Pupuk Kaltim's 1984 ammonia plant now uses 10 percent less energy and makes more ammonia

One of Indonesia's older ammonia plants has just become one of its more efficient ones. On 6 October 2026, PT Pupuk Kalimantan Timur (Pupuk Kaltim) and Swiss technology licensor Casale SA signed a joint declaration in Lugano, Switzerland, formally confirming the results of the revamp of Ammonia Pabrik-2 in Bontang, East Kalimantan. The plant, in operation since 1984, now needs about 10 percent less energy for every tonne of ammonia while producing more of it.

The declaration was signed by Teguh Ismartono, Director of Operations at Pupuk Kaltim, and Federico Zardi, Chief Executive Officer of Casale. It closes the contractual loop on a modernisation that began in January 2026 and passed its performance test in August.

What the revamp achieved

The headline number is energy intensity. Before the revamp, Ammonia Pabrik-2 consumed 39.28 MMBTU of energy per tonne of ammonia. After it, the figure is 35.25 MMBTU per tonne. That is a reduction of 4.03 MMBTU per tonne, slightly ahead of the minimum guaranteed improvement of 4.00 MMBTU.

Output rose at the same time. Daily ammonia production increased from 1,767 tonnes to 1,841 tonnes, a gain of 4.18 percent. Lower energy per tonne and more tonnes per day is the combination every plant manager looks for, and it is rarely achieved without building new capacity.

The results were established during a 168 hour performance test, run continuously over seven days in August 2026. Reporting from August dates the test to 13 to 19 August.

The plant that has operated since 1984 now uses less energy and produces more ammonia.

That summary, from Pupuk Kaltim President Director Rafli Yandra as quoted by Medcom, captures why this project matters well beyond one site.

The numbers in money and carbon

Pupuk Kaltim projects the efficiency gain will lower production costs by about USD 14.3 million a year, equivalent to roughly Rp228 billion. Because natural gas is both the fuel and the feedstock for ammonia, every MMBTU saved shows up directly on the gas bill.

The carbon side is equally concrete. The company estimates the revamp will reduce emissions by about 110,000 tonnes of CO2 a year. That reduction comes from an asset that already exists, with no new land, no new grid connection and no change to the product.

Rafli Yandra linked the result to the company's core mission. Quoted by Jawa Pos, he said that lower daily production costs and a more reliable supply of ammonia as urea feedstock allow Pupuk Kaltim to maintain strong production in support of national food security. Speaking to Republika, he described the achievement as a reflection of the company's commitment to operational excellence.

How the plant was modernised

According to reporting from August, the revamp replaced or upgraded the core of the process. The work covered the shift converter, the ammonia converter and the CO2 removal system, and introduced a Distributed Control System (DCS) that gives operators real time monitoring of the plant. Casale, founded in 1921 and based in Lugano, supplied the process technology.

This is a classic brownfield efficiency project. The reactors and separation units that determine how much gas a plant burns per tonne were brought up to a modern standard, and digital control lets the plant run closer to its optimum every hour of the day. None of it required a new site.

The project also has a policy anchor. Industry.co.id reported that the modernisation, launched in January 2026, sits under Presidential Regulation No. 113 of 2025, and that it is the first of seven fertiliser plant revitalisation projects planned under Pupuk Indonesia Group's five year programme. In other words, Pabrik-2 is a template, not a one off.

Why it matters for industrial decarbonisation

Ammonia fertiliser is one of the nine subsectors the Ministry of Industry has prioritised in its industrial decarbonisation roadmap, and energy and material efficiency is the first of the roadmap's pillars. Pabrik-2 shows what that pillar looks like in practice: a measured, verified cut in energy intensity at a plant that is more than four decades old.

It also shows that efficiency and production goals can move together. The revamp did not trade output for emissions. It raised output and lowered emissions at the same time, while cutting costs. For a state owned fertiliser producer whose first duty is food security, that alignment makes efficiency easy to justify.

The verification approach deserves attention too. A 168 hour continuous test against a contractual guarantee, followed by a formal joint declaration with the licensor, produces numbers that financiers, regulators and carbon accounting systems can rely on. That kind of evidence is exactly what industrial emission reporting needs as it matures.

There is a resource angle as well. Natural gas is a finite national asset, and ammonia plants are among its largest industrial users. Saving 4.03 MMBTU on every tonne of ammonia means the same gas allocation now supports more fertiliser, or that gas is freed for other users. Seen this way, an efficiency revamp is not only a cost and carbon measure. It is also a way of stretching a strategic domestic resource further, which is a core circular economy principle: get more useful output from every unit of input before reaching for new supply.

The timing is also worth noting. The plant passed its performance test in August, and the October declaration formalises those results with the licensor. The figures reported in August and October are identical, which gives confidence that the numbers are stable rather than preliminary.

Sirkularium's view

Pupuk Kaltim's revamp is a strong, verifiable example of industrial decarbonisation through efficiency. A reduction of 4.03 MMBTU per tonne, a 4.18 percent output gain, around Rp228 billion in annual savings and about 110,000 tonnes of CO2 avoided each year, all from an existing plant, is the kind of result that makes the business case for decarbonisation on its own terms.

For government and public institutions, three lessons stand out. First, the remaining six revitalisation projects in the Pupuk Indonesia programme are a ready pipeline for efficiency gains. Publishing a common set of before and after indicators for each, energy per tonne, output and CO2, would let the whole programme be tracked the way Pabrik-2 has been.

Second, brownfield revamps across other energy intensive subsectors, from cement kilns to pulp mills and steel furnaces, can follow the same model: a performance guarantee, an independent test, and a formal confirmation of results. Public financing windows and green industry incentives could be tied to this kind of verified outcome.

Third, verified efficiency data should flow into national systems. Recording results like these in industrial emission reporting would help the government show measurable progress toward its industrial net zero ambition and give investors comparable evidence.

What to watch next: the start of the next revitalisation projects under the Pupuk Indonesia programme, how the Pabrik-2 savings are sustained in full scale operation, and whether similar guaranteed efficiency revamps are announced in other priority subsectors. Sirkularium sees this project as a practical blueprint and stands ready to support public institutions and state owned enterprises in replicating it.