Indonesia boosts clean tech in fertiliser production

The Indonesian government is encouraging the domestic fertiliser industry to develop cleaner technologies for its production processes, Coordinating Minister for Economic Affairs Airlangga Hartarto has said.

According to the minister, the goal of building fertiliser plants is not to develop the petrochemical industry but to increase rice production.

Pupuk Kaltim is a subsidiary of state-owned fertiliser holding company PT Pupuk Indonesia, which is responsible for distributing 9.5 million tonnes of subsidised fertiliser this year, double the original quota.

The government has also added another 7.1 trillion IDR (453 million USD) to the 26.6 trillion IDR fertiliser subsidy budget for this year, which is expected to help ease the shortage.

To improve transparency and efficiency in the distribution of subsidised fertilizer, the Indonesian government is building a digital system to manage the sector.

Pupuk Indonesia will play a role in ensuring eligible farmers have access to subsidised fertiliser. Currently, government subsidies are being invested in production businesses to reduce the cost of fertiliser for farmers.

Fertiliser prices in the Southeast Asian nation have surged since the outset of the Russia-Ukraine conflict in 2022, which has driven up natural gas prices, a key component in the production process of fertiliser.

Indonesia has had to allocate a higher-than-expected budget for fertiliser subsidies. The government still owes Pupuk Indonesia a subsidy amounting to 12.46 trillion IDR that was provided to farmers from 2020 through April this year./.

VNA