Philippines pursuing first coal-blending terminal

MANILA, Philippines — The Philippines is looking to establish its first coal terminal where domestic coal can be processed and blended for power generation, helping reduce its reliance on imports from Indonesia.

“Our dependence on Indonesian coal as our fuel is due to the fact that we don’t have a blending facility here in the Philippines,” Energy Secretary Sharon Garin said on the sidelines of a forum held by the European Chamber of Commerce of the Philippines.

Garin is encouraging the private sector to take the lead, noting that the government could participate as a minority shareholder to provide regulatory oversight.

“I hope that our gencos (generation companies) or even our coal miners or traders will start thinking about it, and maybe they can form an organization that could embark on that,” she said.

The Philippines has one of the most coal-dependent power grids in Southeast Asia, with coal making up around 60 percent of its energy mix.

Notably, about 95 percent of the country’s coal supply is imported, with Indonesia accounting for roughly 99 percent of those imports.

Garin said the Philippines relies heavily on Indonesian coal because its quality is compatible with the boilers and other equipment used by local coal-fired power plants.

The Semirara coal mine in Antique, which accounts for the bulk of the domestic coal production, produces low- to medium-rank sub-bituminous coal with relatively low calorific value.

Some local power plants, however, are designed to operate more efficiently with higher-calorific-value coal.

With the proposed coal terminal, Garin expects the country to maximize the use of Semirara coal.

“Even if it is considered low quality, while some (coal) is high quality, at least we can use it and find the right blend,” the energy chief said.

The Department of Energy is considering a site in Mindanao for the coal terminal, although the location remains subject to a feasibility study. The facility should be located near a port to facilitate the handling and transport of coal.

The Philippines’ push to cut its import dependence comes as Indonesia moves to centralize the export of key commodities, including coal.

Under Indonesia’s new export rules, companies will be required to report their coal export activities to a state firm. The Indonesian government’s full control over coal exports is expected to take effect by January 2027.