Carbon Capture Storage (CCS) as Indonesia’s Economic Driver: Harnessing Potential for a Green Future

Source Company Press Release
Company Pertamina, ExxonMobil
Tags Corporate: Overview/Strategy, Country: Indonesia, Segment: CCS/CCUS, Sustainability: ESG/CSR
Date December 23, 2023

With a strong commitment to sustainable development, the Indonesian government proudly announces strategic advancements in the Carbon Capture and Storage (CCS) technology.

Indonesia, boasting a potential CO2 storage capacity ranging from 400 to 600 gigatons in depleted reservoirs and saline aquifers, stands at the forefront of the green industrial era. This potential allows for the national storage of CO2 emissions for approximately 322 to 482 years, with an estimated emission peak of 1.2 gigatons of CO2 equivalent by 2030. 

As a pioneer in ASEAN for CCS regulations and ranking first in Asia, according to the Global CCS Institute, Indonesia has established a robust legal framework. These regulations encompass Ministerial Regulation ESDM 2/2023 regarding CCS in the upstream oil and gas industry, Presidential Regulation 98/2021 concerning the carbon economic value, and Financial Services Authority Regulation 14/2023 regarding carbon trading through IDXCarbon. We are also progressing towards the Presidential Regulation finalization that will further strengthen CCS regulations.

To achieve Net Zero Emissions by 2060, Indonesia ambitiously aims to develop CCS technology and establish a CCS hub. This initiative will not only accommodate domestic CO2 but also foster international collaboration. It signifies a new era for Indonesia, where CCS is recognized as a 'license to invest' for low-carbon industries such as blue ammonia, blue hydrogen, and advanced petrochemicals. This approach will be a breakthrough for Indonesia's economy, unlocking new industry opportunities and creating a global market for low-carbon products.

CCS necessitates substantial investment. A recent MOU between the Indonesian government and ExxonMobil includes a $15 billion investment in the zero-emission industry. For comparison, the CCS Quest project in Canada required USD 1.35 billion for a capacity of 1.2 million tons of CO2 per year. These figures highlight the significance of international CO2 storage allocations in facilitating substantial initial investments for CCS projects.

With neighboring countries like Malaysia, Timor-Leste, and Australia striving to become regional CCS hubs, Indonesia must capitalize on this opportunity as a strategic and geopolitical center.

This initiative is expected not only to assist Indonesia in achieving global environmental goals but also to drive sustainable and innovative economic growth.

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