Indonesia, a major player in the global steel industry, is taking a pioneering step towards a greener future. Steel production is a critical sector for the nation’s economy, but it also comes with a hefty carbon footprint. Recognizing this challenge, Indonesia is actively exploring the potential of hydrogen steel combustion – a revolutionary technology that promises to decarbonize steel manufacturing.

The Need for Change: Why Hydrogen?

Conventional steel production relies heavily on fossil fuels, particularly coal and natural gas, for heating furnaces. This process releases significant amounts of carbon dioxide, a major greenhouse gas contributing to climate change. Indonesia, with its ambitious climate goals, is seeking ways to reduce its carbon footprint across industries. Hydrogen steel combustion offers a promising solution. Hydrogen, when burned, produces only water vapor as a byproduct, eliminating greenhouse gas emissions.

  • Green Hydrogen: Electrolysis, powered by renewable energy sources like solar or wind, splits water molecules into hydrogen and oxygen. This “green hydrogen” is then used in the steelmaking process.
  • Replacing Fossil Fuels: Green hydrogen can replace fossil fuels in various stages of steel production, including furnace heating and direct reduction (DR) processes.

The Indonesian Landscape: Progress and Partnerships

Indonesia has a renewable energy potential of about 3,700 gigawatts, but only 12.54 gigawatts have been utilized. The country is considering hydrogen as a key part of its shift from fossil fuels to clean energy. Indonesia’s industrial sector consumes about 1.75 million tons of hydrogen annually, mainly for urea (88%), ammonia (4%), and oil refineries (2%).

The government aims to achieve zero carbon emissions by 2060, reducing CO2 emissions by 93% from 1,927.4 million tons to 129.4 million tons. Hydrogen will play a crucial role in this plan, especially in decarbonizing transportation by 2031-2035 and replacing natural gas by 2041-2050.

The International Energy Agency (IEA) estimates that Indonesia will need to triple its investment in clean energy by 2030, requiring an additional US$8 billion per year. Indonesia is making significant strides in exploring hydrogen steel combustion. Here are some key developments:

  • Pioneering Partnerships: A leading example is the collaboration between the Indonesian steelmaker, and Australian mining giant. This partnership focuses on a feasibility study for using green hydrogen produced on-site steel facilities in Indonesia, potentially replacing natural gas in their steel manufacturing process. 
  • Government Backing: The Indonesian government is actively supporting this initiative. Katalis, a government-backed business development program. This involvement signifies a strong commitment to decarbonizing the steel industry.
  • Research and Development: Research institutions and universities in Indonesia are actively exploring hydrogen technology for various applications, including steel production. This focus on R&D is crucial for further development and refinement of the technology.


Challenges and Opportunities

While the potential of hydrogen steel combustion is exciting, there are challenges to overcome. One significant challenge is the cost factor. Currently, producing green hydrogen is more expensive than traditional fossil fuels, necessitating technological advancements and large-scale implementation to bring down the cost. Additionally, infrastructure development is crucial, as a robust infrastructure for producing, transporting, and storing hydrogen is necessary for widespread adoption. This requires significant investment in pipeline networks and storage facilities. Furthermore, supportive government policies and regulations are essential to incentivize the transition to hydrogen steel production, potentially involving subsidies, carbon pricing schemes, and streamlined permitting processes.

The Road Ahead: A Brighter, Greener Future for Indonesian Steel

Despite the challenges, the potential benefits of hydrogen steel combustion are undeniable.

  • Reduced Carbon Footprint: By adopting hydrogen steel combustion, Indonesia can significantly reduce its carbon emissions from the steel sector, contributing to its climate goals.
  • Enhanced Competitiveness: Steel produced through a clean process like hydrogen combustion could command a premium in the global market, giving Indonesian steelmakers a competitive edge.
  • Sustainable Growth: The transition to hydrogen presents an opportunity for Indonesia to become a leader in sustainable steel production, attracting investment and fostering innovation in the sector.


Indonesia is at the forefront of exploring hydrogen steel combustion technology. The collaborative efforts between industry leaders, research institutions, and the government demonstrate a strong commitment to decarbonizing the steel sector. While challenges exist, the potential benefits for the environment, competitiveness, and sustainable growth are significant. As Indonesia continues to forge ahead, it paves the way for a greener future for the global steel industry.