PT Gunung Raja Paksi Tbk (GRP), the largest private Indonesian steel producer, is embarking on a groundbreaking project to replace natural gas with green hydrogen in its steelmaking operations, supported by both the Indonesian and Australian governments. This ambitious endeavor aims to significantly reduce carbon emissions from the environmentally impactful steel industry. Currently, a feasibility study is underway through the government-backed business development program, Katalis. The study will examine the viability of utilizing on-site green hydrogen, produced with Australian technology, as a substitute for natural gas at GRP’s Cikarang plant in West Java.
In the future, this project holds immense potential for GRP, enabling it to replace natural gas with green hydrogen sourced from Fortescue, a leading Australian renewable energy company. This transition would not only reduce GRP’s carbon footprint but also position the company as a frontrunner in the pursuit of green steel production.
Collaboration and Innovation Drive the Green Hydrogen Initiative
This project holds immense potential for GRP, enabling them to replace natural gas with green hydrogen sourced from Fortescue, a leading Australian renewable energy company, reducing their carbon footprint and positioning them as a frontrunner in green steel production.
Katalis Director Paul Bartlett emphasized the importance of collaboration and innovation in achieving a green economy, stating, “Katalis is proud to support the technical feasibility study, which will inform the viability of producing steel at zero emission and foster economic partnership and more integrated markets between Indonesia and Australia.”
The technical feasibility study is not the first step in this green hydrogen journey. GRP and Fortescue signed a memorandum of understanding (MOU) at the B20 summit in Bali in November 2022, focusing on a 75% carbon intensity reduction through green power sourcing and the potential of green hydrogen and green ammonia supplied by Fortescue in decarbonizing GRP’s steelmaking facilities.
Kimin Tanoto, a member of the Executive Committee at GRP, conveyed the company’s dedication to decarbonization and the exploration of fresh business models, positioning them favorably in the regional market and contributing to the revitalization and innovation of the Indonesian steel industry.
Long-Term Vision: A Green Hydrogen Plant at GRP
The long-term vision for this initiative extends beyond the technical feasibility study. GRP and Fortescue envision a future where they collaborate to establish a green hydrogen plant within GRP’s Cikarang steel manufacturing complex. This expansive facility would serve as the source of green hydrogen for GRP’s downstreaming process, ensuring continued efficiency while significantly reducing carbon emissions.
Fortescue reaffirmed the company’s commitment to green technology and its desire to collaborate with other companies to combat climate change. “We want other companies to join us to combat climate change. We welcome the support of Katalis to enable the collaboration with PT Gunung Raja Paksi Tbk and look forward to helping Indonesia develop and deploy green technology in the steel industry.” said Fortescue Energy President for Asia Pacific, Eva Hanly.
With the technical feasibility study scheduled for completion in December 2023, GRP, Fortescue and Katalis are poised to make significant strides in decarbonizing the steel industry. In their relentless pursuit of a greener, more sustainable future, strategic initiatives and collaborative endeavors underscore the critical significance of aligning efforts across various sectors and industries.
