Publicly listed coal miner PT Adaro Energy Indonesia Tbk announced it would expand its coal business to carbon business through subsidiaries of PT Hutan Amanah Lestari (HAL) and PT Adaro Persada Mandiri (APM). APM would provide IDR45.5 billion loan for capital expenditure (Capex) allocation to HAL.
Established in 1982, Adaro is the second largest coal mining producer in Indonesia by its market capitalization. The company is the 1527th largest public miner in the world, according to Forbes’ Global 2000 in 2021. Apart from APM and HAL, its subsidiaries include PT Adaro Minerals Indonesia Tbk, PT Alam Tri Abadi, PT Alam Tri Bangun Indonesia and PT Sataindra Sejati.
“The [IDR45.5 billion] loan will be used by HAL for the carbon project,” Adaro management said, adding that the interest rate will be 9.3% per year.
Adaro has targeted its annual coal production of between 58 million and 60 million tons, it said in a press statement on August 1, 2022. The company recorded coal production of 28.01 million tons in the first semester of 2022, or up by 6% from 26.49 million tons in the first semester in 2021.
Meanwhile, APM has several business segments such as land management services, asset management and development, agribusiness and plantation, reclamation and rehabilitation of land and forest asset management.
Indonesia has one of the largest forests that could absorb carbon dioxide (CO2) and a projection of IDR350 trillion from carbon business, the Ministry of Environment and Forestry said as quoted by Katadata.co.id. Indonesia could also potentially be a superpower without carbon emission, said Coordinating Minister for Maritime Affairs and Investment (Menkomarves) Luhut Binsar Pandjaitan.
However, the Indonesian Forum for the Environment (Walhi) said carbon trade was a chance for the brokers’ attempt to make profit from the establishment of the new business.
“Its motive is purely business. Those who will enjoy [from carbon trade] are not the environment and those living in the nature. The one that enjoys is companies involved in carbon trade,” Walhi’s National Executive Climate Campaign Manager Yuyun Harmono said on September 18, 2020, as quoted by Katadata.co.id.
