Australia-Indonesia Coal Treaty Could Accelerate Global Green Energy Shift
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📰 The quick summary: A proposed treaty between Australia and Indonesia to end new thermal coal mine approvals could stabilize prices, benefit existing miners, and accelerate the global green energy transition.
📈 One key stat: Australia and Indonesia together control almost 85% of seaborne thermal coal exports, giving them significant market influence to shape global coal prices and drive clean energy adoption.
💬 One key quote: “Our recent research points out that a formal treaty to phase out new thermal coal mine approvals would not only bring climate benefits, but could also benefit national budgets, state royalties and regional jobs.”
1️⃣ The big picture: Australia and Indonesia, which control about two-thirds of global seaborne thermal coal exports, have the potential to form a cartel-like organization to end new thermal coal mine approvals. This arrangement could gradually increase coal prices by restricting future supply, similar to how OPEC manages oil prices. Researchers suggest this approach would blend climate action with economic self-interest, benefiting existing mine operators while accelerating the green energy transition. If South Africa and Colombia joined the treaty alongside Australia and Indonesia, they would together control about 80% of seaborne coal exports, creating a powerful coalition to influence global energy markets.
2️⃣ Why is this good news: The proposed treaty creates a win-win scenario where climate goals align with economic self-interest. Producer states would receive increased royalties from higher coal prices, while existing mine owners and workers would benefit from price stabilization. Major coal importers like Japan and South Korea, already committed to climate action, would see stronger incentives to accelerate their renewable energy transitions. The approach offers a pragmatic path forward that avoids the economic and social disruption of forcibly shuttering existing mines, instead focusing on preventing new supply from entering the market. This coordinated international approach would provide clarity for investors and communities dependent on coal mining.
3️⃣ What’s next: Coal importing nations could reinforce this treaty by pledging to buy exclusively from member countries. Australia’s federal climate minister Chris Bowen, who supported mapping a fossil fuel phase-out at recent UN climate talks, now needs a concrete implementation plan. For the treaty to succeed, policymakers must convince existing mine operators that long-term benefits outweigh limiting expansion opportunities.
Read the full story here: The Conversation – If Australia and Indonesia agreed to end new thermal coal mines, it could drive the green transition.
