Month: October 2025

PT Pertamina Geothermal Energy (PGE), a publicly listed subsidiary of state-owned Pertamina, has commenced construction of a green hydrogen project in Ulubelu, Lampung. With an investment of US$3 million, the pilot facility is designed to produce up to 100 kilograms of green hydrogen per day, operating at an efficiency rate of 82 to 88 percent. The project is expected to begin operations in 2025. Notably, the facility will be the first to integrate Anion Exchange Membrane (AEM) electrolyzer technology with geothermal energy as a clean power source.

As a carbon-free fuel in both production and use, green hydrogen is regarded as a key solution for decarbonizing industries that are challenging to electrify, such as steel, cement, and transportation. PGE President Director Julfi Hadi emphasized that the project represents an important milestone in placing Indonesia within the global clean energy supply chain. He noted that Ulubelu could serve as a replicable innovation hub for other geothermal areas and outlined PGE’s broader strategy of utilizing green hydrogen as feedstock for derivatives such as green ammonia and methanol. These products are projected to become vital fuels and raw materials for future low-carbon industries. Pertamina Corporate Communications Vice President Fadjar Djoko Santoso further highlighted that the initiative contributes directly to Indonesia’s 2060 net-zero emissions target.

The Indonesian government views hydrogen as central to its decarbonization agenda. As Southeast Asia’s largest economy, the country seeks to reduce reliance on fossil fuels, strengthen energy security, and establish itself as a hydrogen export hub. Hydrogen functions as an energy carrier, storing and transporting energy from other sources, and can be used in fuel cells to generate electricity and heat. These attributes make it a promising option for low-carbon energy solutions. According to Goldman Sachs, the green hydrogen market could eventually reach a global value of US$12 trillion, attracting significant investment. Similarly, the International Energy Agency (IEA) projects that hydrogen development will create substantial employment opportunities while enhancing energy resilience.

In the domestic context, green hydrogen has the potential to replace natural gas and coal, while also serving as a future export commodity. To accelerate its adoption, Indonesia released the National Hydrogen Strategy (SHN) in December 2023, outlining policies to promote hydrogen production and consumption. In April 2024, the government followed with the National Hydrogen and Ammonia Roadmap (RHAN), which sets out detailed plans and action steps for scaling hydrogen and ammonia development nationwide.

However, challenges remain, particularly regarding production costs. Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), observed that green hydrogen currently costs between US$6 and US$10 per kilogram, three to four times higher than hydrogen derived from natural gas. The elevated costs stem from expensive electrolyzer technology, renewable electricity prices, and the limited scale of renewable energy infrastructure. Despite these constraints, Fabby expressed optimism that the sector will become more viable as renewable energy capacity expands, lowering production costs over time.

In sum, PGE’s green hydrogen pilot project represents both a technological breakthrough and a strategic step in Indonesia’s energy transition. By leveraging geothermal resources and advanced electrolysis, the initiative underscores the nation’s ambition to decarbonize its economy, strengthen energy security, and capture opportunities in the emerging global hydrogen market.

September 10, 2025, The Jakarta Post

(https://www.thejakartapost.com/business/2025/09/10/pertamina-breaks-ground-on-3m-green-hydrogen-project.html)

The Indonesian government has announced the establishment of six new special economic zones (SEZs) targeting a range of industries, including halal products and electric vehicles (EVs). According to Susiwijono “Susi” Moegiarso, Secretary to the Coordinating Economic Minister, the zones are awaiting the issuance of government regulations before becoming operational. Among them, the Sidoarjo SEZ in East Java is set to specialize in halal products, aiming to integrate Indonesia into global halal supply chains. Another SEZ, located in Subang, West Java, will focus on strengthening Indonesia’s EV ecosystem, with interest from Chinese manufacturers such as BYD. Details on the remaining four SEZs will be disclosed once the relevant regulations are enacted.

As of June 30, Indonesia operates 25 SEZs across industries including manufacturing, digital technology, tourism, wellness, and maintenance, repair, and overhaul (MRO) services. These SEZs span 23,798 hectares nationwide, with seven on Java and 18 outside the island. Collectively, they attracted IDR 40.48 trillion (US$2.46 billion) in realized investment in the first half of 2024, accounting for 48.2 percent of the annual target and representing a 29 percent year-on-year increase. The zones also generated employment for 28,094 people.

Susi emphasized that developing SEZs is aligned with national priorities to advance downstream industries, enhance the value of domestic natural resources, expand exports, and reduce reliance on imports. A prominent example is the Gresik SEZ in East Java, home to PT Freeport Indonesia’s smelter, described as the world’s largest, which will strengthen the national copper industry while supporting gold production of 52 tonnes annually.

Other SEZs highlight Indonesia’s efforts to position itself in global supply chains. The Sei Mangkei SEZ in North Sumatra has become a key hub for downstream palm oil, with exports valued at IDR 2.7 trillion in 2024. The zone is also expected to attract an additional US$20 million in investment from PT Unilever Oleochemical Indonesia for expansion. In Central Java, the Kendal SEZ is contributing to the global EV supply chain through exports of battery anodes to the United States. Its battery plant has an annual capacity of 80,000 tonnes, enough to support production for approximately 1.5 million EVs.

Meanwhile, the Nongsa SEZ in Batam, Riau Islands, is bolstering Indonesia’s digital economy by securing IDR 5.8 trillion in investment from leading global data center operators, including China’s GDS, Hong Kong’s Gaw Capital, Singapore’s Princeton Digital Group, and New Zealand’s BWDigital Infra Indonesia. In addition, the Galang Batang SEZ in Bintan, also in the Riau Islands, currently exports 2 million tonnes of smelter-grade alumina annually and plans to double capacity to 4 million tonnes per year.

Overall, the planned new SEZs reflect Indonesia’s strategy to deepen industrial downstreaming, attract foreign investment, and enhance its participation in global value chains. By combining diverse focuses—ranging from halal products and EVs to palm oil, digital infrastructure, and mineral processing—the government seeks to ensure sustainable growth, job creation, and stronger economic resilience.

September 10, 2025, The Jakarta Post

(https://www.thejakartapost.com/business/2025/09/10/new-economic-zones-to-invite-ev-firms-halal-products-industry.html)

Indonesia has embarked on an ambitious initiative under President Prabowo Subianto to significantly expand its dairy industry by importing one million Holstein-Friesian cows over five years at an estimated cost of nearly US$3 billion. The program is intended to support the government’s flagship free meals scheme for 83 million children and expectant mothers, while also reducing reliance on imported milk powder from Australia, New Zealand, and the United States. Currently, Indonesia’s dairy herd stands at around 220,000, and the plan aims to more than quadruple that number.

Unlike conventional state-funded programs, this initiative relies heavily on private sector participation. The Ministry of Agriculture has pressed over 200 businesses, including multinational corporations, to commit to importing at least 20 cows per year from 2025 to 2029. By May, 196 businesses had pledged participation, though many had no prior experience in dairy farming. Reports suggest companies felt compelled to comply, fearing potential obstacles in securing import licenses for their core operations, such as frozen meats and milk powder, if they refused. In one case, government approval of an import license was expedited only after a company increased its cattle commitment to the ministry’s “minimum” threshold.

Progress has been slower than anticipated. Since the scheme’s December launch, only 11,375 dairy cows had been imported by July—well short of the 200,000 targets for 2024. Most imports so far have come from Australia. The sluggish pace has raised concerns about the feasibility of scaling up both the cattle program and the promised free meals initiative, which was central to Prabowo’s election campaign.

Cooperatives such as Laras Ati in West Java are at the forefront of implementation, managing cattle purchased by private investors with limited livestock experience. For example, members of the Indonesian Association of Animal Protein Entrepreneurs (APPHI), primarily engaged in cold chain distribution, collectively purchased hundreds of cows now housed in cooperatives. Businesses are expected to invest around IDR 45 million (US$2,800) per cow, covering purchase, transport, feed, and vaccines, with returns projected in approximately three and a half years through shared revenue with cooperatives.

While the government has presented this approach as an opportunity for investment and self-sufficiency, critics question its design and sustainability. Industry experts have expressed doubts about the capacity of inexperienced firms to manage livestock effectively, as well as the adequacy of Indonesia’s infrastructure to handle large-scale imports. Animal welfare and disease management are also pressing concerns, particularly after a devastating foot and mouth disease outbreak in 2022 reduced cattle populations in some regions by half.

Analysts warn that without stronger oversight and more realistic planning, the program risks failing to deliver the promised results. Rochadi Tawaf of the Cattle and Buffalo Breeders Association emphasized that success requires proven expertise in dairy management, not inexperienced firms compelled by government pressure. Similarly, foreign exporters, such as Dairy Livestock Exports in Australia, have highlighted deficiencies in Indonesia’s facilities to ensure animal welfare on such a scale.

Overall, the initiative reflects Indonesia’s broader push for food security and self-sufficiency. However, its heavy reliance on reluctant, inexperienced private investors, slow progress, and structural weaknesses in infrastructure and management cast uncertainty over its long-term viability and the government’s ability to meet both nutritional and economic goals.

September 9, 2025, The Jakarta Post

(https://www.thejakartapost.com/business/2025/09/09/dairy-duty-indonesia-presses-businesses-to-find-a-million-cows.html)