Written by: Joshua Seto Aji & Hasna Amany Aulia
Designed by: Natasha Jayadi
Considering the worsening global climate conditions and environmental damage caused by excessive exploitation, the United Nations has set a target to achieve “zero carbon emissions” by 2050. This initiative encourages many industries on a global scale to play a role and participate in transforming their operations to become environmentally friendly (sustainable), including in Indonesia. As a member of the UN, Indonesia is also encouraging its industrial sector to shift towards sustainable practices. One of Indonesia’s efforts to support “zero carbon emissions” is through the production of “Green Hydrogen.”
Hydrogen is one of the essential elements in industry, especially in the agricultural sector, ammonia production, methanol production, and also energy generation. Hydrogen production is carried out through electrolysis, which involves breaking down water (H2O) into hydrogen (H2) and oxygen (O2) using electricity. The hydrogen produced is then used as the main raw material in the production of ammonia and methanol. However, this electrolysis process still relies on electricity generated from fossil fuels, such as petroleum, which can still cause negative impacts for the environment.
Green hydrogen then emerges as an alternative, which is also created through an electrolysis process, but using electricity originating from renewable energy sources such as solar, wind, and hydro, making it more environmentally friendly and supports sustainability. The production of green hydrogen itself creates numerous opportunities to make better use of existing resources while supporting the transformation of industries toward more sustainable practices. Green hydrogen offers benefits such as reducing carbon emissions from the electrolysis process and minimizing negative environmental impacts, ensuring that large-scale hydrogen production will not harm the environment.
Globally, green hydrogen has captured the attention of giant industries. Many world-class companies have started “testing the waters” with green hydrogen production. One example is Plug Power Inc., a large company from the United States specializing in hydrogen fuel cells, hydrogen generation, and storage. Since January of this year, Plug Power Inc. has been operating eight 5 MW electrolysis systems at its Georgia Plant in the US. They produce up to 15 tons of liquid green hydrogen daily, which is then used by Walmart and Amazon. Plug Power Inc. has also partnered with Amazon and has produced over 17,000 fuel cells to replace battery-powered forklifts (Blackridge). Other giant companies such as FuelCell Energy Inc. in South Korea, Bloom Energy Corp. in the US, and Adani Green Energy Ltd. in India have also begun large-scale green hydrogen production. According to its official website, Adani Green Energy Ltd. states that producing green hydrogen not only drives India’s energy transition away from fossil fuels but also frees India from financial losses due to energy imports. Thus, the potential of green hydrogen as a sustainable and environmentally friendly energy source is increasingly being realized on a global scale.
Regarding the implementation of green hydrogen in Indonesia, according to the Secretary General of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, Indonesia has the potential to produce up to 1.75 million tons of green hydrogen per year, aligned with efforts to downstream the gas sector as a raw material for fertilizer and clean energy. The President Director of PLN, Darmawan Prasodjo, stated that PLN will ensure a reliable and sustainable electricity supply to support the development of green hydrogen and green ammonia, including providing electricity needs of up to 340 MVA and renewable energy certificates for producers. The Chairman and CEO of Augustus Global Investment (AGI), Fadi Krikor, believes that the prospects for green hydrogen in Indonesia are highly promising, if balanced with government commitment, access to renewable energy, and economic and political stability. AGI itself plans to build a green hydrogen plant with a capacity of 35,000 tons per year, with an investment of 400–700 million USD.
To implement green hydrogen successfully, a new and robust accounting information system is essential to support decision making. Supporting technologies, such as the use of appropriate computer programs or accounting software, also enhance the company’s effectiveness. Through various types of modern accounting, such as green accounting and carbon accounting, companies can monitor their carbon-related activities. This allows for a comparison of the company’s effectiveness after utilizing green hydrogen and facilitates the reporting of changes in a structured and well-organized manner to relevant stakeholders. For example, Plug Power Inc. has experienced increasing revenue due to its implementation of green hydrogen, with significant growth in electrolyzer sales, expanded hydrogen production, and a projected 70% revenue increase by 2030, despite facing financial challenges.
In Addition, by analyzing data and calculations in green or carbon accounting, management can make predictions regarding the entire process and development of the project in the long term. Other than that, through the reports generated, companies can also enhance their reputation and demonstrate their support and participation in environmentally beneficial initiatives, potentially attracting investors to invest in their business. Thus, by incorporating evaluations from an accounting perspective it becomes possible to assess whether the production of green hydrogen aligns with the company’s objectives of serving society and the environment while also seeking profit.
References:
Top 10 green hydrogen producing companies in the world. (n.d.). https://www.blackridgeresearch.com/blog/list-of-top-green-hydrogen-producing-companies-in-the-world
Plug Power Starts Production of Liquid Green Hydrogen at its Georgia Plant. https://www.ir.plugpower.com/press-releases/news-details/2024/Plug-Power-Starts-Production-of-Liquid-Green-Hydrogen-at-its-Georgia-Plant/default.aspx
Green hydrogen holds strong promise for India’s energy self-reliance. https://www.adani.com/en/blogs/green-hydrogen-holds-strong-promise-for-india-energy-self-reliance
Bagaskara. (2023, October 12). Mengenal Apa itu Green Hydrogen: Manfaat dan Keuntungan. Mutu International. https://mutucertification.com/manfaat-keuntungan-green-hydrogen/
Amelia, C. (2022, November 13). Apa itu green hydrogen? energi masa depan dunia. https://economy.okezone.com/. https://economy.okezone.com/read/2022/11/13/320/2706567/apa-itu-green-hydrogen-energi-masa-depan-dunia
Kementerian ESDM dukung pengembangan hidrogen hijau. (n.d.). ESDM. https://www.esdm.go.id/en/media-center/news-archives/kementerian-esdm-dukung-pengembangan-hidrogen-hijau
Du, L., Yang, Y., Zhou, L., & Liu, M. (2024). Greenhouse gas Reduction Potential and Economics of green hydrogen via water electrolysis: A Systematic Review of Value-Chain-Wide Decarbonization. Sustainability, 16(11), 4602. https://doi.org/10.3390/su16114602
