Introduction

In recent years, Indonesia has experienced significant progress in the industrial sector, positioning itself as one of the rapidly growing developing countries. However, this achievement has undeniably contributed to the global increase in carbon emissions. According to the Global Carbon Project, in 2017 alone, Indonesia’s carbon emissions reached 487 million tons (Mt CO2), marking a 4.7% increase from the previous year and contributing 1.34% to the total global CO2 emissions of 36,153 million tons (Mt CO2).

The growing awareness of the importance of reducing carbon emissions has prompted Indonesia to actively engage in sustainable carbon emission management efforts. To maintain environmental and climate balance, Indonesia participates in the Conference of The Parties (“COP“) for the Paris Agreement and Net Zero Emission (“NZE“), focusing on the development of technologies such as Carbon Capture Storage (“CCS“) and Carbon Capture, Utilization, and Storage (“CCUS“) as measures to address this issue.1

Technologies like CCS and CCUS are crucial to be developed, especially in the Oil and Gas (“Migas“) sector, a major contributor to energy sector emissions. Aligned with the movement towards “cleaner” energy use through various initiatives such as energy mix, a significant reduction in CO2 emissions is projected, estimated at 6% by 2025 and up to 37% by 2050, provided that CCS and CCUS implementations are in place.2 Therefore, this article will further discuss CCS and CCUS, their potentials and benefits, along with the challenges and risk mitigation in the following sections. Additionally, the latest legal framework regarding the implementation of this technology will be addressed.

Discussion

Definition of CCS and CCUS

Carbon Capture and Storage – Penangkapan dan Penyimpanan Karbon is a storage system designed to receive and store carbon emissions released by industries and power plants into geological formations safely and permanently, with a specific capacity for a long period. The CCS method utilizes technology that integrates various disciplines with the primary goal of achieving decarbonization or even a “net zero carbon” state, aiming to address the impacts of oil and gas exploration and exploitation activities.3

Meanwhile, Carbon Capture, Utilization, and Storage – Penangkapan, Pemanfaatan, dan Penyimpanan Karbon refers to a combination of technologies involved in capturing CO2 from significant sources, transporting it through pipelines or other means, using CO2 in various applications and purposes, and ultimately injecting it into deep geological formations where CO2 will be trapped and stored permanently.4 CCS and CCUS technologies are the only ones capable of reducing Greenhouse Gas (“GHG”) emissions from large-scale industrial and power plant fuel combustion activities. To date, CCS technology is considered effective in supporting global carbon emission reduction. However, the costs associated with adopting CCS technology for a country are substantial.5

Potential and Benefits of Implementing CCS and CCUS in Indonesia

Indonesia possesses significant potential for the application of CCS and CCUS technologies, offering substantial advantages in managing carbon commodities. This potential is complemented by Indonesia’s strategic geographic and geological advantages in the Asia-Pacific region. Geologically, Indonesia is rich in saline aquifers, highly suitable for CO2 storage, with a capacity of 80 to 100 gigatons. Currently, there are 16 CCS/CCUS projects in Indonesia in the study and preparation stages.6

Most CCS/CCUS projects in Indonesia aim to commence operations before 2030. A promising project set to be implemented soon is the Tangguh Enhanced Gas Recovery (“EGR”) Project in the Tangguh Gas Field, West Papua, representing a form of CCUS utilization to enhance natural gas production. The project aims to reduce carbon emissions by approximately 25 million tons of CO2 by 2035 while increasing production to 300 billion of Standard Cubic Feet (“BSCF”) in the same year. The success of Tangguh EGR could serve as a model for the future development of the gas industry in Indonesia.7

Image 1: Mapping the planned locations for CCS/CCUS implementation in Indonesia.8

Lemigas, ExxonMobil, and Rystad Energy conclude from their studies that Indonesia has exceptional CO2 storage potential, exceeding 400 gigatons from gas reservoirs and saline aquifers. The Ministry of Energy and Mineral Resources (“ESDM”) and other stakeholders project that GHG emissions from the oil and gas sector will peak in 2030, reaching around 44 million tons of CO2.9 Therefore, this technology can effectively serve as an absorber of these emissions, simultaneously offering high economic benefits.

On the other hand, if utilized optimally, the applications of CCS and CCUS go beyond global emission reduction and can support sustainable energy production. This includes improving access to affordable, sustainable, and modern energy for all while ensuring the well-being of all segments of society. The technology can also create job opportunities, extend the lifespan of infrastructure, reduce operational costs of electricity provision, and support innovation-based economic growth. With their presence, CCS and CCUS can contribute to energy security in various ways, such as:

  1. Enabling energy diversity, including sustainable fossil fuels.
  2. Preserving long-term job opportunities and investments in the energy industry.
  3. Safeguarding the value of investments in energy and industrial infrastructure.
  4. Providing additional technological options for power generation.
  5. Supporting investments in alternative energy sources.10

Operation of CCS and CCUS

The general implementation of CCUS technology involves the following stages: first, CO2 will be removed or separated from large industries such as coal plants, power plants, and the production processes of steel and cement. There are three types of capture methods:

  1. Pre-Combustion
    The Pre-combustion system is a method to capture CO2 from fossil fuels before combustion. This process involves treating the primary fuel with steam, air, or oxygen in a reactor, producing a mixture of carbon monoxide (“CO”) and H₂ as the main components of the synthesis gas.
  2. Post Combustion
    The Post Combustion system is a method to remove CO2 from exhaust gases generated during the combustion of the main fuel in the air. Typically, this system uses a liquid solvent to capture a small portion of CO2 (around 3% – 15% by volume) in the exhaust gas stream dominated by nitrogen from the air.
  3. Oxyfuel Combustion
    This system uses pure oxygen to produce exhaust gases consisting of water vapor and CO2, with CO2 concentration higher than water vapor (more than 80% by volume). Water vapor is removed from the exhaust gas through cooling and compression. Oxyfuel Combustion requires pure oxygen (95-99% purity) with higher costs to produce a stream of pure oxygen. Although theoretically simpler and cheaper than absorption, its drawback is the high cost of producing pure oxygen.
    Image 2: Implementation Scheme of CCS and CCUS.11
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These three methods are referred to as CO2 Capture, capable of capturing about 90% of CO2 emissions. The compressed CO2 is then transported via pipelines to suitable storage fields, such as former oil fields or saline aquifers, and then injected into these formations. The use of pipelines is considered efficient and safe transportation, as seen in the UK, where onshore and offshore pipelines are used to transport carbon to underwater storage.12

Barriers and Risk Mitigation

In implementing and sustaining the utilization of CCS/CCUS technology, the Indonesian government needs to consider adequate regulations and legal aspects that can encompass the long-term operation of CCS/CCUS projects. The current application of CCS/CCUS technology in Indonesia is primarily focused on increasing production in aging oil wells. Despite the proven potential of CCS/CCUS, especially in Enhanced Oil Recovery (“EOR”), its realization requires substantial funding, and technology transfer from successful countries is deemed necessary in this regard.13

The main obstacles to the implementation of CCS/CCUS in Indonesia are primarily related to the still insufficient framework and operational regulations that can instill confidence in investors and project developers, as well as public trust in operational safety. Public awareness of CCS/CCUS is still low; however, the growing interest in research and the recent issuance of regulations for short-term research and development indicate a positive shift.

Regarding operational safety, it is a factor that, according to the author, must be thoroughly considered. The operational mechanism of CCS/CCUS, capturing CO2 for subsequent storage in various storage types, including underground geological formations, actually poses a relatively high risk. Given Indonesia’s geographical and geological vulnerability to disasters, the risk of CO2 leakage from underground storage must be minimized, and mitigation plans must be properly regulated.

This security factor is evident in the requirement that the rock formations used for storage must meet specific criteria, such as the presence of caprock layers and pore cavities. Supervision and monitoring are conducted using various methods, including satellites and seismic wave measurements, to maintain the stability of CO2 storage. Moreover, storage itself involves various considerations that impact the process. Comprehensive analyses from technical, legal, infrastructure, regulatory, and economic perspectives are imperative before actual operations are carried out.14

Framework of Regulations for CCS and CCUS in Indonesia

As of March 2023, the legal framework and policies for Carbon Capture and Storage (CCS) and Carbon Capture, Utilization, and Storage (CCUS) in Indonesia have been accommodated by the Minister of Energy and Mineral Resources Regulation No. 2 of 2023 concerning the Implementation of Carbon Capture and Storage, as well as the Capture, Utilization, and Storage of Carbon in Upstream Oil and Gas Business Activities (“MEMR Regulation 2/2023“). Several crucial provisions outlined in this regulation include the following:

  • The implementation of CCS and CCUS within the Work Area15, activities involving injection, utilization, and storage of carbon emissions must commence with the capture and/or transport of carbon emissions.16
  • Carbon capture can be executed through various methods, including:
  1. Separating carbon emissions at oil and gas production facilities;
  2. Capturing emissions from combustion;
  3. Pre-ignition capture;
  4. Capturing oxyfuel combustion; and/or
  5. Other methods are in line with advancements in science and technology.
  • Moreover, carbon capture, specifically carbon dioxide, is not limited to the mentioned sources but can also be sourced from the atmosphere using direct air capture technology.17 For the transport of carbon emissions, methods such as pipelines, trucks, shipping, and/or other techniques in line with scientific and technological advancements are permissible.
  • Simultaneously, the injection and storage of carbon emissions involve the injection of carbon emissions into the Target Injection Zone following sound engineering principles. The Target Injection Zone may include reservoirs in oil and gas fields, unconventional gas reservoirs, saline aquifers, or coal layers for Coal Methane Gas (“CMG“) activities. These activities are carried out by contractors within the Work Area during the exploitation period.18
  • Notably, CCS/CCUS activities in the oil and gas sector are restricted during oil and gas exploration. The purpose of utilizing carbon emissions is to enhance oil and gas production through increased recovery in advanced stages of crude oil, natural gas, or CMG.19
  • Entities conducting CCS/CCUS activities are obligated to conduct studies for the implementation of CCS/CCUS, covering minimum aspects such as:
  1. Geology;
  2. Geophysics;
  3. Reservoirs;
  4. Operation of transport, storage, and injection, including utilization for CCUS activities;
  5. Economics;
  6. Engineering;
  7. Safety and the environment;
  8. Risk evaluation and mitigation; and
  9. Monitoring and Measurement, Reporting, and Verification (“MRV“).20
  • These studies are conducted to ensure the feasibility of CCS or CCUS implementation in line with referenced standards and sound engineering principles. The study results must minimally include estimates of carbon storage capacity, depth, and thickness of the Target Injection Zone, hydraulic conductivity of the Target Injection Zone, the impact of carbon emission composition on the Target Injection Zone, integrity of buffer zone layers, and others. Additionally, Injection Wells can be either new dedicated wells or converted existing wells.21
  • The implementation of CCS or CCUS under this regulation involves stages such as the preparation of mitigation documents, engineering processes, procurement, and construction, commissioning, operation, operational safety management, environmental management, emergency response, repair and maintenance, as well as Monitoring and MRV until the closure of CCS or CCUS activities. All these stages must comply with the provisions of the applicable laws and regulations.22
  • Upon the conclusion of the implementation period, closure of CCS or CCUS activities may occur under circumstances such as:
  1. The complete capacity of storage in the Target Injection Zone;
  2. No further carbon emissions are being injected;
  3. Expiration and non-extension of the Cooperation Agreement23 period;
  4. Unsafe conditions; or
  5. Natural disasters necessitate closure as the optimal option.
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Types of natural disasters are classified according to the terms in the cooperation agreement.24

Conclusion

In addressing the impacts of increased carbon emissions from the industrial sector, Indonesia is proactively managing this issue through its participation in the Paris Agreement, aiming to achieve Net Zero Emissions (NZE). One of Indonesia’s key strategies in this effort is the implementation of Carbon Capture and Storage (CCS) and Carbon Capture, Utilization, and Storage (CCUS) technologies, particularly in the Oil and Gas sector.

Projects such as Tangguh EGR in West Papua and 15 other projects in the study/planning phase showcase the Indonesian Government’s commitment, supported by its rich geological potential, providing a strategic foundation to address carbon emission issues. Despite existing challenges and risks, especially in ensuring the safety of implementation, Indonesia is determined to overcome these obstacles.

Furthermore, with the adoption of these technologies, Indonesia not only contributes to global emission reduction but also opens opportunities for sustainable economic growth and future energy security. New regulations and legal frameworks have been implemented to govern the implementation of CCS and CCUS in Indonesia, establishing a robust foundation for the current technological development. It is hoped that future regulations will comprehensively address the evolving needs of project implementation in the future.

Sang Rafi Syuja

References

Articles

Prasetyo, Ahmad Wisnu, and Jaka Windarta. “Utilization of Carbon Capture Storage (CCS) Technology in Efforts to Support Sustainable Energy Production.” Journal of New and Renewable Energy. Vol. 3. Number 3 (2022). Pages 231-238.

Amina, Steffany R., Amanda T. Deborah, and Muhammad D. Wajdi. “Analysis of Carbon Capture Storage from Oil and Gas Exploration in Achieving Sustainable Development Goals.” Journal of Geophysical Exploration. Vol. 8. Number 01 (2022). Pages 44-57.

Amelinda, Adanya T. and Subiakto Soekarno. “Financial Feasibility Study of Carbon Capture, Utilization, and Storage Project in West Java, Indonesia.” European Journal of Business and Management Research. Vol. 8. Issue 3 (2023). Page 215-220.

Internet

Artanti, Annisa Ayu. “Exxon, Chevron, and BP Compete to Apply CCUS Technology in Indonesia.” Metro TV News. July 13, 2023. Available at https://www.metrotvnews.com/read/KdZCVxDY-exxon-chevron-hingga-bp-rebutan-terapkan-teknologi-ccus-di-indonesia.

Defitri, Mita. “Carbon Capture Storage for Indonesia Towards Net Zero Emission.” Waste4change. August 22, 2022. Available at https://waste4change.com/blog/carbon-capture-storage-untuk-indonesia-menuju-net-zero-emission/.

Directorate General of Oil and Gas. “Costs Remain a Challenge, Efforts Needed to Boost the Economy of CCS/CCUS Projects.” Ministry of Energy and Mineral Resources of the Republic of Indonesia. February 2, 2023. Available at https://migas.esdm.go.id/post/read/biaya-masih-jadi-tantangan-perlu-upaya-dorong-keekonomian-proyek-ccs-ccus.

ITSRic. “Understanding Carbon Emission Management Through Carbon Capture Utilization Storage.” ITS News. July 14, 2022. Available at https://www.its.ac.id/news/2022/07/14/mengenal-pengelolaan-emisi-karbon-lewat-carbon-capture-utilization-storage/.

Rahayu, Arfyana Citra. “There Are 14 CCS/CCUS Projects in Indonesia, Majority On-Stream Before 2030.” Kontan.co.id. September 21, 2022. Available at https://industri.kontan.co.id/news/ada-14-proyek-ccsccus-di-indonesia-sebagian-besar-on-stream-sebelum-2030.

Sources

  1. Mita Defitri, “Carbon Capture Storage for Indonesia towards Net Zero Emission,” Waste4change, August 22, 2022, available at https://waste4change.com/blog/carbon-capture-storage-untuk-indonesia-menuju-net-zero-emission/, accessed on December 12, 2023.
  2. Ahmad Wisnu Prasetyo and Jaka Windarta, “Utilization of Carbon Capture Storage (CCS) Technology in Efforts to Support Sustainable Energy Production,” Journal of New and Renewable Energy, Vol. 3, No. 3 (2022), page 235.
  3. Steffany R. Amina, Amanda T. Deborah, and Muhammad D. Wajdi, “Analysis of Carbon Capture Storage from Oil and Gas Exploration in Achieving Sustainable Development Goals,” Journal of Geophysical Exploration, Vol. 8, No. 1 (2022), page 45.
  4. Amelinda T. Adanya and Subiakto Soekarno, “Financial Feasibility Study of Carbon Capture, Utilization, and Storage Project in West Java, Indonesia,” European Journal of Business and Management Research, Vol. 8, Issue 3 (2023), page 216.
  5. Prasetyo and Windarta, “Utilization of Technology…,” page 236.
  6. Arfyana Citra Rahayu, “There Are 14 CCS/CCUS Projects in Indonesia, Most On-Stream Before 2030,” Kontan.co.id, September 21, 2022, available at https://industri.kontan.co.id/news/ada-14-proyek-ccsccus-di-indonesia-sebagian-besar-on-stream-sebelum-2030, accessed on December 12, 2023.
  7. Ibid.
  8. Directorate General of Oil and Gas, “Costs Remain a Challenge, Efforts Needed to Boost the Economy of CCS/CCUS Projects,” Ministry of Energy and Mineral Resources of the Republic of Indonesia, February 2, 2023, available at https://migas.esdm.go.id/post/read/biaya-masih-jadi-tantangan-perlu-upaya-dorong-keekonomian-proyek-ccs-ccus, accessed on December 12, 2023.
  9. Ibid.
  10. Prasetyo and Windarta, “Utilization of Technology…,” page 237.
  11. fIbid, page 233.
  12. Ibid, page 233-234.
  13. Ibid, page 236.
  14. ITSRic, “Understanding Carbon Emission Management Through Carbon Capture Utilization Storage,” ITS News, July 14, 2022, available at https://www.its.ac.id/news/2022/07/14/mengenal-pengelolaan-emisi-karbon-lewat-carbon-capture-utilization-storage/, accessed on 12 December, 2023.
  15. According to Article 1 number 20 MEMR Regulation Number 2 of 2023, the Work Area is a specific area within the legal territory of Indonesian mining for the implementation of Exploration and Exploitation, in this case, Oil and Gas.
  16. Regulation of the Minister of Energy and Mineral Resources concerning the Implementation of Carbon Capture and Storage, as well as Carbon Capture, Utilization, and Storage in Upstream Oil and Gas Business Activities, MEMR Regulation Number 2 of 2023, Article 5.
  17. MEMR Regulation Number 2 of 2023, Article 6 paragraphs (3) and (4).
  18. MEMR Regulation Number 2 of 2023, Art. 7-8.
  19. MEMR Regulation Number 2 of 2023, Art. 9.
  20. According to Article 1 number 16 of MEMR Regulation Number 2 of 2023, MRV is the activity to ensure that data and/or information on mitigation actions and adaptation actions have been implemented per the procedures and/or standards that have been established and are guaranteed for their accuracy.
  21. MEMR Regulation Number 2 of 2023, Art. 12.
  22. MEMR Regulation Number 2 of 2023, Art. 19 paragraph (2).
  23. According to Article 1 number 21, a Cooperation Agreement is a profit-sharing contract or another form of cooperation contract in Exploration and Exploitation activities that benefits the country more and its results are utilized for the greatest prosperity of the people.
  24. MEMR Regulation Number 2 of 2023, Art. 22.