Penetrating the Fortune Global 500, This is How Pertamina Reduces Carbon Emissions and Supports Economic Growth

August 10, 2023 – PT Pertamina (Persero), the only national company listed among the top 500 companies in the world according to Fortune Global 500, shares the aspiration with the government to achieve net zero emissions (NZE) no later than 2060. This effort is not only about developing greener businesses but also decarbonization. It was conveyed by the Director of Strategic Planning and Business Development of Pertamina New & Renewable Energy (Pertamina NRE), Fadli Rahman, during the Indonesia Future of Climate Summit 2023 (IFCS 2023) on Wednesday (8/9).

In 2020, the SOE ecosystem contributed around 30 to 35 percent of the total carbon emissions in Indonesia, covering scopes 1, 2, and 3. To reduce emissions, several SOEs collaborate to implement decarbonization initiatives, such as the collaboration between Pertamina subsidiary, Pertamina NRE, and Perum Perhutani in nature-based solutions (NBS) development.

"Pertamina as an energy SOE has a strategic role to support national economic growth by ensuring energy resilience. Therefore, in this energy transition period where fossil energy is still in use, and parallel, gradual new and renewable energy development is being carried out. Through NBS initiatives, we can reduce its carbon emissions,” Fadli said.

There are nine concessions by Perum Perhutani with the potential for NBS development. The NBS collaboration between Pertamina NRE and Perhutani began with the head of agreement (HoA) signing on June 20, 2022, followed by the master agreement (MA) signing on February 20, 2023. Two out of the Nine concessions have the potential to achieve carbon credits of up to 25 million tons over 30 years. The collaboration between these two entities will continue with seven more concessions developments. In total, this collaborative project could reduce 7 million tons of CO2e per year, or cumulatively 20 million tons of carbon credits by 2030.

Pertamina NRE’s carbon credit trading is based on NBS and technological solutions. An example of technology-based carbon credit trading is the renewable energy power plant's utilization as a carbon offset source. Technology-based carbon credit trading has been carried out since 2011 by Pertamina Geothermal Energy (PGE), a subsidiary of Pertamina NRE.

Pertamina NRE has collaborated with another Pertamina subsidiary, Pertamina Patra Niaga, for carbon credit trading. Pertamina Patra Niaga purchases carbon credits from Pertamina NRE with a volume of 1.8 million tons of carbon equivalent emissions for one year. The designated carbon offset source is the Lahendong geothermal power plant (PLTP) units five and six with a capacity of 2x20 MW managed by PGE.

Fadli added, there are three main challenges in carbon credit trading related to time. First, the challenge of time in running the nine NBS concessions. Second, to wait for government regulations related to carbon trading. Currently, Pertamina NRE continues to coordinate with the Ministry of Environment and Forestry regarding regulations. And third, to wait for the carbon credit market formation in Indonesia. As an extension of the government, Pertamina ensures that the domestic market is ready and prioritizes it before serving the international market.

Vice President of Corporate Communication of Pertamina, Fadjar Djoko Santoso, added that Pertamina supports the Pertamina NRE program in reducing carbon emissions. “Pertamina NRE’s initiative reflects its contribution to energy transition and decarbonization, as well as Pertamina’s role as a Fortune Global company,” he said.

Decarbonization is one of Pertamina’s commitments to achieving sustainability while continuously improving its business performance. Pertamina is the only Indonesian company and the only state-owned enterprise listed in the Fortune Global 500 in 2023. This year, Pertamina is ranked #141, rising 82 places from 2022 when it was ranked #223. Pertamina has even jumped 146 ranks from 2021 when it was ranked #287.

Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all of Pertamina’s business lines and operations.**