The Indonesian Ministry of Energy and Mineral Resources (ESDM) is advancing a regulatory framework to encourage the development of green hydrogen, according to Andriah Feby Misna, ESDM’s Director of Various New and Renewable Energy. Speaking at the Indonesia International Hydrogen Summit 2024, Misna outlined the ministry’s progress in drafting regulations that will offer incentives and tax breaks to green hydrogen developers. These regulatory measures are slated to be part of the forthcoming EBET Bill, currently under evaluation.
The proposed policy is set to include a range of incentives such as tax holidays, tax allowances, and foundational carbon trading regulations. These incentives aim to alleviate the initial capital expenditure burdens on developers and stimulate a competitive market for green hydrogen in Indonesia.
In addition, the Indonesian government is working on a national hydrogen strategy to reduce the country’s reliance on fossil fuels. This strategy sets a production target of 9.9 million tons per year by 2060, with allocations spread across industrial (3.9 Mtpa), transportation (1.1 Mtpa), electricity (4.6 Mtpa), and household gas networks (0.28 Mtpa).
Industry leaders, including Pertamina Geothermal Energy (PGE) CEO Julfi Hadi and Medco Power Indonesia CEO Eka Satria, emphasized the need for comprehensive guidelines that cover hydrogen exports, production, transportation standards, and national electricity distribution schemes. They argued that clear regulations are essential for building a sustainable, low-carbon hydrogen ecosystem and attracting foreign investment.
Seno Adhi Damono from the Hydrogen Energy Center Indonesia highlighted the role of hydrogen technology in reducing dependence on fossil fuels. However, realizing this vision requires significant investment in infrastructure and technology, as well as robust support from government policies.
Leveraging its geographical proximity to major hydrogen markets like Japan, South Korea, and Singapore, which collectively represent a demand of around 4 Mtpa, Indonesia is uniquely positioned to become a key player in the hydrogen sector. The country’s ample gas reserves and CO2 storage capabilities are ideal for blue hydrogen production, while its substantial geothermal and solar resources can support the creation of green hydrogen, enhancing Indonesia’s contribution to global sustainability efforts.
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