Indonesia’s Rapid Steps Towards Carbon Emission Reduction
Indonesia has set an ambitious target to achieve Net Zero Emissions (NZE) by 2060, and CCS/CCUS is one of the key strategies being relied upon. This innovative technology helps significantly reduce carbon emissions while supporting the energy transition. Through CCS/CCUS, captured CO2 is stored underground or repurposed in industrial processes. According to the IEA’s roadmap for NZE by 2050, CCS/CCUS could contribute more than 10% of the global emission reduction by 2050.
Indonesia’s Ministry of Energy and Mineral Resources has regulated carbon capture and storage activities in the oil and gas sector through Regulation 2/2023. Several CCS/CCUS projects are included in this framework, such as in Gemah, Ramba, Jatibarang, Sakakemang, and others. Pertamina’s first CCUS pilot project at the Jatibarang Field in 2022 saw captured CO2 injected into the company’s oil wells to both reduce carbon emissions and enhance oil production. This project serves as an early model for similar projects across the country.
The government has also expanded the scope of CCS/CCUS implementation with Presidential Regulation No. 14/2024, allowing CO2 captured from outside the oil and gas industry to be processed in CCS/CCUS operations. This opens up cross-border opportunities and investment potential in Indonesia’s oil and gas sector.
Why is CCS/CCUS Important for Indonesia?
- Large Storage Potential: Indonesia has geological formations capable of storing large carbon emissions. Former oil and gas fields are prime locations for CO2 storage. The Ministry of Energy has reported a national carbon storage potential of 572 billion tons of CO2 in saline aquifers and 4.85 billion tons in depleted oil and gas reservoirs.
- Boosting Oil Production: Besides reducing emissions, CCS/CCUS can enhance oil production by injecting CO2 into oil reservoirs.
- Driving Economic Growth: Further development of CCS/CCUS could create new jobs and attract global investments. Cross-border CCS opportunities also open up investment potential with cooperation schemes in the oil and gas industry.
- Strengthening Indonesia’s Regional Position: Indonesia has the potential to lead regional carbon reduction efforts in the Asia Pacific by implementing CCS/CCUS technology, contributing to global climate change mitigation.
Challenges and Opportunities
Despite the vast potential of CCS/CCUS, its implementation faces challenges, primarily due to high costs. Treating CO2 before injection underground is expensive, ranging from $35 to $60 per ton of CO2. Additionally, if the gas being processed has low CO2 concentration, the cost rises even higher. Skilled human resources are also essential for implementing these technologies effectively.
On the flip side, these challenges present opportunities for innovation and collaboration between the government, industry, and academia. Ongoing research and development are critical for CCS/CCUS technology and its business frameworks. For example, Pertamina International Shipping is working with Japan’s Nippon Yusen Kaisha Group (NYK) to develop ships and infrastructure to support CCS/CCUS operations.
CCS/CCUS offers a promising solution to achieve NZE targets and opens up exciting business opportunities during the energy transition. However, all stakeholders must strongly commit to ensuring CCS/CCUS is implemented as targeted, paving the way for a more sustainable future for generations to come. (PS)
