Indonesia Urged to Accelerate Green Hydrogen Adoption in Transport and Energy Sectors

The Indonesian government is under increasing pressure to hasten the implementation of green hydrogen technology across critical sectors, including transportation, manufacturing, petrochemicals, and energy storage. This shift is seen as essential for reducing emissions and achieving broader decarbonization goals. The Institute for Essential Services Reform (IESR) asserts that green hydrogen has the potential to bolster energy resilience by providing stable renewable energy derived from local sources like wind and solar, thus diminishing reliance on imported fossil fuels.

IESR's Chief Executive Officer, Fabby Tumiwa, notes that the global production of hydrogen has surged beyond demand over the past five years. This trend aligns with Indonesia's vision to become a leader in renewable energy by 2045, where harnessing local resources for green hydrogen production could significantly lessen the nation’s dependency on fossil fuel imports and foster energy independence.

As the hydrogen market matures, it mirrors the early stages of solar and wind energy development, marked by initial turbulence before stabilizing into a robust sector. Data from the Hydrogen Council indicates that by 2025, committed clean hydrogen capacity will exceed 6 million tons annually, while demand is projected at around 3.6 million tons. Investment commitments for hydrogen projects worldwide have surpassed $110 billion across more than 500 initiatives, ranging from final investment decisions to operational phases.

To capitalize on this momentum, Tumiwa emphasizes the importance of developing not only production capacity but also ensuring a burgeoning market demand and viable business models capable of attracting bankable financing through supportive policies and regulations. This strategic approach could provide clarity and robust support for green hydrogen projects.

Indonesia's rich endowment of renewable energy resources—including solar, wind, hydropower, and biomass—positions the country uniquely for green hydrogen production. Projections suggest that by 2060, Indonesia's hydrogen demand could reach 11.7 million tons annually, while the potential for domestic production could soar to 17.5 million tons, paving the way for the nation to become a key player in the clean hydrogen export market.

On the corporate front, PT Pertamina Persero is actively facilitating the energy transition in the transportation sector by developing sustainable aviation fuel and green hydrogen solutions. This initiative aims to reduce carbon emissions while ensuring energy security for Indonesia. Pertamina’s commitment to transitioning to clean energy is critical, especially as the transportation sector accounts for 36% of national energy consumption and approximately 73% of total fuel consumption.

Since 2003, Indonesia has been increasingly reliant on oil imports. To mitigate this dependency and lower carbon emissions, Pertamina is accelerating its efforts in energy diversification within the transport sector. The introduction of the B40 biodiesel program in 2025, supported by green refinery projects capable of producing hydrotreated vegetable oil, exemplifies this strategy.

Additionally, through Indonesia Battery Corporation (IBC), Pertamina is establishing an ecosystem for electric vehicles and battery energy storage systems, aspiring to become the largest producer in ASEAN. Plans are underway to launch two hydrogen refueling stations in Daan Mogot by 2026 and in West Java by 2028, with an initial capacity of 200-500 kg per day.

While Indonesia is blessed with abundant clean and renewable energy potential, challenges remain on the horizon. Collaboration and collective action will be vital in navigating these hurdles. As Norman Ginting, the Director of Projects and Operations at Pertamina New Renewable Energy, aptly puts it, the energy transition necessitates a concerted effort from all stakeholders involved.