The Indonesian government is intensifying efforts to develop its carbon capture and storage (CCS) industry to combat climate change, aiming to leverage its vast storage capacity in saline aquifers and depleted oil and gas reservoirs.  

Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, highlighted the government’s commitment to this technology as part of broader decarbonization initiatives.  

"The government of Indonesia wants to move very quickly on this carbon capture and storage," Mr. Pandjaitan stated at a CCS forum in Jakarta on Wednesday, July 31, 2024. To facilitate this, the government is issuing simplified regulations to ensure that investors can swiftly execute CCS projects. 

Earlier this year, the government introduced a regulation allowing CCS operators to allocate 30% of their storage capacity for carbon dioxide from abroad. This move aligns with Indonesia's strategy to become a key player in the regional CCS market. Indonesia has already signed a letter of intent with Singapore for cross-border CCS collaboration and is in discussions with Japan and South Korea for similar partnerships. 

Indonesia has approved three CCS infrastructure development plans for gas projects: BP's Tangguh project, the Abadi project managed by Japan's INPEX, and the Sakakemang project operated by Spain's Repsol.  

BP's Tangguh project, with a storage capacity of 1.8 gigatons of CO2, is poised to become Indonesia’s first CCS hub. It aims to capture and store CO2 not only from domestic industries but also from international sources, including Nagoya, Japan's largest port. Additionally, the Sunda Asri project, a collaboration between Pertamina and ExxonMobil, is expected to serve as a CCS hub in western Indonesia, capable of storing CO2 from Singapore and local industries. 

Mr. Pandjaitan expressed optimism that these CCS projects would attract new investments, create jobs, and enhance technology transfer. "I believe the presence of BP Tangguh and Sunda Asri can serve as successful examples for similar projects in the future. This is also a strategic step that will bring significant benefits to Indonesia, not only environmentally but also economically and technologically," he said. 

Indonesia's potential for carbon storage is significant, with estimates from the Indonesian Ministry of Energy and Mineral Resources indicating a capacity of 573 gigatons in saline aquifers and 4.8 gigatons in depleted oil and gas reservoirs across various regions. Studies by ExxonMobil and Rystad Energy have further highlighted the substantial storage potential in Indonesia’s sedimentary basins. 

The government has established a framework to support CCS development, including ministerial regulations, carbon injection area designations, investment permits, and CCS technical standards. The initiative aims to streamline investment processes and increase tax and royalty revenues from natural resources like coal, palm oil, nickel, and tin. 

Belladonna Troxylon Maulianda, Executive Director of the Indonesia CCS Center, emphasized the country’s strong position to develop CCS projects due to its geographical advantages and proactive regulatory environment. With 15 CCS projects currently under development, Indonesia is well-positioned to lead the regional CCS business and implement cross-border CCS initiatives, she said.