Indonesia’s Pertamina sets out net zero scenarios

Indonesia's state-owned refiner Pertamina has carried out a study showcasing three possible scenarios for energy transition in Indonesia, preparing for the country's net zero emissions ambitions and to predict long-term needs.

The Pertamina Energy Outlook has been carried out by the Pertamina Energy Institute to address the steps necessary to reach these targets. A comprehensive plan is required to keep climate change to a minimum, with current steps taken by many countries not enough to fulfil emissions reduction targets, said the vice-president of the Pertamina Energy Institute Hery Haerudin during the Pertamina Energy Webinar 2021.

The study sees emissions reaching a peak in 2060 and oil demand peaking in 2047 in the "low transition" scenario. The "market driven" scenario entails emissions peaking in 2045 and oil demand peaking in 2043. The "green transition" scenario sees emissions reaching a peak in 2030 and oil demand peaking in 2028.

Indonesia aims to reduce greenhouse gas emissions by 29pc by 2030 from 2010 levels and achieve net zero emissions by 2060 or sooner. It is the green transition scenario that needs to be implemented based on this target, said Hery.

Emissions under the green transition scenario will peak in 2030 at 670mn t of carbon dioxide equivalent (CO2e) and will continue to fall to 270mn t in 2060.

Carbon emissions in Indonesia are largely produced by the transportation and power plant sectors, said Hery, adding that "the penetration of electric vehicles (EVs) is very important as a major factor in reducing emissions in the transportation sector. Likewise, new and renewable energy power plants will encourage neutrality in that sector."

The sharp rise in global EV demand has led to a rise in demand for raw materials such as lithium and nickel for battery production. Indonesia is the world's largest producer of nickel , but most of it is sent to China for processing. But this looks set to change, as Indonesia may become the world's largest nickel processing market by 2025 , which would support the expansion of the EV sector in the country.

Fossil fuels on the wane The green transition scenario also sees the primary energy sources of oil and coal being the most affected because of an increase in electrification. Gas will be utilised more as a feedstock in the industrial sector in 2060 and fossil fuel will only make up 18pc of the energy mix, while renewable energy will make up 82pc, according to the study.

Indonesia currently aims for more than half of its planned 40.6W generation capacity to 2030 to be from renewables , according to the energy ministry. The country has banned new coal-fired power projects from 2023 and plans to retire ageing coal-fired plants.

For energy transition to be successful in the country, possible solutions suggested in the study are a carbon sink for the absorption of carbon from the agriculture, forestry and land use sectors, the use of low-carbon hydrogen and the development of carbon capture and storage (CCS) or carbon capture, utilisation and storage (CCUS). But the costs of CCS/CCUS are relatively high, with the exact calculation of the amount of carbon that can be absorbed poses a challenge to the implementation of this technology on a massive scale, according to the firm.

A national level institution is also necessary to co-ordinate between all the stakeholders, recommends the study. What is certain is that energy transition will require huge funding, which cannot be obtained only from domestic sources of funds but also requires foreign assistance through existing and agreed programmes, added Hery.

By Prethika Nair

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