JAKARTA (Reuters) – Singapore has become the first country to sign a letter of intent with Indonesia on cross-border collaboration for the capture and storage of carbon dioxide (CCS), following a new Indonesian law to allow it.
Indonesia, which sees potential to develop its upstream natural gas sector and CCS as part of the global transition to greener fuel, last month issued a presidential regulation allowing CCS operators to allocate 30% of their storage capacity for imported carbon dioxide (CO2).
Singapore and Indonesia will form a working group to seek a legally binding bilateral agreement between the neighbouring countries, according to a joint statement on Thursday.
The outline deal marked “a significant milestone in our efforts towards sustainable development and environmental stewardship”, Jodi Mahardi, Indonesia’s deputy coordinating minister overseeing energy, told Reuters.
Critics say CCS is an expensive and unproven technology, but Indonesia is keen to become a hub for CO2 storage in the region.
The government said the archipelago has more than 400 gigatonnes of storage capacity in the form of depleted oil and gas reservoirs and saline aquifers.
It also said the country had 15 CCS and carbon capture, storage and utilisation projects in various stages of preparation, with a combined investment of nearly $8 billion.
(Reporting by Fransiska Nangoy, Rishav Chaterjee; editing by Barbara Lewis)
