) Coal development program through coal-biomass briquettes for coal-fired power plants

and carbonized coal briquettes for small industries/MSMEs. Minin program to support

NRE plans in the energy mix through the implementation of co-firing bio-coal briquettes.

Compared to the use of only coal, the use of bio-coal briquettes is more environmentally

friendly, because biomass can be replanted and absorb CO2 from the atmosphere. The use

of carbonized briquettes for small industries as a heat source is more efficient and CO2

emissions are lower than the use of electrical energy.

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1248 Return: Study of Management Economic And Business, Vol 2 (12), December 2023

e) Metallurgical coal development program. Indonesia has the potential not only of thermal

coal (so far for power generation), but also the potential of metlurgi coal. Metallurgical

coal has a relatively higher price than thermal coal, and is needed in the steel industry and

refining of non-ferrous metals. Indonesia's metallurgical coal potential has not been well

inventoried, most of which are still sold as thermal coal, thus potentially reducing state

revenue.

f) Coal development through upgrading (coal upgrading). Coal upgrading is one way to

increase the added value of Indonesian coal.

g) Advanced matertial and earth metal (LTJ) product development program from coal.

Advanced materials and LTJ are materials that are needed in various modern industries,

including the health industry, transportation, communications, security defense, and also

the EBT industry.

h) Coal development program for agro-industrial materials. Indonesia's low-calorie coal has

the potential for humic acid and fulvic acid which based on research daopate is used as a

fairly valuable fertilizer.

i) Utilization of coal for electricity through coal blending facility infrastructure, biomass

cofiring at PLTU, and optimization of coal utilization with IGCC. Through the coal

blending facility, low-grade coal that is not in accordance with the specifications of the

PLTU can still be used for electricity. In an effort to reduce environmental impact, efforts

need to be made to prepare IGCC technology in coal-fired power plants, so that low-

ranking coal can still be utilized and at the same time reduce carbon emissions.

j) Application of CSS/CCUS in coal development and utilization facilities. To still be able to

utilize coal, but by answering issues related to CO2 emissions, CCS-CCUS technology in

certain periods must begin to be applied to the electricity industry and downstream

industries that produce CO2 emissions.

2. Learning and Growth Perspectives

Indonesia now not only views coal as an energy source in power plants, but can also be

used to support other industrial activities. Coal can be the standard price of various types of

industries, including the advanced material industry, petrochemicals, and also the agricultural

industry. The Indonesian government carries out a downstream strategy or increase the added

value of coal (Kementerian ESDM, 2022a).

The coal downstream program in Indonesia is expected to create comparative and

competitive advantages for coal, as well as various derivative products. Coal derivative products

are expected to be economically competitive with oil and gas, so that they can be relied on for

import substitution, so as to save state foreign exchange, and increase domestic competence in

the coal sector (Kementerian ESDM, 2022a).

Coal industrialists should continue to learn and grow, at least in the form of coal

development as intended by Article 102 Law Number 3 of 2020 concerning Amendments to Law

Number 4 of 2009 concerning Mineral and Barubara Mining (Mineral and Coal Law) ( Undang-

Undang (UU) Nomor 3 Tahun 2020 Tentang Perubahan Atas Undang-Undang Nomor 4 Tahun

2009 Tentang Pertambangan Mineral Dan Batubara, 2020). The development of coal in question

includes: (a) coal upgrading, (b) coal briquetting, (c) coking, (d) coal liquefaction, (e) cool

gasification including underground coal gasification). (f) cool slurry/coal water mixture. The

utilization of coal includes building its own Steam Power Plant (PLTU) at the mouth of the mine

(Kementerian ESDM, 2022a).

That the learning and growth of coal industrialists, is also driven by legislation. In the

Mining Law, coal mining and/or utilization activities are also one of the requirements for the

granting of guarantees for the continuation of operating permits into Special Mining Business

Permits (IUPK). Then Article 39 of Law Number 11 of 2020 concerning Job Creation mandates

that business actors who increase the added value of coal can be given certain treatment to state

investment obligations in the form of royalties of 0% (Kementerian ESDM, 2022a).

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1249

Return: Study of Management Economic And Business, Vol 2 (12), December 2023

3. Social Perspective

The social perspective of the national coal industry is set out in the National Energy Policy

and the National Energy General Plan (RUEN). In order to achieve energy independence and

national energy security, there are 9 (nine) principles used to realize it. If the 9 points are taken

only related to social perspectives, then there are 4 (four) items, namely:

a. Energy availability and fulfillment of domestic energy supply needs

b. Efficient use of energy in all sectors

c. People's access to energy in a fair and equitable manner

d. Job creation

The social aspect of the coal industry can be seen from the government's policy in providing

electricity at reasonable prices to the community. This is done by reducing local electricity BPP

through efficiency in primary energy costs which are the largest component in BPP. In an effort

to realize this, the government issued several policies related to primary energy for power

generation. One of them is the Regulation of the Minister of Energy and Mineral Resources

Number 19 of 2017 concerning the Utilization of Bnatubara for Power Generation and the

Purchase of Excess Power (Kementerian ESDM, 2022a).

The regulation aims to, among others, regulate the pattern of the highest benchmark price

(HPT) in the procurement of coal-based power plants and excess power. This regulation also

keeps the local BPP Power Plant more effective and efficient, so that electricity tariffs can be

more competitive (Kementerian ESDM, 2022a).

4. Environmental Perspective

Coal is among the most polluting fuels due to its high carbon content. The social

perspective of the national coal industry is set out in the National Energy Policy and the National

Energy General Plan (RUEN). In order to achieve energy independence and national energy

security, there are 9 (nine) principles used to realize it. If the 9 points are taken only related to

social perspectives, then there are 2 (two) items, namely:

a. Optimal and sustainable management of energy resources

b. Preservation of environmental functions

As a country with considerable coal resources and reserves, Indonesia faces challenges that

are not easy. Indonesia cannot ignore the global public's attention to the negative environmental

impacts of CO2 emissions, as a result of burning coal. CO2 is the cause of climate change. On

the other hand, Indonesia has committed to participate in the Net Zero Emission agenda.

Therefore, Indonesia is developing programs related to environmentally friendly technology to

reduce CO2 emissions from clean coal power plants (Kementerian ESDM, 2022a)

From an environmental perspective, the Indonesian government is implementing energy

mix targets in Indonesia. Indonesia's energy mix includes petroleum, coal, natural gas, and

renewable energy. When compared to the 2011 marketing mix which positioned the portion of

coal to be 24% of Indonesia's total energy mix, then in 2025 there will be an increase in Indonesia's

coal consumption to 30%.

The government realizes that burning coal produces relatively large greenhouse gas (GHG)

emissions, so efforts are needed to reduce GHG emissions sourced from the coal-fired power

plant itself. That is why the government encourages the coal power plant program by using low-

carbon technology or high efficiency, low emission (HELE) technology. These technologies

include supercritical, ultra-supercritical boilers and other more efficient technologies such as

Circulating Fludized Bed (CFB). Another technology is the use of coal bed methane (CBM). The

government wants to utilize this unconventional gas and it is available in sufficient quantities at

economical prices. The government is also considering the use of Gasification Combined Cycle

(IGCC) and Carbon-Capture and Storage (CCS) to significantly reduce GHG emissions. It's just

that the implementation is waiting after the technology is commercially mature. The use of such

technologies is expected to reduce the use of coal which can also directly reduce GHG emissions

(Kementerian ESDM, 2022a).

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1250 Return: Study of Management Economic And Business, Vol 2 (12), December 2023

In 2010 the Indonesian government set a target of reducing greenhouse gas (GHG)

emissions by 26% by 2020, and up to 41% if there is international support compared to

the business as usual scenario in 2020. Post 2020, Indonesia plans to increase the target

beyond the current commitment. Referring to the latest study on GHG emission levels,

Indonesia has set an unconditional target of 29% and a conditional target of up to 41%

compared to the business as usual scenario in 2030 (Kementerian ESDM, 2022a).

Table 2 shows the energy composition in Indonesia's energy mix program in 2011

and 2025. The government expressed a desire to increase domestic consumption of coal,

so that coal supplies around 30% of the energy mix by 2025 (Kementerian ESDM,

2022b).

Table 2 Energy Mix Targets

1. Sustainable Balanced Scorecard (SBSC) Recapitulation

The description above is an elaboration of the four perspectives of the balanced scorecard

(BSC) which has been expanded with sustainability aspects by adjusting the social and

environmental dimensions so that it becomes a sustainable balanced scorecard (SBSC) framework

which is then integrated with competitutive advantage variables. Competitive advantage variables

consist of three theories, namely sources of competitive advantage derived from: (1) Resource-

Based Theory (Barney & Clark, 2007), (2) Market-led theory (Sachs & Yang, 2002), and Industrial

organization theory (Tirole, 1988).

Based on the description above regarding competitive advantage variables integrated into

the Sustainable Balanced Scorecard (SBSC) framework, the results are recapitulated in Table

4.4. This table is a modification of Table 4.1 by adding the three rightmost columns. The number

in the weight column, especially for the fourth number of the sustainable balanced scorecard

perspective, refers to Liang and Wang (2019). The variable numbers in each perspective are the

average for that perspective according to the number of variables/indicators. The actual

performance column is an assessment of the Indonesian coal industry with a range between 0-100

with a value of tens of rounds. Meanwhile, Result is a multiplication between The Weight and

Actual Performance. Furthermore, the results are summed vertically so that the value of the coal

industry performance evaluation results based on the combination of SBSC with competitiveness

is 68.92929 which is rounded to 69. Figures show that the performance of the coal industry based

on the combination of SBSC with competitiveness is categorized as "sufficient" or "medium",

which means that it has not reached the "good" category let alone "very good".

Strategy to Improve Sustainable Performance of the Coal Industry to Win Global

Competition in the DMO Context

Based on the results of the Sustainable Balanced Scorecard (SBSC) matrix combined with

competitiveness variables from the three theories, namely competitive advantage derived from:

(1) Resource-Based Theory (Barney & Clark, 2007), (2) Market-led theory (Sachs & Yang, 2002),

and Industrial organization theory (Tirole, 1988); then a SWOT matrix was created. The elements

in the following SWOT matrix are taken from the results of the description of the competitive

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1251

Return: Study of Management Economic And Business, Vol 2 (12), December 2023

advantage variables above which show strengths, weaknesses, opportunities, and threats to the

national coal industry.

SWOT matrix to be analyzed in order to produce answers to the second research question, namely

on strategies to improve the sustainable performance of the coal industry in order to achieve

superior performance so as to win global competition in the context of DMO.

The variables incorporated into the SWOT framework include four groups of variables. The four

groups of variables are (i) Variable strength (strengths) of the national coal industry. (ii) Variable

weaknesses of the national coal industry. (iii) Variable opportunities of the national coal industry,

and (iv) Variable threats of the national coal industry. The variables of strengths, weaknesses,

opportunities, and threats, come from the source of competitive advantage, competitive

advantage, and the result of competitive advantage, superior performance.

Table 3 is the variables that are assumed to be interrelated and relevant in the context of the coal

industry's national competitive policies on global competition in the context of DMO

Table 3 SWOT Table of National Coal Industry in Improving Sustainable Performance and

Competitiveness

Element of SWOT

Mag-

nitude

( M)

Import-

tant (I )

Total

Rating

( R )

Conclusion

Strengths

1. Indonesia has the largest coal reserves in Asia

Pacific

2. Indonesia the world's largest coal exporter

3. Production costs are relatively low

4. Potential human resources who can master

modern processing technology for coal

Weaknesses

1. Low to medium quality Indonesian coal

-3

2. Mastery of the latest technology is still

relatively weak

-3

3. Coal excavation techniques still leave

environmental damage

-2

-4

4. Maish coal product diversification in the early

stages

-3

Opportunities

1. Downstream coal to improve the quality /

added value of coal

2. Utilizing coal other than for energy sources

(producing methanol and DME, SNG,

hydrogen, coal liquefaction)

3. Increase the export value of non-thermal coal

(metallurgical coal)

4. The emergence of various new coal

technologies that can improve the quality of

coal products and environmentally friendly

coal.

5. Policy and joint world programs to reduce

CO2 emissions

6. Opportunities to produce environmentally

friendly coal (such as carbonized briquettes)

Threats

1. The potential reduction of coal imports by

importing countries so far

-2

-4

2. The increasingly massive renewable energy

(including electrical energy) as an energy

-2

-4

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced

Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)

1252 Return: Study of Management Economic And Business, Vol 2 (12), December 2023

substitute that can shift the role of coal

3. The issue of the negative impact of coal on the

environment (CO2).

-2

-6

4. It is increasingly difficult to obtain financing

for coal projects.

-2

Based on the results of SWOT calculations as presented in Table 4.5, it is known that there

are 7 (seven) indicators that have the highest total rating (R) value, namely number 9. The seven

indicators that will be paired are alternative strategies for the national coal industry to improve

the sustainable performance of the coal industry in order to win global competition in the context

of DMO.

(1) S-O Strategy (Strengths- Opportunities),

An S-O strategy is one that uses the power of internal effort to gain opportunities that exist outside

the business. In other words, this strategy uses internal forces (signatories to PPPs) to take

advantage of external opportunities. Alternative S-O strategies can be formulated as follows:

a. By harnessing the strength of coal reserves and the latest technology, Indonesia can export

environmentally friendly coal.

b. By utilizing the strength of coal reserves and the latest technology, Indonesia can export

coal in a differentiated manner, namely between coal for energy purposes and coal for other

industrial purposes.

c. By utilizing the strength of coal reserves and the latest technology, Indonesia can export

non-thermal coal, namely metallurgical coal

(2) W-O (Weaknesses-Opportunities) strategy,

The W-O strategy is a strategy that aims to minimize internal business weaknesses by taking

advantage of external opportunities. In other words, the goal of this strategy is to improve the

internal weaknesses of PPPs signatories by exploiting external opportunities. Alternative S-O

strategies can be formulated as follows:

"Utilizing various new technologies to optimize coal downstream so that the benefits of new

stones will be increasingly widespread in many industries"

(3) S-T Strategy (Strengths-Threats)

The S-T strategy is a strategy pursued by businesses to avoid or reduce the impact of external

threats. This strategy uses internal forces (signatories to PPPs) to avoid or mitigate the impact of

external threats. Alternative S-T strategies can be formulated as follows:

"With lower production costs and environmentally friendly coal proposals, Indonesia can

increase its bargaining position to obtain financing for coal projects"

(4) W-T strategy (weaknesses-threats)

The W-T strategy is a defensive strategy by reducing internal weaknesses and avoiding threats.

It is a strategy that is a defensive tactic directed at reducing internal weaknesses (PPPs

signatories) and avoiding external threats (David, 2013). Alternative WT strategies can be

formulated as follows:

"Indonesia produces environmentally friendly coal, so that it can overcome environmental issues"

CONCLUSION

In conclusion, the study highlights key findings related to the competitiveness of

Indonesia's national coal industry within the framework of DMO:

Export Dynamics: Indonesia, as the second-largest global coal exporter, dominates the thermal

coal market with 10 major importing countries. Factors influencing coal export values include

Indonesia's GDP, destination country populations, and exchange rates, while challenges arise

from volatile coal prices and government export restrictions; Competitive Advantages: Sources

of competitive advantage for Indonesia's coal industry include its industry dominance, low

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced 
Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)  
 
1253 
Return: Study of Management Economic And Business, Vol 2 (12), December 2023 
transportation costs, size, and strong market share; Industry Challenges: Challenges include the 
need for environmentally friendly coal technologies, volatile coal prices, and government export 
restrictions;  Sustainable  Performance  Strategy:  The  national  coal  industry's  sustainable 
performance,  assessed  through  the  Sustainable  Balanced  Scorecard  matrix,  indicates  a 
"sufficient"  level.  Strategies  to  enhance  performance  involve  leveraging  coal  reserves  and 
advanced technology, exporting environmentally friendly or differentiated coal, exploring non-
thermal  coal  options,  optimizing  downstream  processes,  and  focusing  on  environmentally 
friendly production to address environmental concerns. 
REFERENCES 
Alkanu, D. P., Negara, T. A. S., & Istislam, I. (2020). Keabsahan Hukum Kebijakan Transfer 
Kuota Domestic Market Obligation (DMO) Batu Bara. Jurnal Ilmiah Pendidikan Pancasila 
Dan  Kewarganegaraan,  5(1),  51.  https://doi.org/10.17977/um019v5i1p51-57  Google 
Scholar 
Barney, J. B., & Clark, D. N. (2007). Resource-based theory: Creating and sustaining competitive 
advantage. Oxford University Press, Inc. Google Scholar 
Baskoro, F. R., Takahashi, K., Morikawa, K., & Nagasawa, K. (2021). System dynamics approach 
in  determining  coal  utilization  scenario  in  Indonesia.  Resources  Policy,  73,  102209. 
https://doi.org/10.1016/j.resourpol.2021.102209 Google Scholar 
BPS. (2023, July 26). Ekspor Batu Bara Menurut Negara Tujuan Utama, 2012-2022. Badan Pusat 
Statistik (BPS - Statistics Indonesia). Google Scholar 
Cooper, D. R., & Schindler, P. (2014). Business research methods. Mcgraw-hill. Google Scholar 
Creswell, J. W., & Creswell, J. D. (2017). Research design: Qualitative, quantitative, and mixed 
methods approaches. Sage publications. Google Scholar 
David, F. R. (2013). Strategic Management: Concepts and Cases. Pearson Education Limited. 
Google Scholar 
Ferrel, O. C., & Hartline, M. DD. (2014). Marketing Strategy: Text and Cases (Seventh edition). 
Cengage Learning . Google Scholar 
Haryadi,  H.,  &  Suciyanti,  M.  (2018).  Analisis  perkiraan  kebutuhan  batubara  untuk  industri 
domestik tahun 2020-2035 dalam mendukung kebijakan domestic market obligation dan 
kebijakan energi Nasional. Jurnal Teknologi Mineral Dan Batubara, 14(1), 59–73. Google 
Scholar 
Indonesia  Investments  Report.  (2023).  Batubara.  Indonesia  Investments  Report. 
https://www.indonesia-investments.com/id/bisnis/komoditas/batu-bara/item236?  Google 
Scholar 
Kementerian  ESDM.  (2022a,  January  1).  Hindari  Pemadaman  10  Juta  Pelanggan  PLN, 
Pemerintah Larang Sementara Ekspor Batubara. Kementerian Energi Dan Sumber Daya 
Mineral. https://www.esdm.go.id/id/media-center/arsip-berita/hindari-pemadaman-10-juta-
pelanggan-pln-pemerintah-larang-sementara-ekspor-batubara Google Scholar 
Kementerian ESDM.  (2022b, February  26).  Harga Acuan.  Kementerian Energi Dan  Sumber 
Daya Mineral. https://www.minerba.esdm.go.id/harga_acuan Google Scholar 
Kusnandar, V. B. (2022, December 8). 10 Negara Tujuan Utama Ekspor Batu Bara Indonesia 
(Jan-Sep  2022).  Databoks.  https://databoks.katadata.co.id/datapublish/2022/12/08/ini-
negara-tujuan-ekspor-batu-bara-indonesia Google Scholar 
Liang,  Y.,  &  Wang,  H.  (2019).  Sustainable  Performance  Measurements  for  Public–Private 
Partnership  Projects:  Empirical  Evidence  from  China.  Sustainability,  11(13),  3653. 
https://doi.org/10.3390/su11133653 Google Scholar 
Miles, M. B., Huberman, A. M., & Saldana, J. (2014). Qualitative Data Analysis: A Methods 
Sourcebook (Edition 3). Sage Publications. Google Scholar 
Natalia, D., Yoesgiantoro, D., & Yusgiantoro, F. C. (2022). Analisis Kebijakan Domestic Market 
Obligation  (DMO)  Batu  Bara  Indonesia  Untuk  Ketahanan  Energi  Dan  Mendukung 
Pertahanan. Jurnal Kewarganegaraan, 6(1), 1823–1835. Google Scholar 

Designing The Coal Domestic Market Obligation Competitiveness Policy Through Sustainable Balanced 
Scorecard and Swot Analysis (Industry Level Analysis of Indonesia)  
 
1254                                         Return: Study of Management Economic And Business, Vol 2 (12), December 2023 
Undang-undang (UU) Nomor 3 Tahun 2020 tentang Perubahan atas Undang-Undang Nomor 4 
Tahun 2009 tentang Pertambangan Mineral dan Batubara, Pub. L. No. 3, Pemerintah Pusat 
Indonesia (2020). Google Scholar 
Peraturan Pemerintah (PP) Nomor 79 Tahun 2014 tentang Kebijakan Energi Nasional, Peraturan 
Pemerintah (2014). Google Scholar 
Sachs,  J.,  &  Yang,  X.  (2002).  Market  Led  Industrialization  and  Globalization.  Journal  of 
Economic Integration, 223–242. Google Scholar 
Sadya, S. (2023, February 1). Indonesia Paling Banyak Ekspor Batu Bara di Dunia pada 2022. 
DataIndonesia.Id.  https://dataindonesia.id/industri-perdagangan/detail/indonesia-paling-
banyak-batu-bara-di-dunia-pada-2022 Google Scholar 
Sekaran, U., & Bougie, R. (2016). Research Methods For Business: A Skill Building Approach: 
Vol. Seventh Edition (J. Wiley & Sons, Eds.). SPi Global. Google Scholar 
Sigalas, C. (2015). Competitive advantage: the known unknown concept. Management Decision, 
53(9), 2004–2016. https://doi.org/10.1108/MD-05-2015-0185 Google Scholar 
Tirole, J. (1988). The Theory of Industrial Organization (1st edition). MIT Press. Google Scholar 
Worldometer.  (2022).  Indonesian  Population  1950-2022.  Worldometer. 
https://www.worldometers.info/world-population/indonesia-population/ Google Scholar 
Yulia, S., & Chandriyanti, I. (2021). Analisis Daya Saing Komparatif dan Kompetitif Ekspor 
Komoditas Batu Bara Tiga Negara Berkembang (Indonesia, Afrika Selatan dan Kolombia). 
Ecoplan, 4(2), 99–110. https://doi.org/10.20527/ecoplan.v4i2.339 Google Scholar 
  
 