Indonesia promotes regulations on implementation of CCS/CCUS projects.

On March 3, 2023, the Minister of Energy and Mineral Resources of Indonesia promulgated Regulation No. 2 of 2023 on the implementation of CCS and CCUS in Oil and natural gas business activities.CCS stands for carbon capture and storage whereas CCUS stands for carbon capture, utilization and storage .These processes require transportation of CO2 if CO2 is not being utilized or stored on site.

16 projects on carbon capture and storage (CCS) or carbon capture, utilization and storage (CCUS) are planned to come into operation before 2030.The Government Authority of Indonesia along with business investors and operators are looking forward to collaborating on this project and also towards carbon trading in order to elevate such projects economically which requires financial support and to become primed to manage risk and to manage an efficient security.

This project is also a way to increase the production of oil and gas and at the same time achieve the vision of reducing the emissions in the country to net zero by 2060.

This regulation facilitates an efficient mechanism for CCS/CCUS projects and a process by which these projects can be implemented and monitored while keeping up to certain standards. These standards have emerged out of experience of implementation of CCS/CCUS projects by other jurisdictions which still needs a bit more precision.

Indonesia hadn’t yet witnessed carbon trading and pricing being implemented there as whole. For CCS projects to work proficiently carbon trading has to be taken into consideration as it further impacts the business gained through CCS. CCUS on the other hand is capable enough to earn profit relying on utilization of carbon along with increased oil production but it fails to contribute towards storage of CO₂.