Indonesia is taking significant steps to foster its green hydrogen industry, with the Ministry of Energy and Mineral Resources (ESDM) drafting regulations to provide incentives and tax relief for developers.
This initiative, outlined by Andrian Feby Misna, Director of Various New and Renewable Energy (EBT) at the Directorate General of New and Renewable Energy and Energy Conservation (EBTKE), is part of a broader strategy to accelerate the growth of renewable energy and reduce fossil fuel reliance.
The upcoming regulations will be incorporated into the Draft Law on New and Renewable Energy (EBET), which is currently under review. These measures include tax holidays, tax allowances, and the fundamental regulations for carbon trading. By providing these financial incentives, the government aims to make green hydrogen production more attractive and economically viable for investors.
According to ESDM data, Indonesia aims to produce 9.9 million tons of hydrogen per year by 2060. This production is intended to meet the needs of various sectors: industry (3.9 Mtpa), transportation (1.1 Mtpa), electricity (4.6 Mtpa), and household gas networks (0.28 Mtpa). Additionally, these sectors could potentially serve as export commodities, leveraging Indonesia’s strategic geographic position near countries with high demand for clean hydrogen, such as Japan, South Korea, and Singapore.
Indonesia’s abundant natural resources position it as a key player in the global hydrogen market. The country boasts the second-largest gas reserves in the Asia-Pacific region and significant CO2 storage potential for blue hydrogen production. Moreover, Indonesia’s geothermal potential ranks second globally, and its solar power capacity exceeds 200 GW, providing ample opportunities for green hydrogen production.
The geographical proximity to major hydrogen markets presents an opportunity for Indonesia to become a significant exporter of green hydrogen. This potential for international collaboration could drive higher economic growth and position Indonesia as a leader in the renewable energy sector.
