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RI needs new rules to compete for carbon capture investment: Experts
Indonesia may lack the necessary regulations to boost its competitiveness in attracting carbon capture investment when compared to other ASEAN countries.
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Mega project: A worker carries out activities on Sept.21, 2015, in the natural gas liquefaction facility at the Tangguh liquefied natural gas (LNG) plant in Bintuni Bay, West Papua. (Tempo/-)
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ndonesia needs to take bolder action to bring in carbon capture investment as it faces potentially tough competition from other ASEAN member countries that are looking to pursue similar goals.
Some of Indonesia’s neighbors, namely Malaysia, Thailand, Vietnam and the Philippines, all have a great potential for the geological storage of CO2 and are working to develop their own regulations to boost the deployment of the technology, according to research from Akin Gump Strauss Hauer & Feld.
Indonesia is projected receive 80 percent of the carbon capture, utilization and storage (CCUS) investment in the region by 2030, but as more countries develop their CCUS capacity, that share is projected to decline to about 60 percent by 2040, according to International Energy Association (IEA).
Future CCUS investment in ASEAN will depend on legal and regulatory frameworks as well as incentives provided by countries in the bloc, with a focus on attracting international finance, the IEA report also says.
Putra Adhiguna, an energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said that to compete with neighboring countries, Indonesia needs to have internationally credible projects and regulations positioning.
Hence, it is important to develop mechanisms such as failure-to-deliver penalties and clear long-term legal liabilities, which provide assurances that the capture and storage can deliver on what is promised, he said.
“Indonesia and Malaysia are geographically positioned in the strategic region, and the competition is still ongoing,” he told The Jakarta Post on Wednesday.
