The Indonesian government is targeting private sector investment in green hydrogen development to reach US$25.2 billion (Rp395.58 trillion) by 2060 as part of its efforts to prevent an energy crisis in the industrial sector and support carbon dioxide reduction.
This initiative is designed to mitigate the risk of an energy crisis in the industrial sector while also contributing to the country’s carbon dioxide (CO2) reduction efforts, with a target to cut CO2 emissions by 912 million tons by 2030.
Director of Investment Deregulation at the Ministry of Industry, Dendy Apriandi, said as quoted by Xinhua on Sunday, August 18, that despite the current high production costs, the business potential of green hydrogen is significantly greater than that of conventional hydrogen.
One of the state-owned enterprises leading the charge in green hydrogen investment is PT Pertamina, which has already allocated $11 billion toward its green energy development targets. Pertamina’s efforts are part of a broader strategy by the Indonesian government to encourage private investment in this emerging sector.
To further accelerate the development of green hydrogen, the government is preparing regulations related to incentives and tax breaks that are necessary for developers. These regulations are expected to include provisions for tax holidays, tax allowances, and carbon trading frameworks.
According to data from the Ministry of Energy and Mineral Resources (ESDM), Indonesia aims to produce 9.9 million tons per annum (Mtpa) of hydrogen by 2060. This production is intended to meet the needs of various sectors, including industry (3.9 Mtpa), transportation (1.1 Mtpa), electricity (4.6 Mtpa), and household gas networks (0.28 Mtpa).
Deputy Minister for Maritime and Energy Sovereignty at the Coordinating Ministry for Maritime Affairs and Investment, Jodi Mahardi, highlighted Indonesia’s strategic geographical position.
The country is close to nations with high demand for clean hydrogen, such as Japan, South Korea, and Singapore, which collectively represent a hydrogen market of around 4 million tons per year.
Indonesia also boasts the second-largest gas reserves in the Asia-Pacific region and the third-largest potential CO2 storage capacity in the area for blue hydrogen production.
For green hydrogen, Indonesia has the world’s second-largest geothermal potential and more than 200 GW of solar power capacity.
This strategic initiative underscores Indonesia’s commitment to transitioning to sustainable energy sources while positioning itself as a key player in the global green hydrogen market.
