To decarbonise the maritime industry, there will be a massive need for green fuels and associated technologies, with scalable zero-emission fuels (SZEF) such as green hydrogen and green ammonia considered the most promising fuels for the shipping’s energy transition, according to the P4G-Getting to Zero Coalition, in industry collective jointly implemented by the Global Maritime Forum, World Economic Forum, Friends of Ocean Action, Environmental Defense Fund, University College London and International Association of Ports and Harbors.
A new P4G-Getting to Zero Coalition report Shipping’s energy transition: strategic opportunities in Indonesia explores the potential for Indonesia to accelerate and to benefit from international maritime decarbonisation. The report finds that Indonesia has several opportunities to leverage the global transition to zero emission marine fuels towards key national objectives. However, achieving this will require targeted action in order to unlock these opportunities.
Ingrid Sidenvall Jegou, Project Director, Global Maritime Forum, said: “The increasing momentum behind international maritime decarbonisation holds huge potential for countries like Indonesia. To better realise this opportunity and signal strong public buy-in, Indonesia should seek to leverage its influence in international negotiations, particularly drawing on its role as the host of the G20 later this year, in addition to COP27 and upcoming IMO negotiations.”
With over 17,000 islands, Indonesia is intrinsically tied to the maritime industry, with many small vessels making up the domestic fleet, in addition to a high volume of international traffic passing through Indonesian waters. Maritime activities contribute massively to Indonesian society and the economy, with there being strong potential to leverage these activities to decarbonize other industrial activities and support wider economic development.
Margi Van Gogh, Head, Supply Chain and Transport, World Economic Forum, said: “Identifying strategic opportunities for renewable energy production in emerging and developing economies, like Indonesia, is central to enabling a just & equitable transition for international shipping. By scaling its renewable energy potential, Indonesia could decarbonize domestic industry and aid the broader shipping energy transition – a pathway that could enable Indonesia to become a leading producer and supplier of sustainable zero emission fuels, create new sustainable jobs and contribute to economic growth.”
By establishing green hubs, Indonesia can cement its position as a key maritime axis, creating new revenue streams from SZEF exports and bunkering and improving access to import and export markets. The development of scalable zero-emission fuel infrastructure could lead to an investment of between Rp 46 – 65 trillion IDR (US$ 3.2-4.5bn) by 2030. This is in addition to the potential development of other industries, expertise, environmental protection benefits and R&D emanating from decarbonisation of maritime shipping and the adoption of SZEF. After extensive consultation with key Indonesian stakeholders, the report names three key opportunities including the possibility of establishing Kalimantan as a bunkering hub, the electrification of the small boat fleet, and a decarbonization hub powered by geothermal activities.
Essential to unlocking these opportunities is a facilitative policy and financial framework capable of effectively motivating and convening key actors across sectors and value chains. Presently, Indonesia benefits from its existing policy frameworks in the field of maritime, energy and climate policy, however more work is needed to coordinate policies more specifically around the maritime decarbonization opportunity.
The report is available for download here.
