Pertamina supports the Indonesian government's commitment to targeting a 29% reduction in carbon emissions by 2030. One of the contributions and real roles in reducing carbon emissions is carried out by PT Pertamina Geothermal Energy (PGE) as part of the Subholding Power & New Renewable Energy (PNRE), through Clean Development Mechanism (CDM) mechanism.
CDM is a project with the function of reducing greenhouse gas (GHG) emissions which can be economically beneficial and can reduce global warming to support sustainable development. This is in line with the commitment of the Government of Indonesia in the Intended Nationally Determined Contribution (INDC) document presented at the 2015 UN Climate Conference (COP-21) in Paris.
Indonesian President Joko Widodo at a press conference in Paris on November 30, 2015 said that the reduction of greenhouse gas (carbon) emissions was a consequence of the signing of the Kyoto Protocol by 188 countries on December 11, 1997. The Indonesian government established a commitment (National Determined Contribution-NDC) to reduce greenhouse gas emissions to 29 percent by 2030, even with international assistance it could be 41 percent.
Indonesia's commitment to reduce carbon emissions itself was born in response to the issue of climate change where Indonesia is one of the countries that is vulnerable to the impacts of climate change.
PGE currently manages 15 Working Areas with a total installed geothermal capacity of 1,877 MW in its Working Area (including the Joint Operation Contract - JOC), and there is a potential for carbon emission reduction of 9.7 million tons CO2e/year. Some of these emission reduction potentials have been included in the Clean Development Mechanism (CDM) mechanism in the United Nations Framework Convention on Climate Change (UNFCCC).
The UNFCCC itself is an environmental agreement signed by countries that are members of the United Nations. The agreement, signed in 1992, aims to control the level of greenhouse gas emissions in the atmosphere to a level that is capable of preventing human interference with the climate system.
This carbon emission reduction step is also reflected in at least 7 (seven) PGE Carbon Credit Projects which began in 2010. The 7 projects consist of the Clean Development Mechanism (CDM) Project, Verified Carbon Standard (VCS) and Gold Standard as a premium. CDM Project label.
Carbon Credit Economic Potential
Besides having a positive impact on the environment, proper carbon management can also provide economic potential. Although there is currently a significant challenge in reducing the selling price of carbon credits after the end of the Kyoto protocol, with the increasing level of concern of countries in the world on the use of clean energy and reducing carbon emissions, PGE hopes that the CDM market will be better and more stable in the coming years.
Currently, there are five carbon credit projects at PT Pertamina Geothermal Energy of the Clean Development Mechanism Gold Standard (CDM-GS) type, namely Kamojang Unit 5, Karaha Unit 1, Lumut Balai Unit 1&2, Lumut Balai Unit 3&4, and Ulubelu Unit 3&4. With the "Gold Standard" premium label certification, the selling value of carbon credits can be maximized. The management of CDM-GS is carried out with SouthPole Carbon Assets Management, Ltd. (SPCAM). In addition, there is also a Verified Carbon Standard (VCS) carbon credit project for Lahendong Units 5&6. This project was originally a CDM project which was later converted into a VCS due to the potential for a higher selling price of carbon credits which is currently in the preparation stage for verification and sale.
VCS itself is a certificate of greenhouse gas emission reduction project made by non-commercial institutions The Climate Group, International Emissions Trading Association (IETA), The World Economic Forum, and The World Business Council for Sustainable Development in 2005. This certification focuses on the value of added in the form of the development of new methodologies outside of CDM with relatively simpler mechanisms and cheaper transaction costs.
