The Indonesian Ministry of Energy and Mineral Resources (ESDM) is moving towards establishing a regulatory framework to incentivize the development of green hydrogen.
At the Indonesia International Hydrogen Summit 2024, Andriah Feby Misna, ESDM’s Director of Various New and Renewable Energy, highlighted the ministry’s efforts to draft regulations that would provide incentives and tax breaks for green hydrogen developers. These measures are expected to be included in the upcoming EBET Bill, which is still under evaluation.
The policy aims to cover a broad range of incentives including tax holidays, tax allowances, and foundational carbon trading regulations. These incentives are crucial for reducing the initial capital burden on developers and fostering a competitive green hydrogen market.
The Indonesian government is also formulating a national hydrogen strategy intended to curtail fossil fuel usage. The strategy outlines a production target of 9.9 million tons per year by 2060. This target is distributed across various sectors: industrial (3.9 Mtpa), transportation (1.1 Mtpa), electricity (4.6 Mtpa), and household gas networks (0.28 Mtpa).
Industry leaders like Pertamina Geothermal Energy (PGE) CEO Julfi Hadi emphasize the need for comprehensive guidelines covering hydrogen exports, production, transportation standards, and a national electricity distribution scheme. Medco Power Indonesia CEO Eka Satria echoed the sentiment, stressing the necessity for regulations that support a sustainable and low-carbon hydrogen ecosystem to attract foreign investments.
Investing in hydrogen development is seen as a pathway to a more environmentally sustainable future. Seno Adhi Damono from the Hydrogen Energy Center Indonesia points out that hydrogen technology development can significantly reduce fossil fuel dependency. However, achieving this vision requires substantial investment in infrastructure and technology, alongside supportive government policies.
Indonesia’s geographical proximity to major hydrogen markets like Japan, South Korea, and Singapore, which together represent a market of around 4 Mtpa, provides a strategic advantage. The country’s significant gas reserves and CO2 storage capacity position it well for blue hydrogen production. Additionally, Indonesia’s vast geothermal and solar power potential supports the development of green hydrogen.
