Japan and Indonesia will jointly develop decarbonization technologies, including hydrogen, ammonia, as well as carbon capture, utilization, and storage (CCUS), under a new memorandum of cooperation (MOC) between the two countries, as reported by Reuters on January 10. Indonesian Energy Minister, Arifin Tasrif, stated that the MOC will accelerate technology transfer and promote the development of CCUS technologies with natural resources in Indonesia. Japan’s Industry Minister, Hagiuda Koichi, expressed that Japan will help facilitate Indonesia’s net-zero goal under the Asia Energy Transition Initiative framework.
Indonesia is experiencing a tough green energy transition to reduce its greenhouse gas (GHG) emissions to zero by 2060. The green transition is saddled with reliance on coal, which accounts for 60% of Indonesia’s energy mix and about 5% of its GDP. Therefore, the country decides to cut carbon emissions in phases, such as applying CCUS technologies in coal-fired power generation and adding ammonia to its energy structure. In the long run, Indonesia aims for 23% renewable energy in its energy mix by 2025 and only 31% by 2050. The International Renewable Energy Agency (IRENA) suggests that Indonesia could reach its 2050 target of renewables two decades in advance by investing USD16bn on renewables every year by 2030. The move could cut net energy system costs and diminish emissions and air pollution, which would save up to USD53bn per year by 2030 in economic terms for Indonesia.