Indonesia’s National Positioning

Countries that are decarbonising aim to maximise electrification to strengthen energy security and avoid the price volatility associated with global commodities. This has been made acutely relevant during the lobal energy crisis triggered by the Russia–Ukraine war. However, not all energy needs can be satisfied with current electrification technologies and countries will need to resort to hydrogen to meet their requirements.
Hydrogen is a versatile energy carrier but it is difficult to handle and transport. Gaseous hydrogen trade will be regional, being most cost effective for local consumption and delivery by pipelines. Trading internationally by ship often requires the costly and inefficient process of converting hydrogen to a erivative fuel and then reconverting it at the destination. Only the lowest-cost hydrogen can undergo that process and still be cost-competitive with locally-produced hydrogen. However, hydrogen derivative fuels, like ammonia and methanol for shipping and kerosene for aviation, are easier to transport and will become global commodities.
Major demand centres, such as Europe, Japan and South Korea, will not be able to meet all of their demand at competitive costs due to several factors, including limited renewable resources and the lack of low-cost space for infrastructure development. These countries will need to import hydrogen to meet their decarbonisation targets cost-effectively. This presents an economic opportunity for hydrogen exporters who have a new market to sell into. In this report we explore how global hydrogen trade is projected to develop, where Indonesia is positioned within it and how it compares against its regional

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