Source: Indonesia Ministry of Energy
Source: Indonesia Ministry of Energy

Indonesia signs biofuels and CCS MOU with ENI

Fossil fuel-dominant Indonesia has signalled its intentions to tackle its emissions by signing a wide-ranging MOU with ENI.

The agreement was signed by Minister of Energy and Mineral Resources Arifin Tasrif together with the Indonesian and ENI directors.

The MOU covers the development of bio-feedstock to produce biofuels, nature-based and technology-based carbon offsets as well as other initiatives related to the energy transition and decarbonization, including but not limited to the Carbon Capture Storage (CCS), Carbon Capture Utilization and Storage (CCS/CCUS) and energy efficiency.

The collaboration signals Indonesia’s attempts to ramp up decarbonisation as it strives to hit Net Zero emissions by 2060 ‘or before’.

ENI holds participating interest in 13 Production Sharing Contracts in Indonesia (nine in deep waters) with actual gas production amounting to 705.6 mmscfd in 2023. Its annual hydrocarbons production totals 23mm boe and it supplies 1.36 bcm of LNG.

Among its main activities is the development of Merakes, a field located in the deep waters of East Kalimantan that will enable the country to increase its gas output for the domestic energy market and for export by exploiting existing infrastructure. Last October it announced an important gas discovery in the Kutei basin, around 85km from the east coast of Kalimantan, after buying Chevron’s interests in the basin in July.

Indonesia’s remarkable economic growth over the past half-century has had major implications for its energy sector and emissions, with coal playing a large role in both, according to the IEA. Despite recent signs of a slowdown in exports and commodity prices, its economy still grew 5% in the fourth quarter of 2023.

Young power plants and industrial facilities producing cement, iron and steel will need clean energy alternatives and energy efficiency measures in order for Indonesia to reach its 2060 target. CCUS is likely to be an important technology to help achieve that goal.

Indonesia is already taking meaningful steps, finalising the first regulatory framework for CCUS in Southeast Asia in early 2023. However, for CCUS to play its diverse role in Indonesia’s decarbonisation further steps are needed to expand the current framework beyond the oil and gas sector.

More than a dozen CCS projects are at preparatory stage, most of which are expected to be operational by 2030.

Work began on the first project last November. Located in West Papua province, the bp-operated project can store up to 1.8 gigatonnes (Gt) of carbon dioxide (CO2), according to a statement by Arifin Tasrif, Indonesian Energy Minister.

Masdar recently signed agreements to collaborate with Indonesia’s state-owned utility company, PLN, to move ahead with major development plans for Southeast Asia’s largest floating solar power plant and explore green hydrogen opportunities.

Located on the Cirata reservoir in West Java, Indonesia, the plant was inaugurated earlier this month and generates enough renewable energy to power 50,000 homes, while displacing 214,000 tonnes of carbon emissions per year.  Last September, both parties signed an agreement to develop Phase II of the Cirata plant to triple capacity by up to 500MW.

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