Jakarta, August 21, 2024 – As a strategic move towards sustainable growth, PT Pupuk Indonesia (Persero) is set to develop the world’s first hybrid green ammonia project. This project will be undertaken in collaboration with two Japanese corporations, ITOCHU Corporation (ITOCHU) and Toyo Engineering Corporation (TOYO).

This strategic partnership was marked by the signing of a Joint Development Agreement (JDA) titled the "Green Ammonia Initiative from Aceh" (Project GAIA). The agreement was signed by Pupuk Indonesia's President Director, Rahmad Pribadi, along with ITOCHU's President and COO, Keita Ishii, and TOYO's President and CEO, Eiji Hosoi, during the 2nd Asia Zero Emission Community (AZEC) Ministerial Meeting held in Jakarta on Wednesday (August 21). The signing ceremony was witnessed by Rosan Roeslani, Head of the Investment Coordinating Board (BKPM), and Saito Ken, Japan’s Minister of Economy, Trade, and Industry (METI).

Rahmad Pribadi, President Director of Pupuk Indonesia, stated that this collaboration among the three companies represents a significant step towards promoting industrialization in Indonesia, particularly in the development of green ammonia, which is expected to have a positive impact on the national economy.

"In Project GAIA, Pupuk Indonesia will produce green ammonia using an ammonia plant designed and constructed by TOYO in the early 2000s. This green ammonia will then be supplied to ITOCHU as a marine fuel feedstock, creating a comprehensive value chain, and becoming the first of its kind in both Indonesia and the world," he explained.

The objective of Project GAIA is to produce green ammonia at Pupuk Iskandar Muda's PIM-2 fertilizer plant located in the Arun Lhokseumawe Special Economic Zone (SEZ) in Aceh. The production of green ammonia will be supported by the installation of an electrolyzer at the fertilizer plant.

This electrolyzer technology is used to extract hydrogen from water compounds, with the energy for the water electrolysis process sourced from renewable energy. The hydrogen produced in this process is then reacted with nitrogen to form ammonia. This process generates no carbon footprint, which is why it is referred to as green ammonia.

This initiative will also be expanded to other ammonia plants under the Pupuk Indonesia Group and to ammonia plants in other countries in the future. Additionally, the project has been selected by Japan’s Ministry of Economy, Trade, and Industry (METI) as one of the projects under the Global South Future-Oriented Co-Creation Business Expense Subsidy. This program provides subsidies to 13 future-oriented projects in ASEAN.

The initial development phase, namely the Front-End Engineering Design of Project GAIA, will commence in August 2024. Simultaneously, Pupuk Indonesia, ITOCHU, and TOYO will form a joint venture company, with the final investment decision expected to be reached in the first half of 2025, and commercial operations targeted to begin in 2027.

In the same event, Pupuk Kujang also signed a Memorandum of Understanding (MoU) with PLN Indonesia Power and IHI Corporation (IHI) concerning cooperation on green ammonia studies and the implementation of ammonia co-firing demonstrations. This collaboration is expected to find the best operational methods for producing green ammonia and reducing emissions at coal-based steam power plants.

Under this cooperation, Pupuk Kujang will supply green ammonia to be used in the co-firing process at PLN’s Labuan power plant located in Banten, West Java. Meanwhile, IHI will install an electrolyzer at the Labuan power plant to be delivered to Pupuk Kujang, and will also install a special burner for the co-firing process at the Labuan power plant.

"With over 50 years of experience in the production, storage, and distribution of ammonia, Pupuk Indonesia is the right strategic partner to further develop green ammonia production in Indonesia. This cooperation represents one of Pupuk Indonesia's business diversification efforts, not only supporting food security but also promoting industrial downstreaming and adding value to the national economy, as well as supporting the government's target of achieving Net Zero Emissions by 2060," Rahmad concluded.