Indonesia Sets Sights on Big Hydrogen Investments
The Indonesian Government has unveiled $25.2 billion in the green hydrogen sector by 2060 as part of its long-term strategy to reduce carbon emissions and transition.
This significant investment aligns with Indonesia’s goal of cutting CO2 emissions by 912 million tonnes by 2030, marking a climacteric step in the country’s climate action agenda.
The Ministry of Energy and Mineral Resources (ESDM) has outlined a vision for Indonesia to produce 9.9 million tonnes of hydrogen by 2060. This hydrogen will be distributed across key sectors, including transportation, industry, electricity, and household gas networks. The move is part of Indonesia’s commitment to achieving Net Zero emissions by 2060.
State-owned energy company PT Pertamina is set to lead the nation’s green hydrogen initiatives, having already earmarked $11 billion towards its green energy targets. This investment underscores Pertamina’s role in driving Indonesia’s energy transition, with green hydrogen at the forefront of its strategy.
PT Pupuk Indonesia (Persero) announced its plans to establish Indonesia as a global hub for ammonia, complementing the country’s energy transition programme. In partnership with Perusahaan Listrik Negara (PLN) and ACWA Power, PT Pupuk Indonesia will build an integrated green hydrogen and ammonia project. The parties signed a Joint Development Study Agreement (JDSA) to produce more than 30,000 tonnes of hydrogen, with a financial commitment of up to $1.35 billion. The project is expected to commence development between 2025 and 2026, with full operations slated for 2027.
Further bolstering Indonesia’s green hydrogen ambitions, a study conducted by Black & Veatch concluded that a $500 million, 300MW green hydrogen production project in the Arun Lhokseumawe Special Economic Zone (SEZ) is both technically and economically feasible.
The proposed plant is projected to produce 98.5 tonnes of hydrogen per day from 300MW of electrolysers. In November 2023, Black & Veatch affirmed the project’s feasibility and its potential to significantly contribute to Indonesia’s energy transition.
The government’s substantial investment in green hydrogen is a clear indication of Indonesia’s commitment to a sustainable future. By embracing green hydrogen as a cornerstone of its energy strategy, Indonesia is positioning itself as a leader in the global energy transition while working towards its Net Zero ambitions.
Additionally, this investment will bring benefits such as:
- Decarbonising Transportation: The significant reduction in carbon emissions across Indonesia’s transportation sector is a major contributor to the country’s greenhouse gas emissions helping in achieving the country’s Net Zero targets.
- Enhanced Energy Security: By supplying green hydrogen domestically, Indonesia will reduce its reliance on imported fossil fuels, leading to greater energy independence and security.
- Economic Growth and Job Creation: The infrastructure and production facilities will create new jobs and stimulate economic growth, particularly in regions like the Arun Lhokseumawe Special Economic Zone (SEZ).
- Support for Sustainable Public Transport: Powering public transport, including buses and trains, leads to cleaner, quieter, and more efficient urban mobility solutions.
- Advancement in Global Leadership: Indonesia will be one of the global leaders in the energy transition, attracting international investments and partnerships.
