Indonesia aims to be a hub for the region’s carbon emissions. Will it lead to ‘garbage’ from overseas?

The hefty price tag is the reason why critics cast doubt on its effectiveness and why most companies are reluctant to adopt the technology.

Indonesia’s energy sector, for example, emitted 600 million tonnes of CO2 in 2021, which means power plants in the country would have to spend billions of dollars every year to store carbon they emit.

Dr Belladonna said Indonesia plans to create CCS hubs where a number of factories can share the same point-source capture facility.

“The economics will be cheaper because several companies share the same infrastructure, facilities, costs and liabilities,” she said.

There are currently two potential sites for Indonesia’s first CCS hubs, in Java and Borneo, she said. Feasibility studies of the two locations are still being conducted.

VIABLE SOLUTION OR A RED HERRING?

Adopting CCS technology to reduce carbon emissions is a Catch-22, analysts said, since it paradoxically helps oil companies boost their fossil fuel production.

“The fossil fuel industry is trying to buy more time with the help of CCS technology and keep producing oil and gas,” said Mr Leonard Simanjuntak, Indonesia director of environmental group Greenpeace.

Indonesia’s ambition to become a regional CCS centre comes amid declining oil production. The country’s yearly output is now about a third of what it was around three decades ago, and it became a a net importer in the early 2000s.

According to Indonesia’s energy ministry, the country’s oil production peaked at 2.96 million barrels per day in 1994. Production has steadily declined. Last year, Indonesia’s oil output was 1.01 million barrels per day.