Japan plans to help Indonesia use ammonia as a mixed fuel for thermal power generation to help promote carbon-neutral society in Southeast Asia.
Japanese industry minister Hagiuda Koichi is expected to exchange a memorandum of understanding on the project with Indonesia's energy minister during his current tour of ASEAN countries.
Southeast Asia relies heavily on coal power. Indonesia uses the mineral to produce nearly 60 percent of its electricity.
International criticism against coal-fired power generation is rising because it releases a large amount of carbon dioxide.
Ammonia does not emit the greenhouse gas when burned.
From April, Mitsubishi Heavy Industries is scheduled to conduct a study with an Indonesian electric power company to find out if the utility will be able to use an ammonia-mixed fuel. The Japanese government plans to provide financial support.
The government estimates the project will create a business worth billions of dollars in Southeast Asia if it goes into a practical phase.