Indonesia, ranked among the top ten global CO₂ emitters in Statista's 2023 chart, is at a critical crossroads.

With a massive population of approximately 280 million and a heavy reliance on non-renewable energy sources, the nation faces several environmental challenges.

Yet, within this challenge lies a promising opportunity.

Despite the current modest share of renewable energy, Indonesia possesses a vast untapped potential, particularly in the sector of green hydrogen production.

The Surging Market Demand of Green Hydrogen

Given the projected global hydrogen market surge to USD 201 billion by 2025, Indonesia's pivot towards green hydrogen production is not unexpected.

A comprehensive analysis even indicates that Indonesia's blue and green hydrogen needs might hit 4 million tonnes annually by 2025.

Fast forward to 2030, and this figure is projected to double, even quadruple, to a staggering 17 million tonnes by 2040.

As per the IESR 2022 report, this high surge of demand is mainly spurred by Indonesia's transportation sector. Power generation, ammonia production, steel manufacturing, methanol, refineries, and the cement industry also follow not too far behind.

Thankfully, the nation has vast renewable energy resources. Indonesia's green hydrogen market has the advantage of abundant sunlight for solar-powered electrolysis and ample space for renewable energy projects.

Shedding light on the current scenario of green hydrogen in Indonesia, Subawa Putra, General Manager of PT PLN Indonesia Power (IP) Priok Power Generation Unit (PGU), revealed that hydrogen car manufacturers in the country have been eagerly waiting for the launch of hydrogen stations. 

The official launch of hydrogen stations in Indonesia is set to happen within the next one or two months (early 2024). They will first cater to the transportation needs in Senayan, Jakarta.

Indonesian Government Drive for Green Hydrogen

Presidential Regulation No. 22/2017 charts a comprehensive development roadmap of Indonesia's National Energy Plan (RUEN) until 2050.

This roadmap includes a detailed action plan for hydrogen development, covering:

1. the establishment of regulatory frameworks
2. technological and manufacturing capacity enhancement, and
3. the provision of incentives.

As the center of this ambitious plan, the Ministry of Energy and Mineral Resources (MEMR) will oversee hydrogen's integration into the energy sector.

Given Indonesia's regulation where hydrogen is classified as an industrial inorganic gas with high demand, the Ministry of Industry (MOI) will also play a pivotal role in managing its production.

The latest breakthrough in green hydrogen comes from PLN, which has successfully inaugurated Indonesia's first Green Hydrogen Plant (GHP) in the Muara Kara Steam Gas Power Plant (PLTGU) area, Jakarta.

Developed under the PLN Nusantara Power subholding, the GHP boasts a production capacity of up to 51 tons of hydrogen annually.

This achievement is made possible by employing solar PV, ensuring 100% green hydrogen production.

The process is supported by a Renewable Energy Certificate (REC), with electrolyzers' energy consumption of 2,795 megawatt hours (MWh) annually.

Looking ahead, PLN Nusantara Power is also gearing up to introduce a green hydrogen storage solution. The storage will facilitate the preservation and future use of green hydrogen, holding a promising prospect for Indonesia's effort in the green hydrogen energy sector.

Navigating Challenges on the Indonesian Hydrogen Frontier

Despite the potential, we still need to remember that there are distinctive challenges to green hydrogen investment in Indonesia.

Hydrogen Business Desk (HBD), a service unit of the German-Indonesian Chamber of Industry and Commerce (EKONID), cites high-interest rates, limited access to long-term debt financing, and inefficient policy frameworks as significant hindrances for investors looking to finance clean energy projects in Indonesia.

To traverse this terrain successfully, a blend of meticulous due diligence and strategic risk management is indispensable. Investors need to ensure they have adequate information to adeptly navigate and capitalize on the green hydrogen opportunities in Indonesia.

How Askpert.id Can Help

Askpert.id's expert network serves as a beacon for investors, providing information, insights, and expert guidance tailored to the specific challenges of green hydrogen investment in Indonesia.

Whether it's tackling the intricate regulatory landscapes or identifying a potential investment risk, we're here to assist you. Connect with our expert network now and ensure you have comprehensive insights into Indonesia's green hydrogen market.