Pertamina has again shown its seriousness in its commitment to decarbonize its business by signing 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 the Directors of Strategic Planning and Business Development of Pertamina NRE, Fadli Rahman, the Director of Marketing Center and Commerce of Pertamina Patra Niaga Riva Siahaan, and the Main Director of Pertamina Geothermal Energy Tbk. Ahmad Yuniarto. The signing was witnessed by Senior Vice President Strategy & Investment Daniel Syahputra Purba, Chief Executive Officer of Pertamina NRE Dannif Danusaputro, and Chief Executive Officer of Pertamina Patra Niaga Alfian Nasution.
"Today is a very historic milestone for Pertamina's journey in the midst of an energy transition. This is an extraordinary achievement, especially in terms of decarbonization initiatives. This is not an easy task for all of us. We hope that Pertamina NRE can build competency in building a carbon business for the Pertamina Group. In the future, if we already have strong competence, we can also play not only in the domestic market but also in the international market," said SVP Strategy & Investment, Daniel S. Purba in his direction.
Pertamina has aspirations that are in line with the government's target, namely net zero emissions by 2060. This aspiration is achieved through two pillars, namely decarbonizing emissions released 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 purchased carbon credits from Pertamina NRE with a volume of 1.8 million tons of equivalent carbon emissions for a one-year period. The carbon credit will offset the carbon produced by Pertamina Patra Niaga from its business.
"Pertamina Patra Niaga is proud to be able to work together on carbon trading initiatives. Pertamina Patra Niaga has a concept called B2B (business-to-business) One Solution where we don't only sell fuel to our industrial consumers; we also offer solutions for them, one of which is the need to decarbonize emissions from their businesses. This carbon trading collaboration with Pertamina NRE is not only for our internal needs; it will also be an opportunity for us to offer them, such as in the mining and electricity sectors," said the Chief Executive Officer of Pertamina Patra Niaga Alfian Nasution. He also continued that these carbon credits also have the potential to be offered to export-oriented industrial consumers.
In his remarks, Chief Executive Officer of Pertamina NRE Dannif Danusaputro said, "Pertamina supports the achievement of Indonesia's net zero emission target in 2060. In this case, Pertamina NRE acts as a carbon trading aggregator in the Pertamina Group. Furthermore, we hope that it can also be implemented within the SOE environment. We are very confident that Pertamina NRE can provide added value. This is a new business for Pertamina, but I really believe this business has the potential to be of great value in the future." He believes that the demand in the future will be large, especially if there is a policy related to carbon taxes.
The source designated for carbon offsets is the Lahendong geothermal power plant (PLTP) units 5 and 6, which have a combined capacity of 2x220 MW and are managed by PGE. The PLTP, which is located in North Sulawesi, is one of PGE's Clean Development Mechanism (CDM) projects and has held Verra's Verified Carbon Standard (VCS) since 2018.
"PGE has entered the carbon credit market since 2011. We are very excited about this carbon trading initiative, both for the big Pertamina family and for the carbon market in Indonesia. Hopefully today will be the start of success for the future," said Ahmad Yuniarto.
Pertamina is strongly committed to running a responsible and sustainable business through the implementation of environmental, social, and governance (ESG) aspects. The decarbonization initiative continues to be rolled out internally within the Pertamina Group. In addition, through one of its subholdings, Pertamina NRE, decarbonization initiatives are also carried out through collaboration with external strategic partners, one of which is Nature-Based Solutions (NBS).
