Pertamina Group's Synergy Realize Decarbonization through Carbon Trading
Jakarta, April 14, 2023 - Pertamina once again demonstrates its commitment to decarbonizing its business through the signing of a carbon trading cooperation agreement between Pertamina New & Renewable Energy (Pertamina NRE) with Pertamina Patra Niaga and Pertamina NRE and Pertamina Geothermal Energy (PGE, IDX: PGEO) on Wednesday (12/4).
The signing was carried out by Fadli Rahman, Director of Strategic Planning and Business Development of Pertamina NRE, Riva Siahaan, Director of Marketing for Central & Commercial of Pertamina Patra Niaga, and Ahmad Yuniarto, President Director of Pertamina Geothermal Energy Tbk. The signing was witnessed by Daniel Syahputra Purba, Senior Vice President of Strategy & Investment, Dannif Danusaputro, Chief Executive Officer of Pertamina NRE, and Alfian Nasution, Chief Executive Officer of Pertamina Patra Niaga.
"Today marks a historic milestone in Pertamina's journey amid the energy transition. It is an extraordinary achievement, especially in terms of decarbonization initiatives. It is not an easy task for us, and we hope that Pertamina NRE can build competencies in developing a carbon business for Pertamina Group. In the future, with strong competencies, we can participate not only in the domestic market but also in the international market," said SVP of Strategy & Investment, Daniel S. Purba, in his remarks.
Pertamina shares the government's goal of achieving net zero emissions by 2060. This aspiration is achieved through two pillars, namely emissions decarbonization from Pertamina's business activities and building new green businesses. Carbon trading is one of the initiatives undertaken to realize this aspiration. In the cooperation agreement, Pertamina Patra Niaga will purchase carbon credits from Pertamina NRE with 1.8 million tons of carbon equivalent emissions for one year. These carbon credits will offset the carbon emissions generated by Pertamina Patra Niaga from its business.
"It is a pride for Pertamina Patra Niaga to collaborate in carbon trading initiatives. Pertamina Patra Niaga has a concept called B2B (business-to-business) One Solution, where we sell fuel to our industrial consumers and offer solutions to them, including the need to decarbonize emissions from their business. This carbon trading cooperation with Pertamina NRE will not only meet our internal needs but also provide opportunities to offer it to other sectors, such as mining and power generation," said Alfian Nasution, Chief Executive Officer of Pertamina Patra Niaga. He also added that these carbon credits have the potential to be offered to export-oriented industrial consumers.
In his speech, the Chief Executive Officer of Pertamina NRE, Dannif Danusaputro, stated, "Pertamina supports Indonesia's target to achieve net zero emissions by 2060. In this regard, Pertamina NRE is the carbon trading aggregator within the Pertamina Group. Furthermore, we hope this can also be implemented within the state-owned enterprises (BUMN) environment. We are confident that Pertamina NRE can provide value-added. It is a new business for Pertamina, but I am very optimistic that it has the potential to be of great value in the future." He believes that the demand will be significant in the future, especially when there are policies related to carbon taxes.
The designated source for carbon offset is the Lahendong Geothermal Power Plant (PLTP) Units 5 and 6, with 2x220 MW capacity managed by PGE in North Sulawesi. This PLTP is one of PGE's Clean Development Mechanism (CDM) projects that have the Verified Carbon Standard (VCS) from Verra since 2018.
"PGE has been involved in the carbon credit market since 2011. We are excited about this carbon trading initiative for Pertamina and Indonesia’s carbon market. We hope that today marks the beginning of success for the future," Ahmad Yuniarto said.
Pertamina is strongly committed to conduct responsible and sustainable business through environmental, social, and governance (ESG) aspect implementation. Decarbonization initiatives will be rolled out internally within the Pertamina Group. In addition, through one of its sub-holdings, Pertamina NRE, decarbonization initiatives are also carried out through collaborations with external strategic partners, including nature-based solutions (NBS).