Publications

Carbon capture and storage (CCS) is closely tied to energy security and decarbonisation in Indonesia, where the use of fossil fuels for energy and feedstock is expected to persist. CCS can not only unlock the development of high-CO2 content oil and gas fields, but also support the decarbonisation of emissions-intensive industries such as fossil-based power generation, petrochemical, cement, and steel. And the opportunity for CCS does not stop at its borders. Indonesia is naturally advantaged to be a regional CO2 storage hub. Its storage potential in depleted O&G reservoirs and saline aquifers is estimated to go well beyond its domestic needs and dwarves that of competing hubs such as Malaysia and Australia today.

But other key ingredients are needed to develop CO2 transport and storage hubs – national CCS targets, carbon pricing, government incentives, regulatory frameworks, and international collaboration. While Indonesia has progressed regulations to enable CO2 storage, there remain critical gaps in policy and incentives that put it behind Malaysia, Australia and countries in North America and Europe in terms of CCS policy readiness.

What then needs to be in place for Indonesia to develop CCS domestically and better position itself as a regional hub? In this paper, Wood Mackenzie will analyse comparative CCS hubs in other countries, assess the economic drivers of specific CCS hubs, and distil key learnings that Indonesia can benefit from.