COP28: Indonesia's Pertamina sets targets for CO2, methane and flaring cuts

Indonesia's Pertamina has laid out targets for cutting CO2 and methane emissions and flaring, along with a biofuels and carbon capture strategy, but will maintain focus on oil and gas exploration due to its overarching energy security mandate, its CEO Nicke Widyawati said in a statement Dec. 1.

To meet the country's energy security concerns, Pertamina will follow a three-pronged strategy: decarbonize the company's operations, establish new low-carbon businesses, and implement carbon reduction programs, Widyawati said in a statement as part of Indonesia's participation at the UN Climate Change Conference.

The statement came ahead of the signing of an agreement by about 50 oil and natural gas producers, including Saudi Aramco and 29 other national oil companies, to reduce their carbon emissions to net zero by 2050 and curb methane emissions to near-zero by 2030, S&P Global Commodity insights reported previously.

She added Indonesia cannot entirely shift from fossil fuels to renewable energy, as this would jeopardize energy security, and Pertamina is saddled with the burden of ensuring stable energy supply for economic growth.

"However, we also need to manage the balance for energy equality, which includes accessibility and affordability of energy, and energy sustainability in reducing carbon emissions in our operations," Widyawati said.

She said Pertamina will continue to focus on its core business of oil and gas, citing Indonesia's goal of increasing oil and gas production from current 700,000 b/d to 1 million b/d by 2030.

However, the goal must now be met sustainably, and Pertamina will focus on both energy efficiency and methane emission reductions.

"Currently, we are only focusing on reducing CO2 emissions, whereas methane has the capacity to be more environmentally destructive than CO2. Hence, the target is a 7.6% reduction in methane and a 5.5% reduction in carbon emissions, along with a 16.7% reduction in utilization of flares," she said.

Biofuels focus

Pertamina is also enhancing the development of low-carbon products by producing biofuels.

"With B35, last year we successfully reduced around 32 mt of CO2 per year. And we will add more B35 now and next year, B40. Even in our new national energy policy, the target is up to B60," she added.

Pertamina has a biogasoline initiative under which bioethanol from sugarcane, corn, and cassava is blended with gasoline. Under the Indonesian National Energy Policy, Pertamina will initially begin with 5% ethanol (E5) and progressively increase to 40% ethanol (E40).

There are three major advantages of this program, that is reduction in fuel imports, lower pollution and creation of jobs in the upstream sector, she said.

Pertamina is also implementing carbon balancing, which refers to minimizing emissions by using Carbon Capture, Utilization, and Storage (CCUS) and nature-based solutions such as forests, which are currently capable of absorbing up to 15% of world emissions.

However, Widyawati acknowledged that Pertamina faces several challenges in implementing these measures, including regulatory frameworks, to accelerate the development of renewable energy, technology, finance, and capacity building.

"We need global collaboration on how we can address these challenges, especially government support," she said.

Oil, gas output to rise

Meanwhile, Hudi D Suryodipuro, the Head of Program and Communication Division at Indonesia's upstream regulator SKK Migas, said the country is integrating CCS/CCUS in oil and gas projects as part of the government's commitment to cut carbon emissions.

He said CCS/CCUS will also be implemented in Inpex's Abadi Masela and BP's Tangguh LNG projects.

The Tangguh project has the potential to store up to 1.8 Gt of CO2, and in addition to gas production, it will inject around 30 million mtCO2 by 2035 into existing reservoirs, he said.

"This is certainly evidence of the seriousness of the government, SKK Migas, and oil companies in applying CCS/CCUS technology to reduce carbon emissions and maintain a sustainable environment," he added.

Suryodipuro explained that the energy needs of the oil and gas industry in Indonesia continue to increase, and despite a lower percentage contribution to total demand, the absolute output will grow.

According to the National General Energy Plan, demand for crude oil and gas is expected to rise by 139% and 298%, respectively, by 2050.

"This means that exploration to find new oil reserves must continue because besides the increasing demand, the potential for oil and gas in Indonesia is still promising. Out of 128 producing basins, only 20 basins are currently in production," he said.