Jakarta. PT Chandra Asri Pacific Tbk (Chandra Asri Group) recently inked a memorandum of understanding (MoU) with state-owned water firm Perum Jasa Tirta II (PJT II) for a partnership related to green energy.

Under this MoU, both parties agree to conduct a feasibility study on green energy potential through the development of solar power plants and hydropower plants. These plants will go into powering Chandra Asri Group’s chlor-alkali and ethylene dichloride (CA-EDC) which is currently under construction. This plant requires 340 megawatts of electricity. The study also seeks to promote the use of new renewable energy and support Indonesia’s goal of reaching net zero emissions by 2060.

PJT II is responsible for providing water for communities and industries in West Java and Jakarta. The company also manages the Jatiluhur Dam in Purwakarta and the Karian Dam in Lebak, Banten. In addition to power plants, this study will also explore the potential development of clean water supply systems in collaboration with Chandra Asri Group.

"The collaboration between Chandra Asri Group and PJT II is crucial in supporting the development and operation of the CA-EDC plant, designed as a facility that implements green energy. As a ‘Growth Partner for Indonesia’, this feasibility study is also expected to create new business opportunities in the development of new renewable energy for sustainability," Edi Riva’i, the director of legal, external affairs, and circular economy at Chandra Asri Group was quoted as saying in a recent press statement.

Chandra Asri Group is currently developing the CA-EDC Plant, which will have a production capacity of over 400,000 tons of caustic soda and over 500,000 tons of Ethylene Dichloride per year. This plant plays a crucial role in fulfilling the increasing demand for caustic soda and ethylene dichloride products not only in Indonesia but also in Southeast Asia. Its initial operations will require an electricity supply of 140 megawatts. These electricity needs will increase to 200 megawatts in 2026, bringing the total required electricity capacity to 340 megawatts.

PJT II’s business development director Dikdik Permadi Yoffana also commented on the partnership. The government has tasked PJT II to manage the Citarum Watershed, parts of Ciliwung-Cisadane, Cimanuk-Cisanggarung, Cidanau-Ciujung-Cidurian, and Seputih-Sekampung, 

“This undoubtedly has significant potential in the development of new renewable energy sources to support a net zero emission by 2060. We can partner with private entities such as Chandra Asri Group to support the use of environmentally friendly energy in the production process. Therefore, this collaboration plan represents a strategic step for both parties,” Dikdik said.

Caustic soda is a mainstay raw material for various industries in Indonesia, including alumina extraction, nickel extraction, water treatment, textile production, paper production, soap, and detergent production. Ethylene dichloride is a crucial component in the production of polyvinyl chloride (PVC), which has various applications in construction and packaging. 

The construction of the CA-EDC plant could serve as a catalyst for Indonesia's ambition to play a role in the global supply chain of electric vehicles, where the demand for caustic soda continues to increase alongside the growing adoption of electric vehicles worldwide, according to Chandra Asri.