AIPF 2023: Pertamina's Two Strategies to Reduce Climate Change

Jakarta, September 6, 2023 – The Minister of State-Owned Enterprises (SOE), Erick Thohir, stated that SOEs are committed to implementing sustainable development. Erick mentioned that sustainable development not only has a positive impact on the environment but also the company's performance.

"We can see that sustainable development has become a global concern. SOEs must also play their role as a development agent in Indonesia," Erick said in Jakarta on Wednesday (6/9/2023).

Erick stated that sustainable development can also be an adaptive business strategy in response to changing times and global challenges. As a company that has successfully entered the Fortune 500, Erick believes that PT Pertamina (Persero) has many opportunities for collaboration in this regard.

"This AIPF forum is undoubtedly an opportunity for Pertamina to explore cooperation with investors and strategic partners in developing decarbonization and energy transition together," Erick said.

As a national energy company, PT Pertamina (Persero) plays a crucial role in reducing climate change. Pertamina is pursuing two main strategies: decarbonization efforts (emission reduction) in existing business operations and developing transitional energy through green businesses such as hydrogen, ammonia, and Carbon Capture, Utilization, and Storage (CCUS).

It was revealed by the Director of Finance of Indonesia, Emma Sri Martini, during a Panel Discussion on the Prospect of Green Infrastructure Investment Across Different Areas of the Indo-Pacific at the ASEAN Indo-Pacific Forum (AIPF) event at Hotel Mulia Jakarta on Wednesday (6/9).

Emma explained that Pertamina has a mandate to safeguard Indonesia's energy sovereignty. However, beyond this mandate, the company also supports the government to achieve Net Zero Emissions as part of climate change mitigation. Therefore, Pertamina is increasing its investment allocation for new renewable businesses, especially through its subholding, Pertamina New and Renewable Energy (PNRE).

"Currently, Pertamina's revenue is mainly contributed by fossil fuel businesses. However, in the future, renewable energy will increase. This is what drives us to increase investment value to strengthen these new renewable businesses," Emma stated.

Indonesia has significant potential for green energy development, including geothermal and natural gas power plants. Pertamina has a geothermal capacity of 700 Megawatts (MW) and a gas power plant capacity of 1.8 Gigawatts (GW). Pertamina is also in discussions with potential off-takers for exporting green hydrogen.

Furthermore, Pertamina is optimistic about securing green financing for these green business programs. "Through sustainable operational methodology (green operating model) and a strong ESG score, we believe that Pertamina will be an attractive investment for investors," she added.

Currently, Pertamina has an ESG score of 22.1 from the ESG Rating Agency Sustainalytics and is assessed to have a Medium level of risk. With this score, Pertamina is ranked second globally in the Integrated Oil & Gas sub-industry by Sustainalytics.

Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.**