Implementing the ESG Framework, Pertamina is the Pioneer of Indonesia's Energy Transition

JAKARTA, Indonesia, Dec. 9, 2020 /PRNewswire/ -- PT Pertamina (Persero) is gradually making an energy transition. Energy transition, commonly known as decarbonization, has become the agenda and target of companies globally, including oil and gas companies.

"De-carbonization is in line with what investors want to invest in companies that implement ESG (Environmental, Social & Governance), both as shareholders and as creditors," said Iman Rachman, Director of Portfolio Strategy and New Ventures of Pertamina during the opening Pertamina Energy Webinar 2020 - Energizing The Energy Transition virtually, Tuesday (8/12). This webinar is one of the activities carried out by Pertamina for its 63rd Anniversary.

Iman said that in the transition process, Pertamina prepared an ESG framework so that Pertamina could be more agile, adaptive, and sustainable in facing the challenges of the energy transition era in line with Pertamina's vision of becoming a USD 100 billion company by 2024. The implementation of the ESG framework is alternative funding for Pertamina.

"Pertamina's energy transition is to achieve the target of contributing revenues from the new and renewable energy sector of 5.7 percent of the company's total consolidated revenue in 2030," he said.

Iman hopes that Pertamina Energy Webinar-2020 can provide an overview of future energy conditions so that Pertamina and oil and gas businesses can see opportunities for funding challenges in the energy transition era. "This is also to support the creation of clean energy for Indonesia," he said.

On the same occasion, Deputy for Maritime Affairs and Natural Resources of the Ministry of National Development Planning / Bappenas, Arifin Rudiyanto, as an integrated energy SOE sector, Pertamina has been the pioneer of Indonesia's energy transition from being currently fossil-based to renewable energy (EBT) until 2050.

"Pertamina will be the pioneer in developing renewable energy in the future. Pertamina has entered geothermal power plants and started to enter biofuels," said Arifin.

The implementation of NRE and energy efficiency policies, according to Arifin, is not only able to reduce the proportion of fossil energy use such as coal but also to increase the balance of NRE by 16.8% (2024) and around 20% (2050).

Without additional fossil energy reserves, the share of domestic energy imports will reach 41% (2030) and 52% (2050). This figure has decreased significantly compared to the business-as-usual (BAU) condition of 90% (2050).

Arifin underlined the importance of a political will and policy support from the government to support the development of NRE in Indonesia. "Fiscal policies such as tax allowances and exemption from import duties for NRE can help renewable energy investors," he said.

Ruandha Agung Sugardiman, Director General of Climate Change at the Ministry of Environment and Forestry, said that Indonesia is fully committed to global decarbonization initiatives and reducing greenhouse gas emissions.

Several elements of the long term 2050 strategy towards decarbonization that the government has launched, including the energy efficiency measure, decarbonization of electricity, and electrification of end-uses that will reduce emissions.

"Pertamina has carried out decarbonization initiatives through energy efficiency, use of gas flaring, fuel conversion, modification of low emission equipment," he said.

Ruandha added that Pertamina is conducting studies for research on the development of the Green Refinery, electric vehicle batteries, and the conversion at the Plaju Refinery into a factory for processing CPO derivative products into biofuel.

"This means that Pertamina has initiated activities. We are sure that we can carry out decarbonization following the long-term 2050 plan," said Ruandha.