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Pertamina NRE, the renewable energy subsidiary of Indonesia's state oil company, helps young farmers set up solar panels to supply electricity to their orchards. (Photo: Pertamina)
Amid the growing global demand for decarbonization, Indonesia’s state-owned oil company, Pertamina, announced on June 21 that it will invest $6.2 billion over the next five years to expand its renewable energy development. This investment aims to increase the capacity of existing solar and biogas power generation to 6 GW, and to support clean hydrogen, bioethanol, and electric vehicle batteries. Additionally, the company plans to sell 1,920 tons of carbon credits.
Pertamina is adopting a parallel energy development strategy, strengthening its current oil and gas business while simultaneously developing low-carbon energy as the foundation for future energy transitions. This includes geothermal, solar, and biogas energy. It is expected that with increased investment, combined with clean energy from natural gas, the total installed power capacity will significantly rise from 2.6 GW in the first half of 2024 to 6 GW by 2029.
In terms of hydrogen energy, Pertamina aims to boost annual production of clean hydrogen to 7,000 tons by the end of 2029. Current projects include collaborating with Tokyo Electric Power Company to develop geothermal-powered hydrogen and working with Japanese automotive giant Toyota to develop hydrogen vehicles.
To accelerate green hydrogen development, Indonesia's Ministry of Energy and Mineral Resources (ESDM) is drafting tax reduction incentives as part of the national hydrogen strategy. According to Antara News on Juue 20, Andriah Feby Misna, Director of New and Renewable Energy, stated in a public meeting that these policies will be included in the New and Renewable Energy Bill (EBET Bill), which is currently under review.
Regarding bioethanol and electric vehicle batteries, Pertamina has not provided extensive details but aims for bioethanol production to reach 840 thousand kiloliters and battery production capacity to reach 51.4 GWh. According to Nikkei Asia, Pertamina's joint venture, Indonesia Battery Corp, established in 2021, has signed cooperation agreements with China’s CATL and South Korea’s LG Energy Solution individually to develop an electric vehicle battery ecosystem.
(Photo: iStock)
Pertamina's subsidiary, Pertamina Geothermal Energy, successfully sold 80 thousand tons of carbon credits from its North Sulawesi project during the launch of the Indonesian Carbon Exchange in September 2023, making it the only local carbon credit seller. The new investment plan aims to increase carbon credit trading volume to 19.2 million tons within five years.
Pertamina highlighted that the cumulative investment of $6.2 billion is eight times its investment budget for this year. Fadjar Djoko Santoso, Vice President of Corporate Communication, stated that the increase in new and renewable energy business will not only contribute to the national energy transition and energy security but also help achieve the government's net-zero target by 2060.
Additionally, Pertamina recently launched its first green sustainability finance framework, serving as a guide for the company or its subsidiaries to issue green or transitional financing instruments to secure more funds for green or energy transition projects.
Source: Pertamina、Nikkei Asia、Antara News
