Mitsui’s Activities in Carbon Solution

Ihsanul Afdi Yunaz

Director
PT Mitsui Indonesia

Prepared for: OJK National Seminar

Medan, 4-5th September 2023
 About Mitsui & Co

Mitsui & Co. is one of the largest global trading and investment companies with a robust international
network spanning 63 countries/regions and a diversified business portfolio.
Core businesses in :
[Energy] [Mineral & Metal Resource] [Infrastructure] [Mobility] [Basic & Performance Material] [Nutrition &
Agriculture] [Iron & Steel] [Food] [Retail] [wellness] [IT & communication] [Corporate Development]

The overall strategy responds to the increasing global urgency for sustainability, focusing on creating an eco-
friendly society, improving living standards and providing a sustainable supply of essential products.

Total Office Affiliated Company

Profit for the year:

USD 8.4 billion 128 offices 513

companies
(As of Mar 31, 2023) (As of Apr 1, 2023)
(As of Mar 31, 2023)

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 Mitsui’s Major Projects in Indonesia

Doing Business in Indonesia Invest in Investment, Loan, & Guarantee

Since
1901 35 companies
/ projects USD 2.87 billion
*Legally speaking, there has been no continuation (As of Oct, 2022) (As of Mar, 2023)
between the former and the current Mitsui & Co.

Infrastructure & Energy Innovation & Corp. Development Food & Retail
1. PT. Paiton Energy 1. PT Graha Teknologi Nusantara 1. PT. ABC Kogen Dairy (“KIN” Fresh
2. New Priok Container Terminal 1 (NPCT 1) 2. Toko Pandai Milk & Yogurt)
3. Tangguh LNG Project in West Papua
2. PT Raffles Pasific Harvest (Dairy
4. Sakakemang PSC Healthcare & Real Estate Farm)
5. MRT Jakarta
1. PT SLP Surya Ticon Internusa 3. PT FKS Management Services
6. Xurya Daya Indonesia
2. PT PHC Indonesia (grains, oilseeds, soybean)
Mobility 4. Strategic alliance partnership with
Chemicals CT Corp
1. PT. Yamaha Indonesia Motor Manufacturing
2. PT. Bussan Auto Finance (BAF) 1. PT Standar Toyo Polymer
2. PT Kingsford Holding Indonesia
Steel Product
1. PT MICS Steel Indonesia
2. PT Pelat Timah Nusantara Tbk

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 Mitsui’s Path to Green Transformation
We “Create an eco-friendly society“ by exerting our integrated strengths, maintaining cohesiveness,
and taking up next-generation business initiatives​ to achieve net-zero emissions as our Vision for 2050.

Mitsui’s Target for GHG Reduction

GHG Renewable
Impact Energy Ratio
Emission

Reduction
FY
Mar/2020
34 14%
Mill tons
Absorption &
Offset Vol. FY
Mar/2026
27 27%
Reduction Contribution Mill tons
Opportunity &
Transition*

Net Zero 2030 17 30+%

Mill tons
Emission
❖ GHG Impact: Amount of emission minus the
reduction contribution amount achieved
*transition assumes only reduction contribution through biz activities
attributable to the company in the future ❖ Increase renewable energy (RNE) ratio in
power generation biz to over 30% by 2030

We are the first Japanese trading company to have set a new goal, which is to achieve “net-zero emissions” by 2050.
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 Mitsui’s Path to Green Transformation
❖We promote emission reduction (Reduction) and reduction contribution (Opportunity & Transition) in a
variety of ways, taking advantage of the cross-industrial business structure that only a sogo shosha
(“General Trading Company”) can offer.

RE/
RE/Energy
Electrificat
Biz
ion

Energy
Fuel Next-gen
saving/ LNG Biz
Switching fuel Biz
efficiency Reduction
Reduction
Contribution
Reduce Emission from
(Opportunity & Transition)
our businesses
Contribute to reduction
(absorption/offset
of global emissions
volume included) Hydrogen
Asset Absorption through our business Forestry
/Ammonia
recycling /recovery Biz
Biz

Offsetting
(Emission CCUS Biz
credits)

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 Energy Business Strategy

Energy demand increasing

along with economic and population growth

“Dual Challenge”
MORE CLEANER
energy energy

Oil & Gas E&P LNG Portfolio Renewable Energy

Oil Trading & Hydrogen
Coal Trading LNG Trading Power related Biz
Carbon Solution
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 Mitsui in Carbon Market
❖ Mitsui is in the carbon market since 2000 (the early days of the market) with experience in developing
projects & trading carbon credits.
❖ Trading Desk in Singapore started voluntary market Carbon Trading in FY22 & since then have traded 1.5
mil tons till date.

Past Projects On-Going Projects

Kyoto Protocol Period (2008-2012) (Post Kyoto Protocol (2013~)
Country Project Type Mitsui’s Role Country Project Type Scheme Mitsui’s Role
Mexico/ Renewable CDM project development, JCM development, finance
Cambodia REDD+ JCM
Brazil Project investment & marketing & carbon credit offtake
Swine CDM project development, Wood Biomass Investment, J-Credit
Indonesia Japan J-Credits
Methane investment & marketing Cogeneration development & marketing

CDM development & Biogas for Project development,

India, China N2O USA (California) LCFS
offtake transportation investment & trading
EU, Japan, & others Trade EUA, J-Credit, & others Trade Carbon Credit

Mitsui’s Stake at Invested Company Mitsui Current Focus

33.7% 49%
Climate Friendly New Forest Develop projects Carbon Credit Trading
Pty. Ltd. Pty Ltd. under other CO2 (have set up trading
Facilitating carbon farming projects to generate Nature-Based Real Assets Investment reduction scheme desk in Singapore).
land sector Australian Carbon Credit Units. Management, based in Australia
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Mitsui in Carbon Market – Activity

(1) Emission Reduction Project: Cambodia/Prey Lang REDD+ Project

Overview
❖ Avoid deforestation, protects, and conserves Cambodia’s Prey Lang forest by
reinforcing forest patrols to prevent illegal logging.
❖ Provide local communities with alternative sources of livelihood to avoid reliance
on logging.

Partner Location
❖ Ministry of Environment, Cambodia ❖ Northeast of Cambodia along west
❖ Conservational International (NGO) bank of the Mekong River

Credit Type

❖ JCM (Joint Crediting Mechanism)*

Schedule

2018 2023 2023

• Start of • JCM • Issuance Avoid deforestation
Project Registration of JCM
Credit
*JCM is a greenhouse gas reduction scheme established by
8 the Japanese government in line with the UNFCCC rules.
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Mitsui in Carbon Market – Activity

(2) Carbon Credits Transaction: Carbon Neutral LNG Supply to Hokkaido Gas

In Mar/2021, Mitsui supplied carbon

LNG + Carbon Credit
neutral LNG to Hokkaido Gas based
Hokkaido
on the long-term LNG Sales and Gas
Purchase Agreement concluded in
Oct/2017 between the 2 companies.

Life Cycle Basis

Carbon offset is being done on a life cycle basis
Including feed gas production, liquefaction and combustion by using the
carbon credits

Carbon Credit Source

International Forest Conservation Project

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Mitsui in Carbon Market – Activity

(3) CCUS Project: Joint Study Agreement with Pertamina in Central Sumatra

Overview
❖ Signed a Joint F/S agreement with PT. Pertamina (Persero) in April 2022 Rokan Block

Purpose Rokan Block

❖ Examine potential commercialization towards the establishment of a CCUS

value chain in Asia Pacific region by developing CO2 storage sites in
Central Sumatra, Indonesia.
Scope of F/S
❖ Evaluate CO2 storage capacity
❖ Identify potential CO2 emission sources (i.e., Indonesia, ASEAN, East Asia)
❖ Design & Establish CCUS biz model for project commercialization

Central Sumatra

❖One of the largest onshore oil and gas

Photo: Online Signing Ceremony
April 2022
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blocks in Indonesia
❖Contains 70+ fields (i.e., Duri & Minas oil
fields)
❖Abundant technical data & existing
10 infrastructures (pipelines, etc.)
 Mitsui Future Intention on Carbon Solution in Indonesia

Contribute & Develop GHG emissions reduction projects (e.g.,

Forestry) by JCM Scheme or other schemes

Offtake/Marketing Carbon Credit from REDD+, Renewable

Energy Project, and other emissions reduction projects

Develop Carbon Capture Hub in Depleted Oil & Gas Field for
Industry

Provide Solution for Decarbonization

Mitsui’s
Value
Financing Project Development Carbon Trading

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 Aspiration to Support Decarbonization in Indonesia

Market Transparency
Carbon trading platform provides market condition, allowance prices, and trading volume. It
enhances market efficiency and assist traders in making informed decisions.

Carbon Pricing Target

Establish competitive carbon pricing with defined price development target and timeline could
motivate businesses to reduce emissions and invest in sustainable practices.

Investment Incentives
Clear allocation of carbon credit for investor to be traded globally could significantly attract foreign
investors contributing to Indonesia’s NDC goals.

Ease of doing Business

Determine clear business license (i.e., carbon credit trader) & crediting scheme selection flexibility
for decarbonization project.

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