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By: Haryanto (Research Staff at Purnomo Yusgiantoro Center (PYC)).
Filda C.Yusgiantoro (Senior Researcher at Purnomo Yusgiantoro Center (PYC)).

While obstacles remain, the technology could help transform Indonesia into a regional leader in renewable energy.

In recent years, various energy efficient technologies have been developed in a bid to reduce global carbon emissions and the impacts of climate change. But so far, these alone have proven insufficient to reach the ambitious decarbonization goals laid out in the Paris Agreement.

Recently, during its summit in England in June, the G7 group stated that it would aim to phase out coal power plants, unless some form of carbon capture technology was implemented. To show its commitment to this goal, the group pledged to stop funding coal projects by the end of this year.

But the statement from the G7 countries also suggested that carbon capture, utilization, and storage (CCUS) technologies, which allow the captured carbon to be potentially utilized to enhance oil and gas production or produce chemicals, among others uses, are the key to a carbon-neutral future.

Some argue that CCUS is necessary to accelerate the transition to renewable energy. CCUS is important not only for the fossil energy industry, but for any other essential carbon-intensive industries, such as steel and cement production, that are unlikely to be phased out due to ongoing demand.

CCUS technology is not totally new, and research has taken significant strides in recent years. For example, Japan has conducted a large-scale CCS project in Hokkaido Prefecture, where 300,000 tons of carbon dioxide (CO2) has been successfully injected underground.

CCUS also offers a potential path for Indonesia to wean itself off fossil fuels and establish itself as a regional leader in renewable energy. The development of CCUS in Indonesia can be traced back to the establishment in 2017 of the National Center of Excellence on CCS/CCUS, which brought together experts from Institut Teknologi Bandung (ITB) and the  research center of the Ministry of Energy and Mineral Resources (Lemigas).

Furthermore, there have been some ongoing pilot projects that have studied the implementation of CCUS in Indonesia’s offshore oil and gas fields. Regarding the oil fields, the Japan Petroleum Exploration (JAPEX), the state oil and gas company (Pertamina), and Lemigas agreed this year to conduct a feasibility study for implementation of CCUS at the Sukowati Oil Field in East Java. According to a previous study, CCUS could potentially reduce 4,000 tons of COper day, while increasing oil production by 10,000 barrels per day.

In addition, Pertamina has conducted a CCUS study at the Gundih Gas field in East Java, in conjunction with ITB and several Japanese institutions. The project can potentially reduce emissions by 800 tons of CO2 per day, and use the captured CO2 for enhanced gas recovery (EGR) that could increase gas production by 16 billions of standard cubic feet (BSCF).

The British firm BP has also conducted a feasibility study into using CCUS implementation for EGR at the Tangguh Gas Field in West Papua, aiming to increase gas production by 200 BSCF.

If these critical projects succeed, they could offer an example for the implementation of CCUS in other areas in Indonesia, as well as other parts of the world. Further, they could also help pioneer the embedding of CCUS technology into commercial projects.

Carbon capture technology offers a win-win solution to the problems posed by global climate change in Indonesia. First and most obviously, it can reduce carbon emissions. Second, it can help slow the decline of the country’s oil production, given that the proper use of the carbon captured by the appropriate technologies can enhance oil and gas production.

However, there are some challenges that need to be tackled to ensure the successful implementation of CCUS technology. Among these challenges are its high cost; the integration of CCUS technologies into existing regulations and policies; its implementation into oil and gas production, power generation, and other carbon-intensive industries; and the establishment of a stringent monitoring, reporting and verification (MRV) capacity.

Despite the barriers for CCUS implementation in Indonesia, now is a critical time for the government to push ahead with the adoption of these cutting-edge technologies.

For example, June 2021 saw the establishment of the Asia CCUS Network, proposed by Japan at the 14th East Asia Summit Energy Ministers’ Meeting (EAS-EMM) held in November 2020. Many international industries, academia, and governments have become part of this network, which aims to support CCUS implementation in Asia.

The ongoing pilot studies on CCUS are a good starting point for Indonesia, and demonstrate that the country is serious about developing and deploying the technology. To accelerate this progress, Indonesia needs to create an attractive investment climate not just for its state-owned enterprises, but also for private companies that might be interested in investing in CCUS.

Further, with attractive CCUS opportunities where the associated risks are mitigated, it is also likely that foreign companies might look to invest in the development and deployment of CCUS in Indonesia.

To ensure that the captured carbon will be utilized and thus have market value, for instance, the government can enact policies that oblige relevant companies to purchase the captured carbon. The government can also offer incentives to companies that reduce their carbon emissions through the use of  CCUS technology.

Besides, given the government’s ambitious goal of attaining net zero emissions by 2060, it is hard not to envision a prominent role for CCUS technology in nations like Indonesia. In addition to oil and gas companies, Indonesian state electricity company PLN is currently also considering the use of the CCUS technology in its coal power plants. Other carbon-intensive industries, such as cement, ammonia, iron, and steel, which together account for more than 80 percent of the carbon emissions produced by the country’s industrial sector, are also promising candidates for the future adoption of CCUS technology.

 

Disclaimer: This opinion piece is the author(s) own and does not necessarily represent opinions of the Purnomo Yusgiantoro Center (PYC).

This opinion has been published on The Diplomat.
Check the original article by clicking on this text.

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