Jakarta, September 15, 2025 – The Institute for Essential Services Reform (IESR) believes that green hydrogen can significantly contribute to global emission reduction and decarbonization efforts. Hydrogen has the potential to replace fossil fuels in hard-to-abate sectors such as transportation, iron and steel manufacturing, petrochemicals, and energy storage. Furthermore, green hydrogen can enhance energy security by providing a stable supply of renewable energy from local sources, particularly wind and solar, and reduce reliance on imported fossil fuels.
IESR views the utilization of green hydrogen as aligned with the “Asta Cita” (Eight Goals) vision of Golden Indonesia 2045. Using renewable energy to produce green hydrogen will decrease dependence on imported fossil fuels and help achieve energy independence.
Fabby Tumiwa, CEO of IESR, stated that global hydrogen production is growing rapidly, with demand trailing supply over the last five years. According to data from the Hydrogen Council, committed clean hydrogen capacity by 2025 is projected to exceed 6 million tons per year, while new demand is around 3.6 million tons per year. On the investment side, over USD 110 billion has been committed to more than 500 hydrogen projects worldwide, including those in the final investment decision (FID), construction, and operational phases. The number of hydrogen projects has increased 7.5-fold since 2020. Despite this growth, approximately 3% of these projects have been canceled in the past 18 months due to policy uncertainties and an undeveloped market.
“This is part of healthy market dynamics. Just like with solar, wind, or batteries in their early stages, the hydrogen sector’s growth is also going through a turbulent initial phase. Sustainable projects are those with a clear business model and strong policy support,” said Fabby during the webinar, “Road to Indonesia Energy Transition Dialogue (IETD): Examining Global and Indonesian Green Hydrogen Developments,” which was organized by IESR and supported by the British Embassy Jakarta through the Green Energy Transition Indonesia (GETI) project on Friday (September 12).
Fabby added that the focus for green hydrogen development should not only be on building production capacity but also on ensuring the growth of demand and the market. This requires attractive, bankable business models with adequate policies, regulations, and incentives.
Indonesia has abundant renewable energy potential, including solar, wind, hydro, and biomass, which can serve as a primary resource for green hydrogen production. Based on the National Hydrogen and Ammonia Roadmap, Indonesia’s projected hydrogen demand is 11.7 million tons per year by 2060, while potential production could reach 17.5 million tons per year. This positions Indonesia not just as a consumer but also offers the opportunity to become a clean hydrogen exporter.
Juniko Nur Pratama, IESR’s Industry Decarbonization Program Manager, identified electricity generation and industry as the two main sectors expected to be the largest consumers. Within the industrial sector, ammonia and fertilizers, iron and steel, chemicals, and methanol are the most prepared to adopt green hydrogen.
“In the ammonia and fertilizer industry, green hydrogen has the potential to become a primary feedstock, replacing hydrogen from natural gas. In the iron and steel industry, green hydrogen can substitute coal in processing iron ore. Meanwhile, in the chemical and methanol sectors, green hydrogen opens significant opportunities for producing biofuels and various environmentally friendly chemicals,” explained Juniko.
IESR emphasizes three key elements to accelerate Indonesia’s green hydrogen ecosystem. First, clear policies and regulations are needed to lower technology costs, including fiscal and non-fiscal incentives, to make hydrogen projects more bankable. Second, domestic demand must be built, especially in the industrial and electricity sectors, to create market certainty. Third, hydrogen projects should be developed in strategic locations, close to energy sources and markets, to ensure economic and technical efficiency and business viability. The hope is that the many initiatives in hydrogen project development will drive green financing, accelerating industrial emission reductions and increasing the adoption of green hydrogen in the industrial sector. Best practices in hydrogen adoption can expedite the development of low-emission technologies, lower green hydrogen production costs, and strengthen hydrogen’s position as a key technology for emission reduction in the industrial sector.
Discussions on green hydrogen will be a key part of the Indonesia Energy Transition Dialogue (IETD) 2025, which will take place from October 6-8, 2025. On the third day of IETD 2025, a Green Hydrogen Forum will be held with the theme, “Establishing Indonesia’s Green Hydrogen Ecosystem”, to support the goals of the National Hydrogen Strategy, which was launched by the Ministry of Energy and Mineral Resources in December 2023.
The Green Hydrogen Forum will include a pitching session for companies involved in developing the green hydrogen ecosystem, from technology providers to end-users. During this session, selected companies will present their profiles and green hydrogen utilization plans to financial institutions that could potentially fund these renewable energy projects. Registration is available at https://www.ietd.info/.
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