Pursuing Carbon Emission-Free Target, KBUMN Develops 5 Strategic Initiatives

Nusa Dua Bali, October 17, 2022 – The Ministry of State-Owned Enterprises (Kemen BUMN) has developed five strategic initiatives to encourage SOEs to build portfolios and ecosystems to support decarbonization and achieve Net Zero Emission (NZE) 2060.

Deputy Minister of SOEs I, Pahala N. Mansyuri, in SOE International Conference Panel III, explained that the Ministry of SOEs' focus is to encourage SOEs to provide positive value and impact for the Indonesian people while innovating and changing their business models.

“Decarbonization is seen as an opportunity for Indonesian SOEs. Because it is an opportunity to improve our energy security and independence,” Pahala said.

In the conference with the theme "Energy Transition and Green Development for Sustainable Growth", Pahala explained that short-term changes would accelerate because of the Russia-Ukraine crisis. However, the Ministry of SOEs sees the medium-term trend, offering five main initiatives. First, establish a carbon market ecosystem among SOEs to accelerate the decarbonization agenda and set a role model for the national carbon market formation, and implement the Nature Base Solution (NBS). Second, developing NRE capacity, including Geothermal, Biomass, Biofuel, and others. Third, build an EV ecosystem to reduce dependence on fuel oil, and reduce imports and fuel subsidies. Fourth, the energy transition mechanism through efforts to reduce dependence on coal-fired power plants. Fifth, develop green industry clusters.

Furthermore, the Government has determined that Indonesia can achieve Net Zero Emissions (NZE) in 2060 and reduce emissions by around 32% by 2030. For this reason, SOEs must develop an initiatives portfolio for each SOE or as an SOE ecosystem or cooperation with others to help achieve the National Determined Contribution (NDC).

“In the Ministry of SOEs, since last year, we have determined that every year we must have KPIs. At least it has been determined what the emission reduction target is. The second is what to do and what are the initiatives to build business opportunities,” he said.

In the conference panel, President of Schlumberger Asia, Amy Chua, revealed that the oil and gas companies she leads are taking three approaches to decarbonization. Namely, reducing their emissions, helping clients/customers in reducing emissions, and investing in new energy.

“So I think this upcoming portfolio will eventually be part of our energy transition,” said Amy Chua.

But according to her, regulation plays a big role. She gave an example in Europe, in 2005, when the European Union Commission created a transitional system. Europe experienced rapid progress 15-17 years later. The emission reductions are phenomenal because their emissions are reduced by almost 43% and traceability up to 42.8%. He assessed that without clear policies, emission reductions would take longer.

“Collaboration and partnership are important. No single entity can do this alone. We are used to doing that, so we have a lot of partnerships and collaborations around the world now."**