Indonesia is setting an ambitious goal to attract $25.2 billion in private sector investment towards green hydrogen development by 2060, as announced by the Ministry of Industry. This initiative is aimed at averting an energy crisis within the industrial sector while contributing to substantial carbon dioxide reduction. The target is to cut CO2 emissions by 912 million tonnes by 2030, according to Xinhua News Agency.
Addressing Production Costs and Business Potential
Dendy Apriandi, Director of Investment Deregulation at the Ministry of Industry, acknowledged that while the production costs of green hydrogen remain high, the business potential surpasses that of conventional hydrogen. He stated, “Although production costs are still quite high, the business potential for green hydrogen is greater compared to conventional hydrogen.”
Major Investment from Pertamina
A significant player in this sector is the state-owned oil and gas company Pertamina, which has committed $11 billion to meet its green energy development goals. This investment underscores the growing confidence in green hydrogen as a sustainable energy source.
The Role of Green Hydrogen
Green hydrogen is generated through the electrolysis of water, splitting it into hydrogen and oxygen using electricity from renewable sources such as solar, wind, or hydropower. This method is recognised as the cleanest and most sustainable approach to hydrogen production.
The potential of green hydrogen lies in its ability to replace fossil fuels, particularly in heavy industry, long-haul transportation, and long-term energy storage. By reducing reliance on fossil fuels, green hydrogen can play a crucial role in decreasing carbon emissions and supporting the transition to a more sustainable energy system.