What connects Serbia with Indonesia, thousands of kilometres away?
Over the past four years, more than four million tonnes of coal have been procured from that country for the needs of the state-owned giant Elektroprivreda Srbije (EPS). The purchase of coal from Indonesian mines was, among other things, conducted through an intermediary Chinese company under the control of the government in Beijing.
Elektroprivreda Srbije paid around €460 million to the Hong Kong-registered company Shenhua (Shen Hua) International Trading for the procurement of coal from Indonesia, according to financial reports analysed by Radio Free Europe (RFE). This money was paid to the company between 2022 and 2025. However, the details of the deal remain unknown. The contracts of the Serbian state power utility are not available to the public, and neither company responded to questions regarding the specifics of the business arrangement.
Although it continues to procure coal from Indonesia, EPS told RFE that it “currently has no” active contract with Shenhua International Trading.
“EPS enjoys highly successful cooperation with companies from all parts of the world, and very good cooperation with companies from the People’s Republic of China,” they stated in their response. However, Elektroprivreda did not specify which companies it now cooperates with to bring coal from distant Indonesia to Serbia, nor why it chose a Chinese state-owned firm as one of its import partners in recent years. “Politics and energy are very tightly linked in today’s world,” Petar Đukić, a retired professor from the Belgrade Faculty of Technology and Metallurgy, told RFE.
The business dealings between Belgrade and Beijing in the energy sector are part of a broader cooperation between the two countries, which their leaders describe as an “ironclad friendship”. So far, the Serbian power utility has undertaken several investment projects with Chinese companies, most notably the construction of the new unit at the Kostolac thermal power plant in the east of the country.
Why Indonesia?
With an annual production exceeding 800 million tonnes, Indonesia is one of the world’s largest coal producers. The largest importers of Indonesian coal are Asia’s key economies: China, India, and Japan.
Starting in 2022, albeit in drastically smaller quantities compared to Asian countries, Serbia also began importing it, according to EPS financial reports available on the Business Registers Agency website.
Both EPS and the Ministry of Mining and Energy – which is responsible for overseeing the state company – emphasised in their responses to RFE that the imported coal is used to “improve the quality” of domestic coal, the quality of which has been declining year by year.
Specifically, they state that for electricity generation in thermal power plants, imported coal is “blended” with domestic coal because it has a significantly higher calorific value and contains minimal amounts of sulphur and ash, thereby causing less environmental pollution.
“The coal secured from the Indonesian market is used precisely for the aforementioned purpose,” EPS stated. EPS also assessed that “energy instability in the global market” necessitated the diversification of energy sources. Although they did not reveal who their business partners in the coal procurement deals are, they stressed that they “strictly respect” the law and that the procedures are transparent. According to their data, EPS itself produced around 95 per cent of the coal used in thermal power plants last year, while around five per cent was imported.
How much coal arrived from Indonesia?
Last year, just over one million tonnes of coal arrived at EPS from Indonesia, while around 700,000 tonnes were imported from “neighbouring countries”, as described in Elektroprivreda’s financial reports. These include Bosnia and Herzegovina, Romania, Greece, and Montenegro.
EPS did not disclose the names of the companies through which coal from the neighbourhood reached Serbia, nor are the details of these deals – from purchase to transport – outlined in the financial reports.
However, reports from 2022 to 2025 show that coal from Indonesia arrived via a Chinese partner. Shenhua International Trading, registered in Hong Kong, was tasked with the procurement. According to its website, its core business is trading coal and other energy commodities on the international market. It is part of a corporate chain controlled by the Chinese government.
Coal mine
From 2022, when procurement from Indonesia began, until 2025, the quantities of imported coal varied. The record year was 2023, when more than €170 million was paid for imported Indonesian coal.
EPS reports also describe how the price of Indonesian coal escalates during its long journey to Serbia. The initial price of the commodity, as stated in the documents, ranged between €30 and €50 per tonne. However, by the time it reaches Serbia, it jumps threefold. After loading and unloading costs, customs duties, and complicated transport, the price per tonne ranged between €100 and €150.
How long will Indonesian coal be imported?
Although coal was procured from countries in Serbia’s neighbourhood until last year, this is no longer the case. In 2026, EPS is relying solely on imports from Indonesia, according to data from the Ministry of Mining. “EPS currently has no active coal procurement contracts with regional suppliers, but only for procurement from Indonesia,” the ministry told RFE.
According to EPS business documents, it is planned that around 1.4 million tonnes will arrive from Indonesia this year. Questions regarding why coal is being imported specifically from Indonesia and whether alternatives were considered went unanswered.
“The domestic coal we extract is dirty, unsuited to our technology, scarce, and of insufficient quality,” Professor Petar Đukić explained. Furthermore, he noted that in the European Union, whose member states largely surround Serbia, it is not easy to find a partner for importing large quantities of coal, as its production in Europe is at an all-time low and declining sharply.
“EU countries have largely exhausted their high-quality coal and have to a great extent transitioned to other sources, while also minding imports and exports. The Union has set high targets for itself to be entirely based on renewable sources by 2040 and to move towards rapid decarbonisation,” he added.
Phasing out coal as an energy source is part of the European plan to reduce pollution. Serbia, as an EU candidate country, has also committed to phasing out the use of coal by 2050. However, for now, it is not abandoning coal production, nor its import. “This solution is clearly not sustainable, because sustainable energy in no way implies the further development of coal, but rather a drastic reduction in its use,” Professor Đukić pointed out.
Two-thirds of the electricity produced in Serbia still comes from thermal power plants, which feature on the map of Europe’s largest polluters. EPS stated that it is investing in the modernisation of the energy system, but that thermal power plants remain essential for ensuring the stability of electricity supply.
“Albeit with a decreasing share, alongside the construction of replacement baseload capacities, the operation of thermal power plants and the use of coal will be necessary until 2050,” they stressed to RFE.
According to data from EPS and the line ministry, 32.8 million tonnes of coal were produced in domestic open-cast mines in 2025 – two million tonnes more than the previous year. Imports, they say, are decreasing year on year; during 2025, 1.79 million tonnes of coal were imported, which is less than in 2024 and half the amount imported in 2023.
“The trend of reducing coal imports has continued into 2026, and in the first six months, 30 per cent less was imported than in the same period last year,” both EPS and the ministry noted in their response to RFE.
How does coal from Indonesia reach Serbia?
The first point on the coal’s long journey from Indonesia to Serbia is the mines, from which the commodity is transported onward to large Indonesian ports. Ocean-going vessels then begin their voyage to Europe, which can last up to 40 days.
The most common and fastest route involves travelling across the Indian Ocean and through the Suez Canal. Once the coal reaches European waters, the closest points to Serbia are ports in neighbouring maritime countries.
In order to transport the imported coal from those ports to its final destination, Elektroprivreda issued tenders for transport. Publicly available tenders on the public procurement portal, analysed by RFE, point to three routes.
Over the past four years, ships arrived at the Black Sea port of Constanța in Romania and two ports on the Adriatic Sea – Bar in Montenegro and Ploče in Croatia. Trains were responsible for transport from Bar and Ploče to the Nikola Tesla thermal power plants (TENT), the largest complex in Serbia.
Port of Bar, Montenegro
Alongside the railway route, river barges were used for transport from Constanța. The coal reached TENT via the Danube and Sava rivers.
EPS allocated more than €160 million for the transport of imported coal from neighbouring ports to Serbia. Alongside the state-owned railway companies in Serbia and Montenegro – Srbija Kargo and Montecargo – large transport companies in Croatia and Romania were also chosen as partners.
When did EPS start importing coal?
EPS reports prior to 2021 do not show any imports of coal from abroad. Domestic mines, primarily Kolubara and Kostolac, were sufficient to meet the needs of EPS’s thermal power plants. Then, in December 2021, a collapse of the power system occurred. A severe breakdown took place at the production facilities of the “Nikola Tesla” thermal power plant in Obrenovac, leaving tens of thousands of households without electricity. The cause was the poor quality of domestic coal.
As seen in the reports, EPS then launched the import of the commodity from abroad to keep the thermal power plants running. However, electricity was also imported, and Elektroprivreda fell into financial losses.
The imports were also justified by market disruptions caused by the global energy crisis, which stemmed from the COVID-19 pandemic and the Russian invasion of Ukraine. While a section of the expert public blamed the EPS management for poor administration, the company countered that the global crisis had “inevitably spilled over into Serbia” with “significant negative consequences” for its operations.
President Aleksandar Vučić also joined Serbia’s race on the global coal market at the time.
“We are continuing to buy (coal), everywhere, wherever we can, whatever we can find,” he described in August 2022. However, the details of those procurements were missing.
Previously, back in 2023, EPS refused to provide Radio Free Europe with data on coal imports—such as which companies they had signed contracts with, how much the coal cost, and who was transporting it and how. The explanation given was that the information was “confidential” and that its disclosure would “endanger the energy stability” of Serbia.
Professor Petar Đukić pointed out that as a state company, EPS is owned by the citizens and therefore “bears a special responsibility”. “Therefore, it would be entirely normal for operations to be transparent, so that we can see what is being done and what the strategic directions are,” he stressed. “A part of it may fall into the domain of business secrets, but the report on how it operates, and reviewing these parallel relationships between our energy companies, and the relationship between the state and other energy companies, ought to be available to citizens.”
Responding to allegations of non-transparent coal import deals, the Ministry of Mining stated that energy commodities are exempt from the application of the Law on Public Procurement. In other words, EPS can procure them without issuing a tender, but despite this, it respects the principles of competitiveness.
“Although it is not obliged to apply the provisions of that Law to the procurement of coal for energy production, EPS procures coal through a public call to which all interested companies can apply, and which is published openly,” the Ministry stated in its response to RFE.
(Radio Free Europe, 17.07.2026)
https://www.slobodnaevropa.org/a/srbija-eps-ugalj-kina-indonezija/33805265.html