Carbon Capture and Storage: A Win-Win for Indonesia’s Climate Goals and Economy


Carbon Capture and Storage: A Win-Win for Indonesia’s Climate Goals and Economy
By Johana

Indonesia is emerging as a frontrunner in Southeast Asia Carbon Capture and Storage (CCS) technology. CCS is a way of reducing carbon emissions, that involves the capture of carbon dioxide (CO2) emissions from industrial processes, such as steel and cement production, or from the burning of fossil fuels in power generation. Which is then transported from where it was produced, via ship or in a pipeline, and stored deep underground in geological formations. The government is actively implementing policies and subsidies to propel the development and adoption of CCS, aiming to achieve its ambitious climate goals. Indonesia boasts significant potential for carbon storage, with estimates suggesting storage resources could last for centuries. This makes the country highly suitable for implementing CCS technology to capture and store carbon dioxide emissions from various sources, including power plants and industrial facilities.

Government Initiatives 
The Indonesian government is taking concrete steps to nurture the growth of the CCS market. The issuance of Presidential Regulation No. 14/2024 in January 2024 marked a significant milestone, providing legal certainty for investors and paving the way for incentive schemes. The Ministry of Energy and Mineral Resources is collaborating with the Ministry of Finance to determine the specifics of these incentives, including storage fees, royalties, and other financial benefits. 

Challenges and Opportunities
While Indonesia presents a promising landscape for CCS, there are challenges to address. Ensuring data transparency and preventing greenwashing within the carbon capture process are crucial aspects. The government is actively working on establishing effective Monitoring, Reporting, and Verification (MRV) systems to guarantee the integrity of CCS projects. Additionally, attracting a wider range of participants to the carbon market is essential for a thriving CCS ecosystem.

Collaboration for a Cleaner Future: Indonesia’s Rise in CCS Technology
Indonesia recognizes the importance of collaboration in advancing CCS technology. The country is actively forging partnerships with regional and international players, like the ongoing cross-border collaboration on CCS with Singapore. This collaborative approach highlights the potential for collective action in achieving shared environmental goals and solidifying Indonesia’s position as a leader in CCS technology within Southeast Asia. By addressing the existing challenges through effective regulations and market development strategies, Indonesia’s push towards CCS technology presents a unique opportunity to reduce greenhouse gas emissions and transition towards a cleaner energy future.