State fertilizer company PT Pupuk Indonesia, ACWA Power and two subsidiaries of State electricity company PT PLN − PLN Energi Primer Indonesia and PLN Indonesia Power − on Friday, September 6, 2024 signed a Head of Key Terms (HoT) agreement for the procurement of green hydrogen in the development of green ammonia.
The signing took place at the Indonesia International Sustainability Forum (ISF) 2024 in Jakarta, as part of a shared commitment to industrial decarbonization and the green energy transition.
The collaboration on green hydrogen development between Pupuk Indonesia, PLN, and ACWA Power began last year. ACWA Power, a Saudi Arabian company, has extensive experience in developing, constructing, and operating clean power, water, and green hydrogen plants worldwide.
Through this HoT, Pupuk Indonesia and its strategic partners ensure the supply of green hydrogen to be used as raw material for green ammonia production, aligning with the government’s target to achieve net-zero emissions by 2060. With a green hydrogen production capacity of 15,000 tons per year, the Garuda H2 project is expected to become a significant milestone in creating a more environmentally friendly industrial ecosystem.
“Through this collaboration, we will build ammonia production based on renewable energy, using both renewable energy and raw materials. Typically, we use natural gas, but what we will develop with ACWA involves producing ammonia using water as the raw material,” Rahmad Pribadi, President Director of Pupuk Indonesia said in a statement on Monday, September 9, 2024.
This project will involve the construction of a green hydrogen plant by the Project Company, a joint venture formed by ACWA Power, PLN Energi Primer Indonesia, and PLN Indonesia Power, based on a Joint Development Agreement signed in December 2023. The Project Company will act as the selling entity responsible for producing and managing green hydrogen.
The green hydrogen produced will be supplied to Pupuk Indonesia and other partners through a long-term contract spanning 25 years. The green hydrogen production will utilize a water electrolysis process, powered by renewable energy, ensuring the low carbon intensity of the hydrogen.
This collaboration also aligns with the Green Economy Pioneer 10 Years Roadmap initiative of the Ministry of State-Owned Enterprises (SOEs), which encourages synergy between SOEs to lead the green energy transition in Indonesia. The green hydrogen produced from this project will be used as raw material for green ammonia production, a key component in creating more environmentally friendly fertilizers.
“Pupuk Indonesia recognizes the significant responsibility to support the achievement of net-zero carbon emissions. Therefore, we are taking strategic and tactical steps to reduce carbon emissions from our business activities,” Rahmad said.
