ESDM Formulates Incentives for Hydrogen Production

The Ministry of Energy and Mineral Resources (Energi dan Sumber Daya Mineral – “ESDM”) plans to formulate a new regulation to support the hydrogen energy ecosystem. The Coordinator for Business Services and Supervision of New and Renewable Energy (Energi Baru Terbarukan – “EBT”), Muhamad Alhaqurahman Isa, stated that the new regulation will include incentives for hydrogen energy production.

“We have been tasked with formulating a policy that provides incentives for hydrogen production,” said Alhaqurahman.

Alhaqurahman explained that the new regulation may take the form of a Ministerial Regulation or a Ministerial Decree issued by ESDM. Discussions on the incentive scheme are expected to be completed this year. The new scheme is being developed to address the high production costs of green or clean hydrogen, which currently remains less competitive compared to fossil-based grey hydrogen.

“This regulation is being prepared to accelerate the development of the hydrogen ecosystem,” Alhaqurahman added. The acceleration of the hydrogen ecosystem forms part of the National Hydrogen and Ammonia Strategy and Roadmap, which refers to the hydrogen production targets set out in Government Regulation No. 40 of 2025 on the National Energy Policy.