Indonesia allows storage of foreign CO2 to boost carbon capture sector

Indonesia has issued new regulations on carbon capture and storage (CCS), under which CCS operators can earmark 30 percent of their total storage capacity for imported carbon dioxide that meets specific conditions.

The presidential regulation allows oil & gas contractors to use depleted reservoirs or aquifers in their assets for CCS operations. The government will receive royalties on the storage fees charged.

Under the rules, which came into effect on Tuesday, companies with CCS operations can allocate up to 30 percent of their total storage capacity for storage of carbon originating from abroad, the regulation said.

Storge is only currently allowed for emitters who have invested in Indonesia, or which are affiliated with companies that have done so. Indonesia also needs to have a bilateral agreement with the government of the country where the carbon emissions have originated from, the rules say.

Indonesia estimates it could potentially store over 400 gigatonnes of CO2 equivalent. The carbon for storage could come from emissions released through oil & gas activities, refineries, power plants and over the course of industrial activities.

Indonesia has 15 CCS and CCUS projects under various stages development, government data shows. Last year, BP launched the construction of a CCUS (CCS + carbon utilization) project in the country's West Papua province. Pertamina, the state energy firm, is discussing CCS investments in Indonesia with US oil majors Exxon Mobil and Chevron.