Shell Published Report Outlining Plausible Pathways for Indonesia to Achieve Net-Zero Emissions Target by 2060

To successfully make the transition to net-zero emissions by 2060, Indonesia will need to fundamentally transform its energy and land use systems. This is to be done in a way that ensure affordable and secure energy supplies to support the country’s economic growth and development during the transition.

In Indonesia, the energy sector has been identified as the second main contributor of emissions after agriculture, forestry, and other land uses. The plausible pathways to decarbonise Indonesia’s economy and industry outlined in the Indonesia Sketch involve greater adoption and implementation of low-carbon electrons and low-carbon energy solutions such as bioenergy. On bioenergy, biofuels could make up almost 60% of all liquid fuels, to displace large amounts of oil and to support the decarbonisation of hard-to-electrify sectors such as aviation and chemicals.

“Pathways to meet Indonesia’s net-zero emissions target will require significant public and private partnership to realise such aspiration by 2060. For example, developing supplies of second generation and advanced biofuels in the longer term will be essential to minimise impact on food production and the wider natural environment. It will also support the transformation of Indonesia’s land use sector from a net contributor of greenhouse gas emissions to a net-negative source of emissions,” said Dr Mallika Ishwaran, Shell Chief Economist, who spoke at the launch event.

The Indonesia Sketch also sets out the acceleration of electrification, continued improvements in energy efficiency improvements, as well as carbon capture and storage (CCS) as key actions. Deployment of CCS solution will be key to decarbonise the most expensive and hardest-to-abate emissions. This investment in low-carbon energy solutions will also generate economic multiplier effects, which essentially will benefit the economy.

Shell Indonesia President Director and Country Chair, Ingrid Siburian, said, “As a major energy producer and consumer, Indonesia can drive comprehensive decarbonisation efforts to support the country’s sustainable economic development aspiration. As a major investor in the energy sector in the country and in line with our Powering Progress strategy, Shell is committed to be an active partner in Indonesia’s energy transformation journey. The publication of Indonesia Sketch demonstrates Shell’s concrete contribution in the ongoing dialogue regarding the future of energy ecosystem in Indonesia.”

While building a net-zero energy system in Indonesia by 2060 is challenging, Shell believes it is technically possible for Indonesia to achieve its ambitions provided the country acts swiftly with a goal-oriented approach. Other key actions will include phasing down coal-fired power generation, investing in renewable generation, flexibility technologies and electricity infrastructure.

Read the full report at www.shell.co.id/IndonesiaSketch

About Shell Indonesia

Shell in Indonesia manages business in Downstream sector. Our activities include retail fuels business, lubricants, marine, as well as bitumen. Shell is the first international energy company with retail presence in the country with more than 190 operating sites in Greater Jakarta area, West Java, East Java and North Sumatera. Shell owns and operates fuel terminal in Gresik. In Lubricants, Shell provides oil products and related technical support to the industrial, automotive, and transport sectors. In 2015, Shell builds and operates a lubricant oil blending plant (LOBP) in Marunda, Bekasi, with a production capacity of 136 million litres. 

Enquiries

Edit Wahyuningtyas
Corporate Communications - Shell Indonesia
Email: e.wahyuningtyas@shell.com

Cautionary note

Scenarios don’t describe what will happen, or what should happen, rather they explore what could happen. We base them on plausible assumptions and quantification, and they are designed to stretch management’s thinking and even to consider events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes or a strategy. Investors should not rely on them when making an investment decision with regard to Shell plc securities.

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This Indonesia Scenarios Sketch contains data and analysis from Shell’s Sky 1.5 scenario. The Sky 1.5 scenario starts with data from Shell's Sky scenario of 2018, but with important updates. First, the outlook uses the most recent modelling for the impact and recovery from COVID-19 consistent with a Sky 1.5 scenario narrative. Second, it blends this projection into existing Sky energy system data by around 2030. Third, the extensive scale-up of nature-based solutions is brought into the core scenario, which benefits from extensive new modelling of that scale-up. (In 2018, nature-based solutions required to achieve 1.5 degrees Celsius above pre-industrial levels by the end of this century were analysed as a sensitivity to Sky. This analysis was also reviewed and included in the IPCC Special Report on Global Warming of 1.5°C (SR15).) Fourth, our new oil and natural gas supply modelling, with an outlook consistent with the Sky 1.5 narrative and demand is presented for the first time. Fifth, the Sky 1.5 scenario draws on the latest historical data and estimates to 2020 from various sources, particularly the extensive International Energy Agency energy statistics. As with Sky, this scenario assumes that society achieves the 1.5 degree Celsius stretch goal of the Paris Agreement. It stretches development dynamics today to explore a goal-oriented way to achieve that ambition. We worked backwards in designing how this could occur, considering the realities of the situation today and taking into account realistic timescales for change. Of course, there is a range of possible pathways that society could take to achieve the Paris goal. Although achieving the goal and the future depicted in Sky 1.5, while maintaining growth in the global economy, will be extremely challenging, it remains a technically possible pathway.

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