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ASEAN Coal Trends: Challenges and Oppor tuni ties on Facing ASEAN Economi c Communi ty (AEC)

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ASEAN energy consump tion is forecasted to rise because of the
signi ficant gro wt h of economy and popul ation in the region. Coal
use continuou sly increase as a replacement for oil and natural gas.
ASEAN plays signi ficant roles in coal consump tion and produ ction in Asia
Pacific. Using the value chain approach, it is projected that coal produ cer
coun tries in ASEAN will have the chance to maximize the market through
bilateral trade or AEC framework. The AEC can foster market integration
in ASEAN, build s awareness of ASEAN coun tries to develop their
infrastructure in energy suff iciency, as well as develops clean coal
technolog y. Coal produ ction in ASEAN will still leant on Indonesia as the
main expor ter in ASEAN. Energy policy of each coun try in ASEAN has a lot
of things in common , which provides the space of building further regional
coooperation in managing energy features. The future of coal sector in
ASEAN will highl y depends on advancement of technolog y, impro vement
of governance, effeciency of transpor tation, and connectivity between
the coun tries. Strengthening cooperation and coordin ation must be a key
strategy for ASEAN coun tries to ensure readiness in facing AEC.

Keywords: Coal, ASEAN, AEC, energy, value chain, governance

Published in: Environment
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ASEAN Coal Trends: Challenges and Oppor tuni ties on Facing ASEAN Economi c Communi ty (AEC)

  1. 1. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) i ASEAN Coal Trend ChallengesandOpportunitiesonFacing ASEAN Economic Community (AEC) Asra Virgianita, Ph.D Santi Hapsari Paramitham, S.Sos Meliana Lumbantoruan, M.A
  2. 2. ii ASEAN Coal Trend : Challenges and Opportunities on Facing ASEAN EconomicCommuni ty (AEC) ISBN : 978-602-72039-2-1 Writer AsraVirgianita,Ph.D. Lecturer, Department of International Relations, Faculty of Social and Political Sciences, University of Indonesia SantiHapsariParamitham,S.Sos. Paperer, ASEAN Study Centre, Faculty of Social and Political Sciences, University of Indonesia Meliana Lumbantoruan,M.A. Research and Knowledge Manager, Publish What You Pay Indonesia Reviewer Maryati Abdullah National Coordin ator, Publish What You Pay Indonesia Jensi Sartin Program Development Manager, Publish What You Pay Indonesia AllRightReserved First Edition, 2015 This paper was published by Yayasan Transparasi Sumberdaya Ekstraktif-Publish What You Pay Indonesia, with suppor ted by Natural Resources Governance Institute and United State Agency for International Development (USAID). The contents are the responsibili ty of Publish What You Pay (PWYP) Indonesia and do not necessarily reflect the views of USAID, the United States Government, or the Natural Resource Governance Institute (NRGI). Publish What You Pay Indonesia Jl. Tebet Utara 2C No.22B, Jakarta Selatan 12810, Indonesia Telp/Fax:+62-21-8355560|E:sekretariat@pwyp-indonesia.org
  3. 3. Contents Abstract .............................................................................................................3 Introduction................................................................................................... 4 Coal Trade Pattern and Global Value Chain: An Overview .......................................6 ASEAN Economic Communi ty: The Way towards Integration .............................10 Coal Trends and the Readines of ASEAN Countries on Facing the AEC ................ 12 Coal Prospects in ASEAN Region .................................................................... 12 ASEAN Energy Policy ...................................................................................... 14 ASEAN Coun tries Strategy...........................................................................16 Clean and Eff icient Coal use in ASEAN: The Economic Benefit .......................17 Challenges and Oppor tuni ties of Coal Sector on Facing AEC................................ 19 Closing ............................................................................................................22 Bibliogr aphy ........................................................................................................ 23 ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) iii
  4. 4. iv A Abstract SEAN energy consump tion is forecasted to rise because of the signi ficant gro wt h of economy and popul ation in the region. Coal use continuously increase as a replacement for oil and natural gas. ASEAN plays signi ficant roles in coal consumption and production in Asia Pacific. Using the value chain approach, it is projected that coal produ cer coun tries in ASEAN will have the chance to maximize the market through bilateral trade or AEC framework. The AEC can foster market integration in ASEAN, build s awareness of ASEAN coun tries to develop their infrastructure in energy suff iciency, as well as develops clean coal technolog y. Coal produ ction in ASEAN will still leant on Indonesia as the main exporter in ASEAN. Energy policy of each country in ASEAN has a lot of things in common , which provides the space of building further regional coooperation in managing energy features. The future of coal sector in ASEAN will highl y depends on advancement of technolog y, impro vement of governance, effeciency of transpor tation, and connectivity between the coun tries. Strengthening cooperation and coordin ation must be a key strategy for ASEAN countries to ensure readiness in facing AEC. Keywords: Coal, ASEAN, AEC, energy, value chain, governance
  5. 5. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 1 E Introduction conomi c gro wt h and industrial activity are the two strongl y related aspects. In the era of global and regional market, countries are expected to be competitive to survive the flow of foreign commodi ties, as well as compete their domestic commodi ties into foreign market. This condi tion requires high quality of infrastructure, including the technolog y, transpor tation, electricity, and energy supplies. Adequate energy supplies ensure sustainabili ty of energy consumption for transportation, electricity, and technolog y. Use of coal is continualy rising for producing electricity. Even, coal is forcasted to replace the use of oil and natural gas due to its abundance and aff ordabili ty. With its cheaper price, coal comes out as a ―new favourable option of energy source‖ in fulfilling energy demands. This is suppor ted by volatili ty of oil price, scarcity of world’ s oil reserves which uplifts necessity to seek alternative energy resources such as coal. Data in figure one shows a general increasing number of world’ s coal consumption and production, which Asia-Pacific region contribu tes a quite signi ficant amoun t. This contribu tion shows a likelihood of growth of coal production and consumption in the regional and global level. In the trading context, Indonesia listed as the biggest coal expor t coun try in the world (around 46% of the world’ s total coal trade), while China is Figure 1. Coal Production and Consumption by Region Source: British Petroleum (BP) Statistical Review 2014 of World Energy 2014, accessed on December 21st 2014, through http://ww w.bp.com/en/glo bal/ corpo rate/about-bp/energy-econom ics/statistical-review-of-worl d-energy/ review-by-energy-type/coal/coal-consumption.html Coal production/consumption by region Million tonnes ooil equivalent Production by region Consumption by region Asia Pacific 4000 4000 Africa Middle East Europe & Eurasia S & Cent. America North America 3500 3500 3000 3000 2500 2500 2000 2000 1500 1500 1000 1000 500 500 0 0 88 93 98 03 08 13 88 93 98 03 08 13 BP Statistical Review of World Energy 2014 © BP 2014
  6. 6. 6 the country with the highest consumption of coal in the world.1 According to figure 1, coal has an abundant resource and has the security aspects in its supply. World Energy Outlook predicts that the global coal demand will gro w by 15% in 2040. The coal main producers are China, India, Indonesia, and Australia. In Asia Pacific, ASEAN plays significant roles in coal consump tion and produ ction. Nowadays,in ASEAN countries, with the implementation of AEC-which will be in place in 2015-, the economic growth will stimulates industrial activities. Then this stimulus will affects ASEAN energy consumption. Furthermore, ASEAN energy consumption is forecasted to rise continously because of the significant growth of economy and population. These trajectory will place ASEAN as a key player in global energy system for now and the future.2 Although , ASEAN has plenty of natural resources, ASEAN countries are still relying on energy impor ts. Also, each coun try individually have different pattern of energy use. This paper aims to look on challenges and oppor tunities of coal sector on facing AEC. This paper will use value chain approach, good governance, ASEAN framework and cooperation which is strengh tened through each countries member strategies. 1 BP Statictical Review of World Energy 2014, accessed on December 21st , 2014 through http://ww w.bp.com/en/ glo bal/corpo rate/about-bp/energy-econom ics/statistical- review-of- worl d-energy/review-by-energy-type/coal/ coal-consumption.html 2 Maria van der Hoeven, Southeast Asia Energy Outlook, accessed on December 20th 2014 through htt p://www . iea.org /publi cat ion s/freepubli cat ion s/publi cat ion / southeastasiaenergyoutlook_weo2013specialrepor t.pdf
  7. 7. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 3 V CoalTradePattern and Global ValueChain: An Overview alue chain explains set of activities of different production phases, including the combination of physical transformation and service inpu t from producers, the process of delivering the product to the consumers, and the waste of using.3 Value chain puts attention to the dynamics of inter- linkages between produ ction activities which takes further to the traditional modes of economi cs and social analysis. Moreover, the full value of a product is regulated in this value chain. In the case of coal, value chain can be illustrated through the set of activities of preparation, exploration, management and logistic, marketing, upgrading and investment. From this set of activities, exploration, produ ction, management (including governance) and logistic are the key elements in assuring the value of coal. Next are marketing, investment, and guarantee towards the sustainable development of coal and mining usage. This process describes that investment for the infrastructure impro vement, including rail and ports are crucial to deliver and distribu te the end-products. The simple value chain is shown at Figure 2. Thus, it is impor tant to determine pattern of current coal trade in regard to the value chain. It is found that there is no signi ficant change in the pattern of trade, both in expor ts and impor ts.The steam coal exports is more favourable, compared to cooking and ligni te. However, the countries which produce steam coal are still limi ted. Figure 2. Value Chain of Coal Source: Modified from various sources 3 Raphael Kaplinsky and Mike Morris, A Handbook for Value Chain Paper, 4. • Host Country: ASEANCoun tries Preparation: Infrastructure, Policy, technolog y Exploration and Development of Product • Direct Use • Conversion • High Quality of Coal and Mining (Upgrading) Management/ Governance andLogistic Marketing Investing • Ensuring Revenue Transparancy • Energy Security • Transportation/ delivery/distribu tion • Intra Trade ASEAN (basedon AEC) • Outside ASEAN/ Global Market • CCTs • EnergyEfficiency • Sustainable development
  8. 8. 4 Furthermore, the global steam coal trade value in 2013, was abou t 1028 Mt, which pattern of trade is led by the expor ts of coal steam product from Indonesia (432 Mt), Australia (182 Mt) and Russia (118 Mt).4 At the same time, the biggest impor ters come from China, Japan, India, South Korea, Chinese Taipei, and Germany. This proves that the coal trade center is currently heading to Asia. In 2013, China produ ced 3034 Mt of coal which assembled it to the 1st position of coal producer country, above US (756 Mt), India (486 Mt), and Indonesia (486 Mt). This condi tion puts an interesting fact that China takes both roles as the biggest coal impor ter Indonesia leads the pattern of coal trade. Indonesian coal is mostly exported to Philippin es, Myanmar, and Singapore.The detail of coal and mining trade intra ASEAN is described in the table 2 The data in the table 2, shows that coal and mining trade intra ASEAN is potential to be explored. Producer coun tries will havethe chance to maximize the intra ASEAN market through bilateral trade or AEC framework. For instance, Thailand is reported to produce approximately 1,372 Million Ton coal per year (2009). However, the produced coal is categorized as ligni te to sub bituminou s coal, as well as the biggest coal producer. which is a low quality coal.5 This situation Meanwhile, in ASEAN, Indonesia has the largest coal reserves with 22,5 billion tonnes, follo wed by Vietnam with 3.4 billion tonnes and Thailand with 1,1 billion tonnes. However, in term of coal resources, Vietnam ranks first with 203.4 billion tonnes, while Indonesia has only 92,3 billion tonnes. opens the oppor tuni ty for trading with other ASEAN countries to get the expected coal quality. In addition, coal trade becomes potentially beneficial in intra ASEAN, because they are in the same phase on enhancing their industrial capacity on facingAEC. Tabel 1 Coal Reserve and Resources by Country and Type, 2011 (billion tonnes) Hard Coal Brown Coal Total Reserves Resources Reserves Resources Reserves Resources Indonesia 13.5 73.3 9 19 22.5 92.3 Vietnam 3.1 3.5 0.2 199.9 1.4 203.4 rest of ASEAN 0.4 2.4 1.7 2.2 2.1 4 Total ASEAN 17 79.2 11 221.1 27.9 300.3 Share of the World 2.30% 0.50% 3.90% 5.30% 2.70% 1.40% Source: Table is adop ted from Maria van der Hoeven, Southeast Asia Energy Outlook, accessed on December 20, 2014 through http://ww w.iea.org/publ ications/freepubl ications/publ ication/ southeastasiaenergyoutloo k_weo2013specialreport.pdf Although, the usage in domestic level is still low due to the high dependency on gas and oil supply, in the context of trading in ASEAN, 4 World Coal Association, “Coal Fact 2014”, International Energy Agency , Coal Information 2014, BP Statistical Review of World Energy 2014. 5 Viroj Sivavong , Electricity Generating Authority Thailand, Coal Demand/Supply Outlook in Thailand, 2009, 2, accessed on November 10th 2014 through htt p:// www.kier.re.kr/upload/2009APEC-EGCFE/%28Session3- B%29Coal%20Demand-Suppl y%20Outlook %20in%20 Thailand.pdf
  9. 9. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 5 Table 2 Export-Import on Mine & Coal Intra ASEAN 2013 (in USD) Country Brunei Darussalam Cambodi a Indonesia Lao PDR Malaysia Myanmar Phillippin es Singapore Thailand Vietnam Brunei Mining 531.195.045 370.727.641 - 73.860.279 378.122.631 466.747.623 593.266.643 Coal Cambodia Mining 522.537 1.184 16 1.004 749.477 2.673.466 42.336.525 Coal 19.006.068 1.246.633.530 - 802.148.711 28.934.970 962.556.934 117.701.068 Indonesia Mining 10.946.750 22.177.064 15.434 5.279.104.587 84.376.438 1.609.142.244 6.788.530.765 2.303.483.460 368.384.679 Coal 21.511.813 1.136.928.627 1.546.249 1.007.207.109 19.608.561.066 834.864.654 130.606.674 755.000 Lao PDR Mining 3.122.743 733.697 - - 704.231.954 102.806.500 Coal - - - 497.580 16.497.799 876.926 Malaysia Mining 249.025.497 10.399.660 4.837.167.607 153.689 226.842.937 461.976.182 10.650.869.362 2.800.851.009 751.037.765 Coal 173.109 504.999 - 25.945.558 5.518.537 Myanmar Mining 15.136.482 - 733.482 727.253 117.896.275 3.765.764.484 49.120 Coal - - 799.200 Philippin es Mining 1.412.272 183.223 189.796.451 5.141 303.945.904 1.521.561 444.319.340 178.005.850 32.408.726 Coal 2.362 13.201.200 66.278.084 31.747 361.236 2.262.000 16.794.594 263.395.991 89.653.832 Singapore Mining 103.048.201 580.590.615 15.955.904.738 104.223 20.418.909.369 780.488.527 1.140.933.034 1.086.288.936 2.559.611.766 Coal 3.506 264.704 206.286 112.869 32.933 Thailand Mining 21.037.629 997.766.847 979.352.633 1.345.661.415 2.702.160.901 740.171.772 671.166.580 3.856.884.031 973.621.382 Coal 1.742 81.497 6.684 474.358 232.001 14.062 21.961 Vietnam Mining 621.687 1.363.956.350 464.294.156 244.760.576 1.231.615.244 66.125.090 239.662.441 383.614.651 460.642.517 Coal 750 4.147.504 10.963.990 23.836.954 12.326.804 835.221.845 16.160.492 Source : ASEAN Stats Database based on the ASEAN countries’ report, accessed by request to the ASEAN Stats Database Officer in 2014 Nevertheless, several ASEAN countries only place coal as minor commodi ty on their whole intra ASEAN export. Reserving the coal for their own purpose is the essential factor of their acts, because they already have high domestic energy demands for industries and electricity, such as Laos and Vietnam. That’s why then some other countries with limi ted coal resource needs to impor t from other countries, while based on its proximi ty, neighbouring impor ter from ASEAN is an attractive option. Malaysia is one sample of coal producer in ASEAN which produces coal, but still needs coal supply from impor ts. It happens since Malaysia can only produce 1 million tons per year, while its coal demand is abou t 30 million tons per year.6 Thus, Malaysia should impor ts coal from ASEAN countries, especially from Indonesia which is now recognized as reliable source of Malaysian primary energy.7 6 IEA Clean Coal Centre, http://www.iea-coal.org/documents/82373/7605/Prospects-for- coal-and-clean-coal-technologi es-in-Malaysia-%28CCC/171%29 7 Ibid.
  10. 10. 6 Table 3. ASEAN Mine and Coal Trade 2010 – 2013 (USD)8 Year 2010 2011 2012 2013 Coun try E I E I E I E I BruneiDarussalam 818.450.727 287.302.215 1.429.178.511 413.557.339 1.248.681.128 551.270.625 2.413.919.861 407.612.209 Cambodia 6.477.649 1.736.181.566 1.272.968 2.532.482.403 4.999.898 2.747.191.945 3.223.265.489 2.992.941.773 Indonesia 15.622.651.672 18.544.618.722 15.317.893.317 20.552.598.175 21.621.354.440 21.328.473.993 39.208.142.614 23.073.252.218 Lao PDR 889.808.661 863.559.029 712.239.553 1.129.360.367 620.958.285 1.445.296.146 8.282.767.199 2.752.178.450 Malaysia 12.729.699.087 22.158.194.175 14.535.309.602 28.935.047.677 17.728.160.664 31.122.993.454 20.020.465.911 31.556.817.894 Myanmar 2.963.400.096 2.008.252.380 2.945.464.591 1.001.307.797 2.268.839.598 1.358.840.844 3.901.106.297 2.921.336.316 Phillippin es 972.203.554 5.476.287.895 1.298.606.006 5.276.410.303 828.685.216 5.082.631.287 1.796.276.353 25.662.595.508 Singapore 36.900.984.567 15.162.277.865 44.605.001.469 16.814.626.185 44.769.653.129 23.887.909.044 42.626.499.706 23.535.038.241 Thailand 7.804.496.361 10.465.497.274 11.307.853.909 11.973.504.100 12.299.508.276 11.849.134.052 12.288.800.705 13.131.789.570 Vietnam 3.662.483.628 5.668.484.811 4.279.796.783 7.696.818.404 4.686.403.623 6.703.502.867 5.357.951.051 5.631.633.006 Source : ASEAN Stats Database based on the ASEAN countries’ report, accessed by request to the ASEAN Stats Database Officer in 2014 The table 3 above explains that since 2010 until 2013, during the period when 3rd APAEC Plan is implemented, the exports of coal and mining rise significantly on some ASEAN countries. It further provides the evidence that the impor t also faces some gains. This phenomena suggest that the upcoming ASEANEconomicCommunity fosters the integrated market of ASEAN, as well as building awareness of ASEAN countries to develop their infrastructure in energy sufficiency for electricity and industrial activities. The impact of ASEAN market integration opens the door for foreign companies to invest and conduct the coal and mining exploration in ASEAN countries. In 2013, the Government of Cambodia reported that the company which has licensed to do the exploration activities was 91, consisted of domestic and foreign companies.9 The companies contribu ted in exploration in Cambodi a were from Australia,China, Thailand, and Vietnam. Nevertheless, it should be noted that foreign investment is one of impor tant factors not only for the development of coal and mining industry, but also for the development of eco-friendly coal and mining industry. It corresponds with the usage of clean coal technology which also needs the investment for the technolog y installation and other related process. Thus, the international cooperation has to be realized equally in investment, technolog y, andhuman resources. 8 This data is measured on follo wing kinds of resource : Mining (iron and steel; articles of iron and steel; ores, slag, and ash; copper and articles thereof; alumunium and articles thereof; lead and articles thereof; zinc and articles thereof; tin and articles thereof) and Coal (anthracite coal not agglom erated; bituminou s coal not agglom erated; other coal not agglom erated; briqu ettes, ovoids, similar solid fuels from coal). 9 Chrea Vichett, Current Situation of Mining Industry in Cambodia,GeneralDepartment of Mineral Resourcesof Cambodi a,2013.
  11. 11. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 7 A ASEAN Economic Community: TheWaytowardsIntegration SEAN Economic Communi ty (AEC) is one of three pillars that designed to implement the establishment of ASEAN Communi ty by 2015. The idea of ASEAN Communi ty 2015 formation was made through the Summi t in Kuala Lumpur , Malaysia, in 1997 which agreed upon the ASEAN Vision 2020, aimed to create a stable and competitive region, andbalanced economic development. Nevertheless, during the Summi t in 2003, ASEAN Vision 2020 was accelerated to 2015. There are two main reasons why the establishment of ASEAN Communi ty is fast- tracked. 10 First, the increasing influence and competition of China towards the region. Second, the rise of economic integration in various regions in the world withou t ASEAN participation. AEC is expected to work in cooperation with ASEAN Socio-Cultural Communi ty and ASEAN Political Security Communi ty in succeeding the ASEAN Communi ty.11 The aims of AEC itself is to achieve higher level of economic dynamism, sustained prosperity, inclusive gro wt h, and integrated development of ASEAN by realizing the increasing interdependence amidst ASEAN countries. Three key characteristics of AEC are as follo w, (1) Single Market and Production Base; (2) Competitive Economic Region; and (3) Equitable Economic Development. These points, highligh t the implementation of agreement in which the signatories will be able to trade and invest optimally with the intra region partner. However, there are pros and cons toward the AEC. The pros often view that AEC can stimulate the intra ASEAN trade, in which provide the strengthening integrated market of ASEAN. On the other hand, like every classic cons toward market integration, the concern revolves around , the ― wide-opened door ‖ of market which may result the tigh t competition and put the domestic commodi ties into danger. Despite debates on postitive and negative view towards AEC, the supports for AEC can be indicated using the AEC Scorecard achievements. Based on AEC Scorecard data in 2011, from 277 sizes 10 Justyna Szczudlik -Tatar, ―Regionalism in East Asia: A Bumpy Road to Asia Integration,‖ Policy Paper No. 16, (2013), 3. 11 ASEAN Economic Communi ty Blueprint, (ASEAN Secretariat, 2008), 5, accessed on November 20th 2014 through http://ww w.asean.org/archive/5187-10.pdf
  12. 12. 8 of expected liberalisation, ASEAN has done 187 or abou t 67,9% of them. In 2014, that percentage gro ws to 82,1%.12 Clearly, it describes the common efforts of ASEAN countries in realizing ASEAN liberalization and integration through AEC.13 The AEC implementation not only eliminates tariffs on trade and free flow of investment, but also discusses the agremeent upon the energy and mining . Exclusively in poin t B4, the energy aspect is mentioned, as part of AEC to-do list to promo te the infastructure development, involving the completion of energy and mining cooperation.14 The energy cooperation, including the coal and mining is regulated in AEC Blueprin t Article 53-56 which explicitly put the energy security and strengthening trade and investment in energy as the common goals.15 Meanwhile, the framework of trade coal and mining trade cooperation appeares on the formation of ASEAN Forum on Coal (AFOC) in 1999 which is a transformation of Coal Sub-Sector Network, previously buil t under the ASEAN Energy Cooperation Program. It is agreed that the regional energy policy which enables the fulfillment of those goals, is required. This is to ensure implementation of the AEC goals as a single market and production base, a highly competitive economi c region, a region of equitable economi c development, and a region fully integrated into the global economy by 2015. APAEC 2010-2015 mentions that theenergy policy agenda of the AEC is targeted to acquire these follo wing ultimate objectives:16 1) to ensure a secure and reliable supplyof energy including , bio-fuel, which is crucial to suppor t and sustain economic and industrial activities; 2) to expedite the development of ASEAN Power Grid (APG) and the Trans- ASEAN Gas Pipeline (TAGP) which allow the optimization of the region’ s energy resources for greater securi ty and provide oppor tuni ties for private sector involvement in terms of investment, including financing and technolog y transfer. Integrated networks of electricity and gas pipelines offer significant benefits both in terms of security, flexibili ty, and quality of energy supply; 3) to ensure sustainable energy development, through mitigating greenhouse gas emission by means of effective policies and measures, among others; and 4) to strengthen renewable energy development, such as, bio-fuels, as well as to promo te open trade, facilitation and cooperation in the renewable energy sector and related industries as well as investment in the requisite infrastructure for renewable energy development. 12 The 12th AEC Council Meeting, August 26, 2014 accessed on December 28th , 2014, through http://ditjenkp i. kemendag.go.id/website_kpi/index.php?modu le=news_ detail& news_content_id=1501&detail=true 13 ASEAN Economi c Communi ty Scorecard: Charting Progress Toward Regional Economi c Integration Phase 1 (2008-2009) and Phase II (2010-2011) accessed on November 23rd 2014, through http://ww w10.iadb.org/ intal/intalcdi/PE/2012/10132.pdf 14 Ibid., 20 15 ASEAN Economi c Commnui ty Blueprin t, ASEAN Secretariat, 2008. Accessed on November 23rd 2014, through http://ww w.asean.org/archive/5187-10.pdf 16 ASEANPlanof Action forEnergyCooperation, 2,accessed on November 10th 2014, through http://aseanenergy. org/media/filemanager/2012/10/11/f/i/file_1.pdf
  13. 13. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 9 CoalTrendsandtheReadinesof ASEANCountriesonFacingtheAEC Coal Prospects in ASEAN Region ASEAN can be recognized as a region with adequate energy sources, especially in coal production. Geographically, ASEAN coun tries remains in the land inherited with coal and mining resources. This is proven by the latest report which shows that almost every country in ASEAN has the self-capacity to supply its energy demands, where the government of each country takes the biggest part. Like what Vietnam does by optimizing the role of Vinacom, the state-owned enterprise, to operate the coal extraction 100%.17 Vinacom also responsibles to control the coal production, with the aims to secure the coal reserve. In 2001-2005, Vietnam faced a fast growing coal production which was considerable as a threat to domestic reserve. However, this fast growth were sucessfully managed by the authori ty of the government for the domestic reservereason.18 Chart 1. Percentage of Growth Averages of Primary Energy Demand in Selected ASEAN Countries by fuel (Mtoe) 2011-2035 Source: Data are based on Maria van der Hoeven, Southeast Asia Energy Outlook, accessed on December 20th 2014 through http://ww w.iea.org/publications/ freepubl ications/publ ication/southeastasiaenergyoutloo k_weo2013specialreport.pdf 17 Global Methane Initiative accessed on December 12, 2014 through htt ps://www . globalmethane.org/documents/toolsres_coal_overview_ch37.pdf 18 Ibid. 60 50 40 30 20 10 Coal Oil Gas Hydro Bio Energy Other RE 0 Indonesia Thailand Phillipin es Malaysia -10
  14. 14. 1 0 In the case of Indonesia, the coal prospect is high and predicted to sustain until 2035.19 Indonesian coal production takes 85% of production in ASEAN which places Indonesia as the biggest coal exporter in the world. The value of Indonesian coal resource is 120,53 Billion Ton and the reserve is 31,36 Billion Ton, contribu tes only 6% of the world’ s total coal reserve.20 Indonesia is also reported as the largest energy consumer in ASEAN, follo wed by Thailand and Malaysia on the second and third place. Nonetheless, its domestic consumption is lower than Indonesian coal export. This situation leads to the dependency and the mul tiply oil impor t value of Indonesia, even the wholeASEAN. In other hand, the growt h averages of energy demand including coal of four of the larger ASEAN countries in 2011-2035 are very diversified. The gro wt h of demand for coal will occur in each coun try with percentage around 5.5% to 3.9% (Chart 1).21 In meantime, the highest gro wt h of demand for oil and gas will occur in Philipin es , while for hydro, bio-energy and other renewable energy, Malaysia will positioned as the country with the highest growth of demand for these kind of energy. Coal prospects in ASEAN seems to be quite high, as electricity in ASEAN still uses coal as the source, and electricity plays an impor tant role not only in daily uses but also in succeeding the industrial activities.It’s suppor ted by the fact that though some countries have the abundant resources of coal and mining , the quality of the commodi ties are somehow distinct from one place to another. The current condi tions above indicates two impor tant things. First, the coal production in ASEAN will still be leant on Indonesia as the main exporter in ASEAN. Second, the alternative way to use coal as the fuel of choice gives the prospect upon the coal trade value both intra ASEAN, and outside the region. 19 Maria van der Hoeven, Op.Cit. 20 BP Statistical Review of Energy 2013. 21 Maria van der Hoeven, Op.Cit.
  15. 15. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 11 T ASEAN Energy Policy Strategy Action 1. Development of Energy Eff iciency Policy and Build Capacity 1. Develop a clear policy and plan to promo te energy eff iciency. 2. Sett ing national energy eff iciency target and develop a plan to moni tor the results. 3. Strengthen human capacity and enhance infrastructure to facilitate the EE policy and plan. 2. Awareness raising and dissemination of information 1. Develop and run EE&C campaigns to raise awareness, emphasizing on global environm ental issues 2. Disseminate information using all appropri ate medias (including energy labels) to help energy consumers make a righ t decision 3. Demonstrate best energy practices and successful cases, e.g, public-private sector collaboration on EE&C 3. Promo ting good energy management practices,especially for industrial and commercial sectors 1. Develop regulation and / or provide incentives to encourage good energy management practices in facili ties 2. Build up capacity for all stakeholders to implement good energy management 4. Facilitation of Energy Efficiency Financing 1. Develop mechanism (s) to enhance financing for energy eff iciencyand conservation project implementation 2. Increase involvement of banking sector and financial institutes both domestic and international agencies in financing energy eff iciency projects he upcoming AEC cause the economic growth of ASEAN countries as the intra ASEAN trade opens the oppor tunity of all commodi ties to pass through the other countries in region with no boundaries. This economic growth is follo wed by the massive industrial activities in ASEAN countries which is undeniably increasing. In purpose to fulfil the market demand, the suff icient energy sources (such as oil, coal, and gas) are needed, so that the industrial activitiesare conducted properly. Regarding the huge energy needs, ASEAN creates the common ini tiation for energy, called ASEAN Centre for Energy (ACE) to deepen the energy cooperation among ASEAN countries. A factual plan of ACE is ASEAN Plan of Action for Energy Cooperation (APAEC). APAEC aims to achieve the energy security and the sustainable of ASEAN in health and environm ent through the further utilization of Clean Coal Technology. Not limited to that, APAEC also points to facilitate the coal trade in ASEAN within the advance regional energy security. APAEC has been done in 3 periods, which is 1999-2004, 2005- 2009, 2010-2015. The tw o latest plansare made to accomplish the ASEAN’s energy needs which is forecasted to doubl efrom 2005 to 2030 along with the implementation of AEC.22 In terms of coal, the existence of APAEC is expected to promo te coal and clean coal technology, also foster the intra-ASEAN coal trade an investment for the regional energy security. These plans are implemented through the ownership of AFOC under the ACE supervision as the secretariat, which involves the officials of Ministry of Energy from ASEAN countries. Each year, AFOC holds a meeting to receive each ASEAN country’s repor t on the mining and coal reserve and 22 Ibid.
  16. 16. 1 2 trade. This kind of meeting is advantageous to picture the challenges of mining and coal trade intra ASEAN, share about the energy needs, and suspect the potential partner for trade. On this stage, the existence of ACE acommod ate the grand framework for the ASEAN countries, related to the aspects that are impor tant to be done, such us the use of clean coal technolog y and building of coal power plant. The cooperation made under the ACE gives the guidance for each country to formul ate the national energy policy which is harmoni zed with the regional goal. The policy in regional level agreed in 2009 for example, elaborates two impor tant aspects: the pursue of reducing regional intensity of at least 8% by 2015, based on 2005 level (under Program Area No. 4 Energy Efficiency and Cooperation); and the eff ort to achievea collective target of 15% for regional renewable energy in total power installed capacity by 2015 (under Program AreaNo.6 RenewableEnergy).23 The ultimate progr ams in regional level are : buiding of an ASEAN coal image, development of ASEAN Coal Price Index, sett ing up coal laboratory and standards, promo te intra ASEAN coal trade by facili tating bilateral and mul tilateral long term coal supply agreement, formul ater an MOU similar to ASEAN Petroleum Security Agreement to enhance regional and securi ty of coal supply, and developemnt of strategy/ action towards harmoni zation of local practices to encourage coal trading and sharing of resources and facilities.24 These programs affirms the ASEAN attempt to build a commi tment in undertaking energy probl em. 23 Energy Management Policy in Indonesia and ASEAN, presentation for Workshop for ASEAN Coal Database and Information System 9-12 July 2012, accessed on December 10th 2014 through http://ww w.aseanenergy. org/media/documents/2012/08/03/f/i/file_2.pdf 24 ASEAN Plan of Action for Energy Cooperation (APAEC 2010-2015), Op.Cit.
  17. 17. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 13 A ASEAN Countries Strategy SEAN countries highligh t aseveral impor tant things related to energy, such assufficient domestic energy fulfillment, fair and stable energy pricing, the exploration of sources within the terri tory, energy eff iciency and conservation, and the environm ental impacts. In general, it canbe said that the energy policy of each coun try in ASEAN has a lot of things in common, which provides the space of building further regional coooperation in managing energy features. Specifically in coal aspects, intra trade coal has been regulated in the Programme Area No.3 through the establishment of AFOC. Along with AEC, AFOC works to create the guidelines of coal specifications, producers, and consumers in ASEAN, as well as organise a netw ork of coal laboratories in ASEANto harmonise standards of coal analysis, to enhance the intra trade coal.25 Nevertheless, with regard to different capacity of coal production, each country in ASEAN implements different kind of policy related to its domestic needs and goals. The different kind of policy is sometimes also affected by the resource reserve and resource capacity constraint. Countries with the abundant resources of coal and mining, such as Indonesia and Malaysia relatively trade their coal resource with other countries in the region more than countries which resource is less. In addition, the different energy policy is reflected on the energy trade decision. For example, the energy policy of Laos to not export its coal production and reserve all types of coal for supplying its high domestic consump tion. On the other hand, Singapore as the country with insufficient energi resources, is highly dependent to the impor t of energy. It puts Singapore in the fragile position under the dynamic of energy supplies. In purpose to face this condi tion, one of the implemented policy is by enhancing the enegy efficiency within Energy Conservation Act 2013.26 This agenda meets the energy policy in ASEAN which considers the efficient and clean energy as a crucial issue to ensure the energy reserve and sustainabili ty in ASEAN. On the other hand, similar with Singapore, Philippin es also concerns about improving the energy eff iciency consumption. Although it’s recorder as the second biggest geothermal producer in the world, Philippin es is still dependent on the impor t of energy. This makes a ground for Philippin es to focusin efficiency energy and domestic energy access assurance. The different natural resources ownership which causes to the various policies, becomes the justification to maximize the energy policy in ASEAN. This accomplishment foster the energy supply and sustainabili ty, as well the domestic energy policy of each ASEAN country. 25 ― Programme Area No.3 ‖ , accessed on December 10th 2014 through ASEAN Secretariat Website http://ww w. asean.org/news/item/prog ramme-area-no-3-coal 26 ―Singapore: Energy Eff iciency in the Industry‖, accessed on accessed on December 23rd , 2014 through http://ww w. sgc.org.sg/f ileadmi n/ahk_singapur/DEinternational/IR/ diffIR/Energy_Efficiency_in_the_Industry_June_2014.pdf
  18. 18. 1 4 T CleanandEfficientCoaluseinASEAN: The EconomicBenefit he abundant resource and competitive price of coal, put coal asthe considerable energy option. It’s forecasted that the use of coal will steadily rise and reach to 58% in 2035, in business as usual scheme. On the other hand, coal is one of the primary environm ental pollu ters. Large number of coal requires a good arrangement as the environm ental responsibili ty and the eff ort in maximizing sustainable economic benefit. ASEAN needs to create clean and efficient coal technolog y which costs much and capable human resources to operate the technolog y optimally. With regard to coal as a future energy alternative, it demands not only the ASEAN countries interests to secure the coal reserve, development, and sustainabili ty, but also the contribu tion of developed countries to assist the funding and improving ASEAN human resources which orientation is up to clean and coal technolog y development. A technolog y which is introduced to be the solu tion upon the environ tmetal effect of coal usage isClean Coal Technologies(CCTs). According to Shi and Jacobs, ―CCTs cover technologi es ranging from the perspectives of coal through combustion and the clean up of waste gases to carbon capture and storage (CCS), will reduce the pollu tion emission intensity of coal and make coal cleaner.‖ 27 27 Xunpeng Shi and Brett Jacobs, CleanCoal Technologies in Developing Countries, accessed on December 23rd 2014, through http://ww w.eastasiaforu m.org/2012/09/25/ clean-coal-technolog ies-in-developin g-countries/ Details see also, Xunpeng Shi,China’s Attempts to Minimize non- CO2 Emissions from Coal: Evidence of Declining Emission Intensity, Environment and Development Economics 16. (2011): 573-590. They also argue that the development and application of clean coal technologi es (CCTs) are believed not only as the key to reconciling the tensions between coal use andthe environment, but also the economic benefit, as they noted, ―While CCTs typically incur additional costs, they can also provide econom ic benefits in addition to environm ental ones. For example, Integrated coal Gasification Combined Cycle power plant technolog y can increase efficiencies by 20–30 per cent compared with conventional coal-fired power plants; the captured carbon dioxide from CCS power plants can be injected into oil fields to increase the oil recovery rate by 4–18 per cent; and carbon storage technologi es, such as the creation of bio- charcoal, can improve soil fertili ty, agricultural produ ctivity and water quality. CCTs can also bring new export oppor tunities for developing countries. Upgraded low-rank coal — such as brown coal in Indonesia, which has had no previous market — may develop expor t oppor tunities clean and eff icient coal technolog y. ‖28 In addition, the World Energy Report 2013 explains that energy eff iciency through the oil impor t reduction and the alternative to coal and natural gas will provide economi c gains to ASEAN. This will increase the ASEAN countries’ impor t cost savings that eventually contribu te to the rise of Regional GDP of abou t 2% (chart 2). 29 The same argumentation will also justify thenecessity of coal usage eff iciency to give the sustainable economic gains in the future. 28 Ibid. 29 Maria van der Hoeven, Op.Cit
  19. 19. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 15 Chart 2 Economic Gains on Energy Efficiency Source: Chart is adopted from Xunpeng Shi and Brett Jacobs, Clean Coal Technologies in Developing Countries, accessed on December 23rd 2014, through http://ww w. eastasiaforu m.org/2012/09/25/clean-coal-technolog ies-in-developin g-countries/ In ASEAN, the implementation of CCTs was arranged during the MinisterialStatement (JMS) at the 32nd ASEAN Energy Meeting (AMEM) on September 23rd , 2014in Vientiane, Lao People’s Democratic Republic. In the attempt of CCTs implementation, the cooperation with dialogue partners (Japan, China, and Korea) is fostered, especially in the technolog y development and funding . The implementation of APAEC shows its contribu tion to country’s awareness about the energy reserve, like what Indonesia experienced in 2010 to 2013. Indonesia gained its coal reserve from 21,13 in 2010 to 31,36 Billion Ton in 2013.30 Indonesia is also affected by the APAEC plan in realizing the clean coal technolog y as Indonesia’s coal long term strategy. 30 ― Coun try Repor ts Updates of Indonesia‖, Ministry of Energy and Mineral Resources, delivered in 12th AFOC Meeting, Thailand, 21-22 May 2014. Gains in fossil-fuel trade balances Increase in GDP 35 200 2.5% 30 160 2.0% 25 20 120 1.5% 15 80 1.0% 10 40 0.5% 5 Coal Gas Oil Addi tional Import cost expor trevenue savings 2020 Change in GDP 2025 2030 2035 Percentage changein GDP (right axis) Billiondollars(2012) Billiondollars(2012)
  20. 20. 1 6 A Challenges and Opportunities of CoalSectoronFacingAEC ccording to the value chain and overview explanation above, to arrive at the answer of prospect of coal value chain of mining and coal trade in ASEAN, the paper should be determined to several factors which affected the flow of produ ction and trade, such as the trend of trade, the technolog y,governance, transportation and connectivity, and definitely the ASEAN energy policy. These factors are examined with theconsideration of upcoming ASEAN Economic Communi ty. First, the trend of trade. Oil used to be the major resource consumed by the ASEAN countries. However, as the reserve of oil in ASEAN is being depleted, coal appears as another possible resource to explore. Based on the data of ASEAN energy outlook during the 1999 to 2007, the coal is an energy source that has the fastest growth. The high demand of coal is the result of the larger number of coal-fired power plant installation all over ASEAN countries. The consumption of coal is projected to increase approximately 7.7% per year from 2007 to 2030, due to the power plant installment and industries. The trend of coal and mining is further explained by the increasing amoun t of intra ASEAN Trade31 on coal and mining sector in 2010 that doubl ed in 2013 and reached more than 11 billion US Dollar in balance. This situation proves that theenergy consumption in ASEAN is getting higher as well as the demand of coal in the region, when the time is getting closer to the AEC implementation. It also guarantees the continuation of value chain in terms of supply 31 Both in expor t and impor t and demand, because while the coal and mining are continuou sly produ ced, the demand is coming again and again. Second, the technology, governance, transportation, and connectivity. This four aspects are interlinked to the success of production, since the value chain stresses on the flow of produ ction, which involves the easy access of modern technology and distribu tion. The modern technolog y development is needed by the coun tries to cultivate the energy produ ction. The more sophisticated the technolog y, the production will be more eff icient and resulting the high quality. However it’s built widely vary across the countries, as Myanmar and Cambodia still has limited access to modern technolog y while Singapore has reached 100 percent of access.32 This triggers some countries in ASEAN, which Government and state-owned company unable to build high-technolog y to manufacture the coal and mining materials, to open the oppor tuni ty for foreign companies to explore the mining and coal within their land under specific regulations and permission. Since coal is claimed as the preferable energy source than oil for its cheaper price and flexibili ty to be distribu ted, the probl em no longer spins around the coal as a material. The challenge occurs on how fast and how easy the coal is carried from the producer to the consumer, for example from Indonesia to Cambodi a. According to the nature of market integration, the border restraint gradually 32 Hanan Nugroho, ―ASEAN Energy Cooperation: Facts and Challenges‖, Jakarta Post May 19th 2011, accessed on December 11th 2014 through http://ww w.thejakartapost. com/news/2011/05/19/asean-energy-cooperation-facts- and-challenges.html
  21. 21. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 17 perishes as the AEC is approaching, which means the less cost for coal trade intra region. Governance is the inseparable key element of value chain. Regarding the attempt to build a global and regional value chain, domestic policy (including the added-value of coal and mining process) becomesso essential. The governance issue is also related to the revenue transportation which is collected from the coal and mining industry. Resources Governance Index (RGI) which measures the quality of governance in the oil, gas and mining sector of 58 coun tries by looking at four key areas of transparency and accountabili ty such as institutional and legal setting, reporting practices of government disclosure of information, the presence and quality of checks and oversight mechanisms that encourage integri ty and guard against conflicts of interest, the broader governance environm ent, based on more than 30 external measures of accountabili ty, government effectiveness, rule of law, corrup tion and democracy. Chart of RGI below, showing that most ASEAN countries still perforrm poorly on the index.33 Main finding of RGI repor t showing that ASEAN countries still lack laws and institutions that encourage integri ty and openness, leading to poor performance, lack effective moni toring of licensing decisions, and poor government effectiveness, control of corrup tion and the rule of law, and Cambodia, Myanmar and Vietnam publi sh very little information on resource revenues.34 From this condi tions, impor tant to push coun tries on ensuring revenue from oil, gas and mining sector used for society welfare. For the future value chain, integrated connection between each countries in ASEAN needs to be realized. The realization of integrated connection in ASEAN enhances Chart 3: East Asia and Pacific Index scores and ranking Source:Resources Governance index, 2013, Asia Pacific Index Revenue Watch Institute (Country by country repor t : http://ww w. resourcegovernance.org/rgi) 33 Resources Governance Index: A measure of transparency and accoun tabili ty in the oil, gas and mine sector, Revenue Watch Institute: 2013 34 Ibid
  22. 22. 1 8 the efficiency of distribu tion in ASEAN. Singapore, with its strategic location and modern technolog y is ideal to be placed asa hub to connect the coal and mining trade of the entire countries in region. Singapore has been well-kno wn as a key hub for oil and maritime commerce for a long time, as it covers the activities of the entirevaluechain from exploration management, refinery, and marketing and trading for energy produ cts.35 Consequently the plan will also work for the coal and mining trade. Third, ASEAN energy policy. The continuation of ASEAN Centre for Energy, especially the APAEC Plan, gives the guidance for each country in ASEAN to compose the national energy policy that meets the standard of regional purpo se, for example the power plant building , the agreement to reduce the carbon emissions, and the use of cleancoal technolog y. An agenda to foster the intra- ASEAN coal and mining trade also signs that ASEAN is moving forward to achievethe regional self-sufficiency. The reason why it is impor tant, as explained previously, because the energy self-sufficiency leads to the growth of economy and industrial activity, which is crucial in facing the ASEAN Economic Communi ty. In precise, harmoni zedpolicy will make unprobl ematic produ ction and distribu tion in the region, so that each country has the abili ty to export and impor t the commodi ty thoroughl y, which directly affects the fulfillment of national demand of energy. Closing Besides, the proli feration of modern technolog y is also necessary to cultivated for the countries with limi ted access. It helps the countries to manage and conduct the coal and mining produ ction properly and produ ce the high quality produ cts. With the abili ty to reach the demand and standard of good coal and mining those coun tries will then actively suppor t the intra ASEAN coal and mining trade. Addi tionally, to tackle the challenge of coal as energy source which contribu tes to the environm ental pollu tant, an advanced technolog y is also required. In this context, strengthening regional cooperation on both intra ASEAN and ASEAN with its dialogue partners will be an alternative to acquire a coal and mining trade which economi cally and environm entally advantageous. Moreover, the readiness of ASEAN coun tries in the face of the AEC , especially in coal and mining trade, not only rely on domestic strategy of each country , but cooperation and coordination on energy issues Including coal and mining sectors in ASEAN level should be maximized. Potential cooperation for development and trade of mining and coal must also be a key strategy of ASEAN coun tries. The good common framework in the management, development, and trade should be buil t, as withou t it, the AEC will become merely an ASEAN’s rhetoric. 35 Mark Hong, ―Overview of Singapore’s Energy Situation ‖, Energy Perspectives on Singapore and the Region, (Singapore: ISEAS, 2007), 2-3.
  23. 23. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 19 Bibliography ―Country Reports Updates of Indonesia‖ . Ministry of Energy and Mineral Resources. delivered in 12th AFOC Meeting, Thailand, 21-22 May 2014. ― Energy Management Policy in Indonesia and ASEAN‖. Presentation for Workshop for ASEAN Coal Database and Information System. 9-12 July 2012. ht tp://ww w.aseanenergy.org/media/ documents/2012/08/03/f/i/file_2.pdf ―Programme Area No.3‖. ASEAN Secretariat Website. http://ww w.asean.org/news/item/prog ramme- area-no-3-coal ―Singapore Energy Efficiency in the Industry‖ 2014. http://ww w.sgc.org.sg/fileadmi n/ahk_singapur/ DEinternational/IR/diffIR/Energy_Ef ficiency_in_the_Industry_June_2014.pdf ASEAN Economic Communi ty Blueprin t. ASEAN Secretariat Website. 2008. http://ww w.asean.org/ archive/5187-10.pdf ASEAN Economic Communi ty Scorecard: Charting Progress Toward Regional Economic Integration Phase 1 (2008-2009) and Phase II (2010-2011). 2012. http://ww w10.iadb.org/intal/intalcdi/ PE/2012/10132.pdf ASEAN Plan of Action for Energy Cooperation. 2012. http://aseanenergy.org/media/ filemanager/2012/10/11/f/i/file_1.pdf BP Statictical Review of World Energy 2014, accessed on December 21st 2014, through http://ww w. bp.com/en/glo bal/corpo rate/about-bp/energy-econom ics/statistical-review-of-worl d-energy/ review-by-energy-type/coal/coal-consum ption.html Global Methane Initiative, https://ww w.globalmethane.org/documents/toolsres_coal_overview_ ch37.pdf Hoeven, Maria van der. Southeast Asia Energy Outlook. 2013. ht tp://ww w.iea.or g/publ ications/ freepubl ications/publ ication/southeastasiaenergyoutloo k_weo2013specialrepo rt.pdf Hong, Mark. ― Overview of Singapore’s Energy Situation ‖ in Energy Perspectives on Singapore and the Region. (Singapore: ISEAS, 2007): 2-3. IEA Clean Coal Centre, http://ww w.iea-coal.org/documents/82373/7605/Prospects-for-coal-and- clean-coal-technolog ies-in-Malaysia-%28CCC/171%29 Kaplinsky, Raphael and Mike Morris. A Handbook for Value Chain Paper. Nugroho , Hanan. ―ASEAN Energy Cooperation: Facts and Challenges‖. Jakarta Post May 19th 2011. ht tp://ww w.thejakartapost.com/news/2011/05/19/asean-energy-cooperation-facts-and- challenges.html Resources Governance Index: A measure of transparency and accountabili ty in the oil, gas and mine sector, Revenue Watch Institute: 2013 Szczudlik-Tatar, Justyna. ―Regionalism in East Asia: A Bumpy Road to Asia Integration,‖ Policy Paper No. 16, (2013): 3.
  24. 24. 2 0 Shi, Xunpeng and Brett Jacobs. ―Clean Coal Technologi es in Developing Countries‖ East Asia Forum. 2012. http://ww w.eastasiaforu m.org/2012/09/25/clean-coal-technolog ies-in-developin g- cou ntries/ Shi, Xunpeng. China’s Attempts to Minimize non-CO2 Emissions from Coal: Evidence of Declining Emission Intensity, Environment and Development Economics 16. (2011): 573-590. Sivavong, Viroj. Electricity Generating Authority Thailand, Coal Demand/Supply Outlook in Thailand. 2009. ht tp://ww w.kier.re.kr/upl oad/2009APEC-EGCFE/%28Session3-B%29Coal%20 Demand-Supply%20Outlook%20in%20Thailand.pdf World Coal Association. “Coal Fact 2014”. International Energy Agency. Coal Information 2014. BP Statistical Review of World Energy 2014. Vichett, Chrea. Current Situation of Mining Industry in Cambodia. (Cambodia: General Department of Mineral Resourcesof Cambodia, 2013).
  25. 25. ASEAN Coal Trend Challenges and Opportunities on Facing ASEAN Economic Community (AEC) 21 Short Biography of Authors Asra Virginianita, lecturer at Depertment of International Relations at Faculty of Social and Political Sciences, University Indonesia. Got her Ph.d. from Meiji gakuin University, Japan in 2014. She is research manager at Japan study centre University of Indonesia, lead researcher in DIKTI on ―Perception and Local Government Policy on facing ASEAN Economic Communi ty (AEC)‖. She ever become speaker in some seminars about AEC in Makasar, Jambi, International Seminar that held by Centre for International Relations Studies (CIRes)- FISIP UI. She also active writing opinion in Media and journal such as Jakarta Post, Global and Strategies Journal Airlangga University. Santi H Paramitha was born on March, 11st , 1992 in Surabaya, East Java. She graduated from Department of International Relations - University of Indonesia in 2014. She actively engage as contribu tor and research assistant in ASEAN Study Centre, Faculty of Social and Political Sciences, University of Indonesia. She concern in ASEAN China free trade agreement and Asean Economic Communi ty(AEC) issues. Meliana Lumbantoruan was born on July, 5th, 1987 in Indrapura-North Sumatera. She got her Master degree from Department of International Relations - Gadjah Mada University in 2013. She manage research and knowledge management division and also manage progr amme of Southeast Partnership for Extractive Reform in Publish What You Pay. Sheinterested on Value chain, Asean Economic Communi ty, extractive industry governance, communi ty advocacy and sustainable development issues.
  26. 26. ASEAN energy consumption is forecasted to rise because of the significant growt h of economy and population in the region. Coal use continuou sly increase as a replacement for oil and natural gas. ASEAN plays signi ficant roles in coal consump tion and produ ction in Asia Pacific. Using the value chain approach,it is projected that coal producer countries in ASEAN will have the chance to maximize the market through bilateral trade or AEC framework. The AEC can foster market integration in ASEAN, builds awareness of ASEAN countries to develop their infrastructure in energy suff iciency, as well as develops clean coal technolog y. Coal produ ction in ASEAN will still leant on Indonesia as themain exporter in ASEAN. Energy policy of each country in ASEAN has a lot of things in common , which provides the space of building further regional coooperation in managing energy features. The future of coal sector in ASEAN will highly depends on advancement of technolog y, improvement of governance, effeciency of transportation, and connectivity between the countries. Strengthening cooperation and coordin ation must be a key strategy for ASEAN countries to ensure readiness in facing AEC. PWYP Indonesia is a coalition of civil societies for transparency and accountability of extractive resources governance in Indonesia. PWYP Indonesia was establishedin 2007, legalised under Indonesia’s law in 2012 as Yayasan TransparansiSumberdaya Ekstraktif , and affiliates to the network of PWYP global campaign. PWYPIndonesia works in transparency and accountability along the chain of extractive resource, from development phase of contract and mining operation (publish why you pay and how you extract), production phase and revenue from industries (publish what you pay), to the spending phase of revenue for sustainable development and social welfare (publish what you earn and how you spent). Website: www.pwyp-indonesia.org Email: sekretariat@pwyp-indonesia.org Facebook Fanpage: Publish What You Pay Indonesia Twitter:@PWYP_Indonesia

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