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Indonesia and Australia collaborate to produce net-zero steel
Leading Indonesian steel company PT Gunung Raja Paksi Tbk (GRP), a member of the Gunung Steel Group, is further solidifying its transformation toward a greener and more inclusive future.
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eading Indonesian steel company PT Gunung Raja Paksi Tbk (GRP), a member of the Gunung Steel Group, is further solidifying its transformation toward a greener and more inclusive future. By implementing Australian technology in its production facilities, GRP plans to reduce carbon emissions in the steel industry by transitioning from natural gas to environmentally friendly hydrogen. This initiative is supported by the governments of Indonesia and Australia through a technical feasibility study conducted by Katalis, a bilateral business development program formed by both governments.
If this project comes to fruition, GRP will replace the use of natural gas at its factory in Cikarang, West Java, with environmentally friendly hydrogen produced by Australian clean energy company Fortescue.
"The transition to an environmentally friendly economy requires joint efforts between businesses to collaborate, innovate and invest. Katalis is proud to support a technical feasibility study that will impact the feasibility of emission-free iron and steel production and, at the same time, advance economic partnerships and market integration between Indonesia and Australia," Paul Bartlett, director of Katalis, said.
The technical feasibility study is outlined in a memorandum of understanding (MOU) between GRP and Fortescue, signed at the B20 Summit in Bali in November 2022. According to the MOU, both parties agreed to explore the role of environmentally friendly hydrogen and ammonia supplied by Fortescue as part of decarbonization efforts at GRP's steel factories, as well as off-take opportunities.
This MOU and the technical feasibility study can help GRP achieve its goal of complete carbon emission reduction by 2030 and carbon neutrality by 2050.
"Decarbonizing steel production aligns with our commitment to achieving net zero and creating regional competitive advantages. Katalis' support for a technical feasibility study to leverage environmentally friendly hydrogen in our West Java factory will greatly encourage innovation and new commercial models," GRP executive committee member Kimin Tanoto said.
Gas energy is a crucial component of the steel production process. In the future, GRP and Fortescue will explore opportunities to develop environmentally friendly hydrogen facilities at the GRP steel factory in Cikarang, which covers an area of over 200 hectares. The hydrogen produced at the factory is slated to replace the natural gas currently used in downstream processes, ensuring sustainable efficiency in steel production.
With technical input from Fortescue, the Katalis-funded technical feasibility study will analyze the potential replacement of carbon-emitting natural gas combustion in GRP's stationary steel manufacturing operations with environmentally friendly hydrogen gas.
"Fortescue is leading global developments in electrification, hydrogen and environmentally friendly technologies to help the world move away from fossil fuels. We encourage other companies to join in the fight against climate change. We welcome Katalis' support in realizing this collaboration with PT Gunung Raja Paksi Tbk and hope to assist Indonesia in developing and implementing environmentally friendly technologies in the steel industry," said Eva Hanly, President of Fortescue Energy in the Asia-Pacific region.
The technical feasibility study is expected to be completed by December 2023.
