Pertamina, PT Pupuk Indonesia, and Mitsubishi Corporation Agree to Develop Blue/Green Hydrogen and Ammonia Business

Jakarta, March 4, 2022 – PT Pertamina (Persero), PT Pupuk Indonesia (Persero), and Mitsubishi Corporation agreed to develop the Green Hydrogen and Green Ammonia Value Chain and Carbon Capture Utilization and Storage (CCUS) businesses. This agreement aligns with the government's target of reducing emissions by 29% by 2030.

This cooperation agreement was signed by Director of Strategy, Portfolio & Business Development of PT Pertamina (Persero) Iman Rachman, Director of Portfolio & Business Development of PT Pupuk Indonesia (Persero) Jamsaton Nababan, and Head of Representative of Mitsubishi Corporation for Indonesia, Takuji Konzo, in Jakarta, Wednesday, March 2, 2022.

Present at the signing of this collaboration were Deputy Minister of BUMN I, Pahala N. Mansury, Assistant Deputy for Energy, Oil and Gas Industry at the Ministry of SOE, Abdi Mustakim, and Assistant Deputy for Food and Fertilizer Industry at the Ministry of SOE, Zuryati Simbolon.

In his speech, Deputy Minister of SOEs I Pahala Nugraha Mansury said that the MoU between Pertamina, Pupuk Indonesia, and Mitsubishi is the first step for collaboration in the future. This MoU is also part of the Green Industry Cluster mission previously agreed upon and inaugurated by PT Perusahaan Listrik Negara (Persero), Pertamina, and Pupuk Indonesia.

"We are very committed to ensuring that Indonesia can reduce greenhouse gas emissions based on its National Determined Contribution (NDC) by 29% by 2030, but we cannot do it alone. We know that the key to making sure it happens is Partnership," said Pahala.

Pahala emphasized that at the G20 Presidency activities, which will take place next October, the Indonesian government and SOEs want to show the world the success of the energy transition being worked on, one of which is retiring early from coal power plants (PLTU). However, all of that can be realized with strong collaboration and synergy between the state and the private sector.

"We also want to show that energy transition can be carried out not only through early retirement of PLTU but also by reducing its utilization through cofiring activities with ammonia and biomass and using technology such as carbon capture," he continued.

Director of Strategy, Portfolio & Business Development of PT Pertamina (Persero), Iman Rachman, who was present on behalf of the President Director of Pertamina, said that with the Memorandum of Understanding signing between PT Pertamina (Persero), PT Pupuk Indonesia (Persero), and Mitsubishi Corporation, it is hoped that a form of cooperation will soon be realized, both in the short and long term and will massively support the achievement of national targets.

"The first step to realizing the development of Blue/Green Hydrogen and Blue/Green Ammonia in Indonesia will also be an important milestone to form a wider green industrial ecosystem in Indonesia," said Iman.

According to Iman, in line with the government's decarbonization program, Pertamina cooperates to develop blue/green hydrogen, blue/green ammonia, and Carbon Capture Utilization and Storage (CCUS), with the facilitation of Pupuk Indonesia's production and co-combustion of ammonia at the Coal Steam Power Plant (PLTU).

The green hydrogen produced from the NRE plant will be used to produce green ammonia. Meanwhile, blue hydrogen produced from low carbon generators with carbon emission treatment facilities will be used to produce green ammonia, which can be used for ammonia co-combustion in PLTU.

Iman added that Pertamina would support and encourage collaboration with Power SH and NRE as Pertamina's energy transition motor.  Power SH and NRE, together with partners, have identified the NRE potential of more than 10 GW, which can be used for Green Hydrogen throughout Indonesia.

Pertamina's commitment to implementing ESG aspects has boosted Pertamina's ESG rating to increase globally. Pertamina has received an ESG Risk Rating by Sustainalytics of 28.1 and is considered  at Medium risk of experiencing a material financial impact from ESG factors.

"Hopefully, the passion, hard work, and commitment that has been done will not stop here, but this achievement is the beginning of a journey to bring global change for the better," said Iman.

President Director of PT Pupuk Indonesia (Persero), Bakir Pasaman, stated that Pupuk Indonesia warmly welcomes this collaboration with Pertamina and Mitsubishi. This aligns with the government's target to increase access to green energy and achieve the Net Zero Emission target. And we in the fertilizer industry, have carried out several initiatives to support the Government's program. It includes new and renewable energy (NRE) utilization as an energy source for our factories in Pupuk Kujang and Petrokimia Gresik.

“We in the fertilizer industry are very optimistic about green hydrogen, green ammonia, and blue ammonia development. Hydrogen transport has a high level of difficulty and is very expensive. Therefore, to obtain an economical transportation cost, one alternative is to transport the hydrogen in the form of ammonia. Pupuk Indonesia is very experienced in operating ammonia plants, which becomes an advantage. We hope that Pupuk Indonesia can make a significant contribution to the development and construction of green ammonia and blue ammonia factories that will be developed in Indonesia,” said Bakir.

He added that Pupuk Indonesia is ready to support the G20 agenda for the green energy transition in the decarbonization program in Indonesia.**