JAKARTA, Indonesia and PERTH, Australia, Nov. 6, 2023 /PRNewswire/ -- Leading private Indonesian steelmaker PT Gunung Raja Paksi Tbk (GRP), a member of Gunung Steel Group, is working towards a greener, more inclusive future, with a plan to reduce carbon emissions from the steel industry by replacing natural gas with green hydrogen produced on site using Australian technology. The Indonesian and Australian governments are backing the initiative, with a technical feasibility study now underway through the government-supported business development program Katalis.

If successful, the plan could see GRP replace natural gas at its plant in Cikarang, West Java, with green hydrogen sourced from Australian green energy company Fortescue.

"Transitioning to a green economy requires a concerted effort across businesses to collaborate, innovate and invest. Katalis is proud to support the technical feasibility study that will inform the viability of producing steel at zero emission and at the same time progressing economic partnership and more integrated markets between Indonesia and Australia," said Paul Bartlett, Katalis Director.

The Technical Feasibility Study was foreshadowed in GRP and Fortescue's memorandum of understanding signed at the B20 summit in Bali in November 2022. Under the MOU, the two parties agreed to investigate how green hydrogen and green ammonia supplied by Fortescue could be used to help decarbonise GRP's steelmaking factories, as well as offtake opportunities. These could aid GRP's ambition to achieve full operational carbon emission reduction in its existing processing plant by 2030 and carbon neutrality by 2050.

"Decarbonising our steel production is in line with our commitment to achieve net zero and will provide us with a competitive regional advantage. Katalis support for the technical feasibility study to pursue the use of green hydrogen at our plant in West Java will go a long way to help Indonesia's steel industry reinvent and pursue new commercial models," said Kimin Tanoto, GRP Member of the Executive Committee.

Steel production is energy intensive, requiring substantial amounts of gas to power production plants.  Long-term, the plan could see the companies working together to develop a green hydrogen plant within GRP's steel manufacturing plant in Cikarang, which spans more than 200 hectares. The green hydrogen produced in this plant would potentially replace the natural gas currently used in GRP's downstreaming process and ensure continued efficiency.

Fortescue is providing technical input into the Katalis-funded study, which will analyse the potential of replacing the burning of carbon-emitting natural gas at GRP's stationary combustion steel manufacturing operations with green hydrogen gas.

"Fortescue is leading the global development of green electrons, green hydrogen and green technology that will help step the world beyond fossil fuels. 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 Eva Hanly, Fortescue Energy President, Asia Pacific.

The study is due to be completed in December 2023.