Jakarta, 12 December 2023
The Nationally Determined Contribution (NDC) document of each ASEAN Member States has clearly distributed the sectoral target that highly contributes to the greenhouse gas (GHG) emissions. Based on the 7th ASEAN Energy Outlook, the industrial Total Final Energy Consumption (TFEC) in ASEAN is projected to increase by 23.3% to 544.3 Mtoe by 2025. In contrast, oil demand is predicted to decrease by 18% while other fuel utilization grew over the same period. However, though the industrial sector is very challenging to decarbonize, it is still considered to be discussed as one of the key actions to reduce GHG emissions in achieving the net zero target.
In this opportunity, PT Kilang Pertamina International held an internal event titled “The Initiative Arrangements for Energy Transition and Decarbonization”. Through an FGD session, it aims to pursue a profitable and business growth among the energy transition and decarbonization. PT Kilang Pertamina Internasional (KPI) is a subsidiary of Indonesia’s state-owned oil and gas company, Pertamina. Specializing in refinery operations, KPI focuses on expanding Pertamina’s global presence by managing and operating refineries internationally, prioritizing to plan a strategic action in oil refining. As one step closer towards net zero, the company intended to align its mission towards Indonesia’s NDC document.
The session started with an opening remark delivered by PT Kilang Pertamina International. It underlined the company aims to significantly contribute to Indonesia’s Nationally Determined Contributions (NDC) by 2030. By setting realistic targets as a baseline, the company plans to prioritize profitable initiatives aligned with business perspectives, ensuring sustainability, and providing valuable insights into decarbonization. Through well-managed efforts, PT KPI strives to support Indonesia’s NDC and its Net Zero Target, demonstrating a commitment to environmental responsibility while maintaining economic viability in the energy sector. It is also mentioned that a knowledge sharing on net zero and its alignment in the industrial and energy sector is crucially needed to form a strong collaboration between the country and its industries.
ACCEPT II serves a regional perspective of Net Zero by providing detail information on the NDCs document of all ASEAN Member States with each progress to improve the cross-sectoral knowledge sharing on the relevant issue. Aldilla Noor Rakhiemah, Senior Research Analyst of ACCEPT II addressed the importance of setting up a clear target to support national’s effort on attaining net zero future. Started with the introduction of ASEAN Centre for Energy (ACE) and its relevancies toward the ASEAN Plan of Action for Energy Cooperation, she addressed the ambitious targets of ASEAN according to each Program Area. One of the important points that she delivered is the different definition between carbon neutrality and net zero based on IPCC Special Report on Global Warming (2018) and ASEAN Strategy for Carbon Neutrality. Based on IPCC documents, carbon neutrality has the same meaning with net zero, where it is defined as a situation achieved when anthropogenic GHG emissions to the atmosphere are balanced by anthropogenic removals over a specified period. Meanwhile, the ASEAN Strategy for Carbon Neutrality stated that carbon neutrality is a condition where the CO2 emissions in a state are zero within the boundary of a state/region is balanced by carbon dioxide absorbed by carbon sinks. The report similarly defines net zero as carbon neutrality in broader scope of greenhouse gas emissions.
Specific in the oil and gas industries, Aldilla discussed the regional progress of ASEAN through ASEAN Oil and Gas Outlook. She underlined to balance in prioritizing the effort of energy transition with the energy security. Additionally, she mentioned several ASEAN oil and gas companies which have been showing their commitment toward the energy transition, such as Brunei Shell Petroleum, Pertamina, Petronas, PTT Group, and The Vietnam Oil and Gas Group (PVN). This could be a collaboration opportunity between industries to exchange their strategy and determining an achievable target for their measurement on the emitted GHG emission. Moreover, the high requirement of energy investment and collaboration is needed to accelerate the effort on achieving the net zero target.
During the discussion session, it was noted that a well-managed coordination of energy standard and approach is urgently needed as an initial approach to establishing new strategies that is aligned with the national target. The uncertainty of government regulation still appears as a huge challenge for industries to follow as they should maintain the business value together with the sustainability issues in energy resources. However, the discussion finds that there is a significant effort from the industries to contribute to reducing greenhouse gas emissions from the downstream. midstream, and upstream processes. The willingness of the industry to delve into the sustainability aspect marked new milestones of Indonesia to move toward the net zero target.