Urgency of Climate Change Mitigation in the Energy Sector
In recent years, Indonesia has made significant progress in the industrial sector. However, this has inevitably led to an increase in carbon emissions. According to the Global Carbon Project, Indonesia's carbon emissions reached 487 million tons (Mt CO2) in 2017, an increase of 4.7%, contributing 1.34% of global CO2 emissions (Waste4change, 2022).
Therefore, it is essential to undertake decarbonization or carbon emissions reduction efforts. In the energy sector, Indonesia can reduce carbon emissions through various decarbonization initiatives. The primary step is to transition to renewable energy sources such as solar, wind, and biomass as substitutes for fossil fuels. Implementing microgrid technology will support the integration of renewable energy across various regions. Alternatively, the development of Nuclear Power Plants (“PLTN”) can provide a stable and reliable source of clean energy (Nugroho et al., 2023).
From the oil and gas sector, one proposed technology in this effort is Carbon Capture and Storage (“CCS”) and Carbon Capture, Utilization and Storage (“CCUS”). CCS captures and stores carbon dioxide (CO2) from major emission sources such as power plants and industrial facilities, while CCUS adds the utilization of CO2 before storage, such as for Enhanced Oil Recovery (“EOR”) or chemical production. The consideration of this technology arises from Indonesia's geological potential, despite the high risks and infrastructure costs involved. This article will review the feasibility of implementing this technology.
Potential and Challenges of Implementing Carbon Capture and Storage and Carbon Capture, Utilization and Storage Technology
Indonesia has significant potential for the application of CCS and CCUS technologies due to its geographical and geological advantages. The country is rich in saline aquifers suitable for CO2 storage, with a capacity of 80 to 100 Gigatons. Currently, there are 16 CCS/CCUS projects in Indonesia at the study and preparation stage, aiming to be operational before 2030 (Kontan, 2022). Studies by Lemigas, ExxonMobil, and Rystad Energy indicate that Indonesia's CO2 storage potential exceeds 400 gigatons from oil and gas reservoirs and saline aquifers. CCS/CCUS technology can be used to absorb these emissions (Prasetyo and Windarta, 2022).
However, the main challenges in implementing CCS/CCUS in Indonesia relate to the lack of a regulatory framework and an investment climate that can build investor confidence. The realization of CCS/CCUS also requires significant funding and technology transfer from developed countries. Operational safety is a crucial factor to consider, given the risks of CO2 leakage from underground storage in disaster-prone areas like Indonesia (ITSRic, 2022). This means Indonesia cannot simply apply this technology by following the examples of other countries, as there are differences in geographical conditions and technological readiness.
As of March 2023, the Minister of Energy and Mineral Resources Regulation Number 2 of 2023 regulating CCS and CCUS in Indonesia was enacted. This regulation includes the technical implementation of carbon capture and transportation. Before starting carbon capture and storage activities, operators are required to conduct studies on operational, economic, safety, environmental aspects, as well as monitoring and MRV to ensure the feasibility and integrity of the plan. All stages must comply with legislative requirements, with operations concluding if storage capacity is full, contracts expire, or safety conditions are not met.
Nevertheless, even with the issuance of the latest regulation regarding CCS/CCUS, namely Presidential Regulation Number 14 of 2024, there is still no regulation governing the responsibility of operators in case of leakage or unsafe conditions after activities have ended. For instance, Article 47 paragraphs (4) and (6) of the Presidential Regulation do not clearly address liability for leakage during the cross-border transfer of carbon. Additionally, Article 57 paragraph (3) stipulates that monitoring required of the operator is only mandatory for ten years, with a provision for the deposit obligation during that period. This provision raises questions since carbon storage can take a long time; thus, what are the responsibilities after this period has elapsed? Furthermore, based on Article 29 (3), carbon capture activities can be conducted in power generation activities (including coal-fired power plants), raising concerns that the development of this technology may not align with the energy transition mandated by the government, as it may open the door to dependence on conventional energy use.
Recommendation
In conclusion, the application of CCS/CCUS technology in Indonesia is currently unsuitable. Although Indonesia has substantial geological potential for carbon storage, there are significant challenges to address. High infrastructure costs, low investment interest, and concerns about operational safety and long-term liability for CO2 leakage are some of the issues that need resolution. Moreover, there is apprehension that the focus on CCS/CCUS could divert attention from more direct and effective decarbonization efforts, such as developing renewable energy sources like solar, wind, and biomass, as well as investing in cleaner Nuclear Power Plants. Therefore, the government needs to evaluate a more holistic and sustainable strategy in addressing carbon emissions that is not only technically effective but also economically and socially sound overall.
References
Cabrera, Giorgio, et al. “Carbon Capture, Utilisation and Storage: Incentives, Effects and Policy.” International Journal of Greenhouse Gas Control. Vol. 120 (2022). Pp. 1-11.
Defitri, Mita. “Carbon Capture Storage untuk Indonesia menuju Net Zero Emission.” Waste4change. 22 Agustus 2022. Available at https://waste4change.com/blog/carbon-capture-storage-untuk-indonesia-menuju-net-zero-emission.
ITSRic. “Mengenal Pengelolaan Emisi Karbon Lewat Carbon Capture Utilization Storage.” ITS News. 14 Juli 2022. Available at https://www.its.ac.id/news/2022/07/14/mengenal-pengelolaan-emisi-karbon-lewat-carbon-capture-utilization-storage.
Ministry of Energy and Mineral Resources of the Republic of Indonesia. Ministerial Regulation Number 2 of 2023 on the Implementation of Carbon Capture and Storage, and Carbon Capture, Utilization, and Storage in Upstream Oil and Gas Activities. State Gazette of the Republic of Indonesia 2023 Number 407.
Nugroho, A. D., et al. “Kebijakan Dekarbonisasi Sistem Energi Indonesia Pada Sektor Energi Terbarukan.” Cakrawala. Vol. 17. Number 2 (2023). Pp. 109-125.
Prasetyo, Ahmad Wisnu, and Jaka Windarta. “Pemanfaatan Teknologi Penangkapan dan Penyimpanan Karbon (CCS) dalam Upaya Mendukung Produksi Energi Berkelanjutan.” Jurnal Energi Baru dan Terbarukan. Vol. 3. Number 3 (2022). Pp. 231-238.
President of the Republic of Indonesia. Presidential Regulation Number 14 of 2024 on the Implementation of Carbon Capture and Storage in Indonesia. State Gazette of the Republic of Indonesia 2024 Number 27.
Rahayu, Arfyana Citra. “Ada 14 Proyek CCS/CCUS di Indonesia, Sebagian Besar On-Stream Sebelum 2030.” Kontan.co.id. 21 September 2022. Available at https://industri.kontan.co.id/news/ada-14-proyek-ccsccus-di-indonesia-sebagian-besar-on-stream-sebelum-2030.
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