Minister of Finance : Pertamina Becomes a Pillar to Achieve Indonesia's Net-Zero Emissions Target

Jakarta, December 7, 2021 – Minister of Finance Sri Mulyani Indrawati believes that PT Pertamina (Persero) could be a pillar to achieve Net Zero Emissions targeted by the Indonesian government in 2060.

"As an energy company, Pertamina has a big responsibility to be a pillar of achieving net-zero emissions," she said at the 2021 Pertamina Energy Webinar in Jakarta, Tuesday (7/12/2021).

According to Sri Mulyani, the net-zero emissions target applies the principles of affordability and fairness. It means that carbon emitters have a greater responsibility than others. The energy sector has contributed to reducing carbon emissions and is second only to the forestry and other land use (FoLU) sectors.

According to the Minister of Finance, the FoLU sector must reduce emissions by 700 million tons of CO2e for IDR 90 trillion by 2060 to reach the 41% reduction target. Meanwhile, the energy sector with a contribution is targeted at reducing 450 million tons of CO2e requires funds of up to IDR 3,500 trillion. "It is very different. Energy is a costly sector. However, energy is important for the people, and it is important to reduce C02 after FoLU," said Sri Mulyani.

The Minister of Finance added that her parties would support efforts to overcome climate change, including achieving the target of net-zero emissions.

Meanwhile, the Secretary-General of the Ministry of Energy and Mineral Resources, Ego Syahrial, said that Indonesia had determined to reduce greenhouse gas emissions from the energy sector by 314 million CO2e with its efforts and 466 million tons of CO2e with international assistance. In 2020, Indonesia's total energy emissions will reach 586.8 million tons of CO2e.

"We hope that with the implementation and strategy towards net-zero emissions, we can reduce emissions from the energy sector to only 401 million tons of CO2e by 2060. Meanwhile, if we do business as usual, then energy sector emissions are estimated to reach 2,039 million tons of CO2e," he said.

According to him, Indonesia has committed to reducing emissions, emphasized by President Joko Widodo at COP 26 in Glasgow, Scotland, last November. Indonesia will contribute more quickly to achieving the target of net-zero emissions. Ego added that one of the efforts made was Solar Power Plants (PLTS) utilization, such as Small-Scale PLTS, Floating PLTS, and Large-Scale PLTS.

"On behalf of the Ministry of Energy and Mineral Resources, we appreciate Pertamina for starting the use of PLTS through the Green Energy Station program at petrol stations, installation in office buildings, and other facilities. We hope Pertamina can continue to improve its performance, innovate, and adapt to continue its active role in realizing a big agenda towards an advanced Indonesia that implements a green economy, green technology, and green products," he said.

Director of Strategy, Portfolio and Business Development (SPPU) of PT Pertamina (Persero), Iman Rachman during PEW 2021, said that as a national energy company and the largest state-owned enterprise, Pertamina is ready to play an important role in leading the energy transition and emission reduction in Indonesia. Pertamina supports the government's steps in realizing net-zero carbon emissions by 2060.

"To support Indonesia in realizing net-zero emissions, Pertamina has targeted to reduce carbon emissions to 81.4 million tons of CO2e by 2060," he said.

According to him, Pertamina has prepared an energy transition through the Company's Long Term Plan (RJPP) 2020-2024 with a target of reducing CO2 emissions by 29% by 2030. Until 2020, Pertamina has contributed to emission reductions of 27.08% from the baseline in 2010 or quite significantly compared to the national target of 26%.

"Pertamina's efforts to reduce emissions include the use of gas flares, implementation of energy efficiency, fuel gasification, and also other activities such as commercialization of CO2 venting in Pertamina's sub holdings and subsidiaries," said Iman.

According to Iman, Pertamina's goals for adopting green and sustainable energy were translated into eight pillars of the energy transformation. It includes improving Pertamina's refinery specifications to generate environmentally friendly fuels, expanding bioenergy development in biomass and bioethanol, maximizing potential, increasing installed geothermal capacity, and developing green hydrogen.

Pertamina also takes a strategic role in the production and development of the battery ecosystem in Indonesia. "We are also committed to strengthening integrated gasification, helping our customers in the transportation, household, and industrial sectors to reduce emissions. In the power generation sector, we continue to increase the use of new and renewable and low-carbon energy, which allows us to reduce our carbon footprint," he said.

Carbon capture, utilization, and storage (CCUS) to boost output in the oil and gas sectors is also a priority for the company when it comes to green energy.

Other efforts are being made to reduce emissions from operations and production. It includes initiatives to utilize gas flares and the Langit Biru program to encourage communities to use low-carbon fuels.

Iman further stated that, despite the Covid-19 pandemic and a triple shock, which included a fall in world crude oil prices, a decrease in domestic fuel demand, and a change in the dollar exchange rate, which impacted the rupiah, Pertamina was once again listed on the Fortune Global 500 list in 2021.

"With the company's revenue value of USD 41.47 billion in the 2020 financial year, Pertamina managed to occupy the 287th position in the Fortune Global 500," he said.

Pertamina will continue to strengthen its commitment to achieving the company's vision and shareholder aspirations in the context of transformation into a leading global energy company with a target market value of $100 billion by 2024. Pertamina will also continue the main agenda of the energy transition. The transformation through the restructuring of holdings and sub holdings that are already underway is a strategic step to adapt to future changes.

"Pertamina must move more agilely, quickly, and effectively to strengthen existing businesses in managing and providing energy for the benefit of the community to remote areas of the country," he said. "Pertamina must also move faster to develop broader business, particularly in the field of new and renewable energy."

Technology-based innovation will be carried out in holdings and sub holdings that have been formed to operate their business optimally. Digitalization and research and development are the keys to the success of a world-class company amid the challenges of changing the global business landscape.

"To increase shared insight regarding technology and business innovation, as well as to trigger discussions at a strategic level, we are presenting the 2021 Pertamina Energy Webinar with the theme Energizing Your Future," he concluded.**