Decarbonization Strategy Evaluation at Pertamina
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Date
2022-05-13
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Abstract
As a state-owned energy company, Pertamina has an obligation to secure the nation’s energy independence while at the same time supporting Indonesia’s Net Zero Emission (NZE) Target by 2060 or sooner. To achieve this goal, Pertamina has crafted the Decarbonization of Business Activities and New Business Building roadmap. Since the NZE roadmap is designed using the top-down approach to comply with the national NZE target in 2060, the decarbonization strategy has yet to be prioritized and evaluated in detail whether it will contribute effectively to the target.
The researcher developed six main steps as the methodology, mainly used to analyze the strategy from various points of view in answering the research problem. First, mapping and classifying unique emission reduction efforts from each business unit into defined strategic initiatives were conducted. Furthermore, to see the priority initiatives in each business unit, every projected emission initiative was calculated in percentage relative to the total emission reduction projection. Moreover, the researcher calculated overall emission reduction contribution to see which type of activity and business unit has the biggest contribution to company-wide. To see and analyze how much the emission reduction target by the program can cover the emission reduction target by the NZE roadmap, the researcher plotted the emission reduction trend for the upstream business unit in the short and medium term. In addition, the researcher plotted the emission intensity target in the Business As Usual (BAU) scenario and NZE Roadmap Target Scenario. Finally, the researcher used plotted emission intensity targets to benchmark various world’s significant oil and gas producers and Oil and Gas Climate Initiative (OGCI).
As a result, the researcher found that energy efficiency initiatives will be the backbone of decarbonization activities during the short and mid-term periods, followed by loss reduction and green power generation initiatives. However, in the upstream business unit, which was projected to be the biggest contributor, the declared initiatives have only accounted for about 58% of the emission reduction target. Thus, Pertamina should reevaluate its short and mid-term strategies. Otherwise, the accomplishment of the NZE target will be jeopardized.
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Decarbonization Strategy, Net-Zero Emission, Pertamina, Energy Efficiency, CCUS, Emission intensity