IEA – Carbon Capture, Utilisation and Storage in Indonesia

Indonesia's economic development has had a significant impact on its energy sector, and in order to achieve its climate goal of net zero emissions by 2060, the country needs clean energy alternatives. Carbon capture, utilisation and storage (CCUS) can play a crucial role in Indonesia's energy transition and help achieve this goal while promoting energy security and employment outcomes. In March 2023, the Indonesian Ministry of Energy and Mineral Resources established the first CCUS regulatory framework in the Association of Southeast Asian Nations (ASEAN) through Ministerial Regulation MEMR 2/2023. This sets the stage for upstream oil and gas companies to engage in CCUS activities, including the development of CO2 storage resources. MEMR 2/2023 is a promising first step towards CCUS deployment in Indonesia and can serve as a model for other ASEAN countries. Efforts are already underway in Thailand and Malaysia to create similar frameworks. However, the current regulation has limited scope beyond the oil and gas sector, and there are opportunities for CCUS in other industries such as electricity generation and fuel transformation. To fully integrate CCUS into Indonesia's decarbonisation efforts, additional ministerial regulations are needed to establish a broader CCUS framework. One such regulation is being drafted to open up the potential for cross-border projects, allowing countries with limited CO2 storage resources to send their captured CO2 to countries with more developed storage facilities. These projects can contribute to the wider decarbonisation of the ASEAN region. Regulatory changes and the development of carbon accounting methodologies will be necessary to facilitate cross-border projects and ensure compliance with international protocols. It is also important to review existing ASEAN platforms for regional energy cooperation to coordinate opportunities in CO2 transport and storage networks. Overall, the establishment of the CCUS regulatory framework in Indonesia is a crucial step towards achieving the country's climate goals, and further developments and collaborations within the ASEAN region can help accelerate the adoption of CCUS technologies.