NET ZERO EMISSION: SCENARIO PLANNING OF INDONESIAN OIL AND GAS INDUSTRY FINAL PROJECT In partial fulfilment of the requirements for the master’s degree from Institut Teknologi Bandung By AHMAD FAISAL SIREGAR Student ID: 29321121 (Master of Business Administration Program) INSTITUT TEKNOLOGI BANDUNG September 2023 i ABSTRACT NET ZERO EMISSION: SCENARIO PLANNING OF INDONESIAN OIL AND GAS INDUSTRY By AHMAD FAISAL SIREGAR Student ID: 29321121 (Master of Business Administration Program) In 2015, at a conference under the Council of the United Nations Framework Convention on Climate Change (UNFFC) COP 21 Paris, an agreement was produced, hereinafter referred to as the Paris Agreement. This agreement focuses on overcoming global climate problems, namely trying to limit global temperature rise to a minimum of 1.5 degrees Celsius, and below 2 degrees Celsius for pre- industrial levels. Through Law Number 16 year 2016, the Paris Agreement was ratified by Indonesia. Furthermore, several targets and documents have been announced as part of Indonesia's commitment to reducing carbon emissions. In the Enhance National Determined Contribution (ENDC) document submitted by the Government in September 2022, the target is to become an emission-free country in 2060 or sooner, with an emission reduction of 31.89% with its own efforts, and a target of 43.20% with international support. There are several sectors that are a priority in reducing greenhouse gas emissions, one of which is the energy sector. The research aims to see how the application of net zero emissions, specifically in the oil and gas industry as one of the energy sub-sectors. In order to get an accurate picture of the implementation of the net zero emission policy, the author used the scenario planning framework method. Scenarios were developed from interviews with several stakeholders in the Indonesian oil and gas industry. In addition, several analyses, both external and internal, were carried out to support scenario planning. At the end there is an implementation plan built to deal with the various scenarios that will occur. Keywords: Indonesia, oil and gas, emission reduction, policy, scenario planning, ii ABSTRAK NET ZERO EMISSION: SCENARIO PLANNING INDUSTRI MINYAK DAN GAS INDONESIA Oleh Ahmad Faisal Siregar Student ID: 29321121 (Program Studi Magister Administrasi Bisnis) Pada tahun 2015, dalam sebuah konferensi dibawah Dewan United Nations Framework Convention on Climate Change (UNFFC) COP 21 Paris dihasilkan sebuah perjanjian yang selanjutnya disebut dengan Perjanjian Paris. Perjanjian ini berfokus pada penanggulangan permasalahan iklim global yaitu berupaya membatasi kenaikan suhu global sampai diangka minimum 1.5 derajat Celcius, dan dibawah 2 derajat Celcuis untuk tingkat pra industry. Indonesia telah meratifikasi Paris Agreement melalui Undang-undang Nomor 16 Tahunb 2016. Selanjutnya beberapa target dan document telah dicanangkan sebagai bentuk komitment Indonesia dalan pengurangan emisi karbon. Dalam document Enhance National Determined Contribution (ENDC) yang disampaikan oleh Pemerintah pada September 2022, menargetkan pada tahun 2060 atau lebih cepat sebagai negara yang bebas emisi, dengan target penurunan emisi sebesar 31.89 % dengan usaha sendiri, dan target 43.20% dengan dukungan internasional. L Terdapat beberapa sektor yang menjadi prioritas dalam penurunan emisi gas rumah kaca, salah satunya adalah sektor energi. Penelitian bertujuan melihat bagaimana penerapan net zero emission secara khusus pada industri minyak dan gas sebagai salah satu sub sector energi. Pendekatan dengan metoda scenario planning framework digunakan oleh penulis, hal ini dilakukan agar gambaran yang akurat mengenai penerapan kebijakan net zero emission didapatkan. Scenario dikembangkan dari wawancara dengan beberapa pemangku penetingan dalam industri minyak dan gas Indonesia. Selain itu dilakuklan beberapa analisa, external dan internal, untuk mendukung pembuatan scenario planning. Di bagian akhir terdapat rencana implementasi dibangun untuk menghadapai berbagai scenario yang akan terjadi. Keywords: Indonesia, minyak dan gas, penurunan emisi, kebijikan, perencanaan skenario, iii iv FINAL PROJECT GUIDANCE Unpublished masters’ thesis is registered and available in the Library of Bandung Institut of Technology, and is open for public, provided that the author owns the copyright in accordance with the intellectual property rights that are applicable in the Library of Institut Teknologi Bandung. Bibliographical references are allowed to be use in a limited manner, however the citation and summarization can only be proceed upon the author’s permission and must include the scientific norm of stating this thesis as the source. This thesis has to be cited as: Siregar, A.F. (2023): Net Zero Emission: Scenario Planning of Indonesian Oil and Gas Industry, Masters’ Final Project, Institut Teknologi Bandung. Reproduction or publication of parts or whole of the thesis must be under the consent of the Head of Graduate School, Bandung Institute of Technology. v DECLARATIONPAGE This thesis is dedicated to parents, wife, children, brothers and sisters, father-in- law and my beloved family who always support me. vi ACKNOWLEDGEMENTS Jakarta, June 2023 Ahmad Faisal Siregar I would express my gratitude to Allah Subhana Wa Taala, the most gracious and most merciful that I am able to continue my study journey and completed the final project as part of master’s degree requirement in Business Leader Magister Business Administration Program. With great gratitude, I would like to extend my sincere thanks and appreciation to my final project counsellor Bapak Yos Sunitiyoso M.Eng.,Ph.D for guidance, advise and input during the final project. I would like to thanks to all interviewees for valuable input and insightful discussion. On this wonderful journey, I would like to thanks to the lectures for all the knowledge, sharing, and insightful experiences, SBM ITB Jakarta Campus Staffs for supports, and BLEMBA 30 friends. Last but not least, I would like to thanks to my parents, my wife, my sons, and big family for all love, and supports. xii LIST OF ABBREVIATIONS AND SYMBOLS ABREVIATIONS Name Page of initial usage AFOLU Agriculture, Forestry and Other Land Use Bappenas Badan Perancanan Pembangunan Nasional (National Development Planning Agency) BAU Business as usual CCS/CCUS Carbon capture and storage / Carbon capture, usage, and storage COP Conference of the Parties GDP Gross domestic product GHS Globally Harmonized System GHG Greenhouse Gases HEESI Handbook of Energy and Economic Statistic of Indonesia ICCSR Indonesia Climate Change Sectoral Roadmap IEA International Energy Agency IPCC Intergovernmental Panel on Climate Change LDCI Low Carbon Development Indonesia LTS-LCCR Long-Term Strategy on Low Carbon and Climate Resilience LULUC land use and land-use changes MEF Ministry of Environment and Forestry MEMR Ministry of Energy and Mineral Resources Mtoe Millions of tonnes of oil equivalent (Mtoe) NDC Nationally Determined Contributions NZE Net Zero Emission PSC Production Sharing Contract RAN-GRK Rencana Aksi Nasional – Gas Rumah Kaca / National Action Plan on Greenhouse Gas Emission Reduction RPJMN Rencana Pembangunan Jangka Menengah Nasional / National Medium-Term Development Plan RPJPN Rencana Pembangunan Jangka Panjang Nasional / National Long-Term Development Plan UNEP United Nations Environment Programme UNFCCC United Nations Framework Conventions on Climate Change UKPPPP Unit Kerja Presiden Bidang Pengawasan dan Pengendalian Pembangunan / Presidential Working Unit for Supervision and Management Development WMO World Meteorological Organization.