Ministry of SOEs Encourages Pupuk Indonesia to Develop Clean Ammonia

JAKARTA,Indonesia,March 31,2023 -- The Ministry of State Owned Enterprises (SOEs)of Indonesia has asked PT Pupuk Indonesia (Persero) to play a role in the use of clean energy,one of which is through the use of ammonia. Deputy Minister I of SOEs Pahala Mansury said that the use of blue and green ammonia in the world will continue to increase in the future.

Jakarta (30/03) President Director of Pupuk Indonesia Holding Company Bakir Pasaman (right) reaffirms his dedication in supporting the clean energy ecosystem by building stronger collaborations to reach Net Zero Emission goal in 2060. This commitment also aims to shape the company as a leading player in clean ammonia globally.

"Some predictions made by think tanks say 12 percent of the world's energy ahead of 2050 will use hydrogen as an energy source and I think this could be the key to Indonesia's economic recovery. PT Pupuk Indonesia can develop blue and green ammonia by working with a number of domestic parties such as Pertamina and also with external parties," said Pahala as a keynote speaker at the Pupuk Indonesia Clean Ammonia Forum (PICAF) 2023 in Jakarta,Thursday (30/2/2023).

Pahala added that the use of ammonia can help the government's target of achieving net zero emissions by 2030. Therefore,in accordance with the recently issued Circular of the Minister of SOEs related to decarbonization,Pahala asked PT Pupuk Indonesia and other SOEs that have a major contribution in reducing national emissions to make a road map for the use of clean energy.

In order to create an ammonia ecosystem,PT Pupuk Indonesia held the Pupuk Indonesia Clean Ammonia Forum (PICAF) 2023. President Director of PT Pupuk Indonesia Bakir Pasaman said the forum was launched as a form of support to promote a clean (low-carbon) ammonia ecosystem.

According to Bakir,Pupuk Indonesia hopes that PICAF 2023 can accelerate the implementation of technological innovation and policy development to strengthen the clean ammonia value chain. This is an extension of Pupuk Indonesia's commitment to support Indonesia's Sustainable Development Goals.

"Pupuk Indonesia,today,has more than 50 years of experience in the ammonia industry. Therefore,the expertise allows us to see the potential of clean ammonia to support the low-carbon energy transition. With the development of clean ammonia,Pupuk Indonesia is committed to playing an active role in supporting the achievement of net zero emissions,which targets to reduce carbon emissions equivalent to five million tons of CO2 by 2050," Bakir said.

Bakir hopes that the clean ammonia ecosystem development initiative will trigger a multiplier effect for the Indonesian economy,while supporting Indonesia's commitment to achieve net zero emissions. Therefore,Bakir is optimistic that PICAF 2023 can provide benefits for all participants and become a momentum to encourage the creation of a clean ammonia ecosystem in Indonesia.

Special Advisor to the Ministry of Energy and Mineral Resources (ESDM) Triharyo Soesilo revealed a number of important points that PT Pupuk Indonesia must do if it is interested in developing blue and green ammonia.

According to Triharyo,one of the important points that has not been done so far is to establish cooperation with subsurface companies that have CO2 reservoir (storage) capacity to successfully develop Blue and Green Ammonia.

"Going back to Pupuk Indonesia's interest in developing Blue Ammonia and also Green Ammonia,my advice about the Ministry of Energy and Mineral Resources,number one,if you want to do it,you have to work with companies below the surface," said Triharyo.

Not only that,Triharyo also said that an understanding of the Carbon Market is needed to recover some of the CCS/CCUS Capex and Opex investment costs,in order to improve its economics.

"Secondly,you have to find and develop your own carbon marketing. You are very good at selling your own carbon,urea,ammonia,and buying sulfur and phosphate. However,you have to start developing carbon economics expertise," he explains.

Meanwhile,if PT Pupuk Indonesia is interested in producing Green Ammonia,it needs an understanding of Electrolyzer technology,plant site selection with minimum electricity costs,as well as the need to understand market demand and prices for Blue and Green Ammonia.

"Next for Green Ammonia,you need an understanding of Electrolyzer Technology,this is very important for Green Ammonia production,and you need to choose a plant location with minimum electricity costs," he said.

Acting Director General of Chemical,Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry Ignatius Warsito revealed that global ammonia demand is predicted to reach 688 million tons by 2050. This number increased three times compared to demand in 2025.

"The production cost of renewable ammonia for new plants is expected to drop to USD 310-610 per ton by 2050. Currently,the production cost of natural gas and coal-based ammonia is USD 110-340 per ton. Carbon Capture Storage (CCS) will increase the cost by USD 100-150 per ton,bringing the fossil-based low-carbon production cost to USD 210-490 per ton," Warsito explained.

Warsito added that the projection of ammonia production under the scenario of limiting temperature rise to 1.5˚C is that currently most ammonia is produced from natural gas 72% and coal 22). Warsito said,the combined capacity of all renewable ammonia projects is 15 Mt in 2030,which is 8% of the current global ammonia production.