Indonesia Ministry of Energy and Mineral Resources issues regulation on implementation of carbon capture and storage
On 2 March 2023, the Indonesia Ministry of Energy and Mineral Resources (“MEMR”) issued Regulation No. 2 of 2023 concerning Implementation of Carbon Capture and Storage as well as Carbon Capture, Utilization and Storage in Upstream Oil and Gas Business Activities (“MEMR 2/2023”).
MEMR 2/2023 focuses on the following:
- Technical: MEMR 2/2023 contains technical rules on capturing, transporting, injecting, storing, measuring, reporting, and verifying carbon.
- Business scenario: MEMR 2/2023 regulates business cases in the context of cooperation contracts in oil and gas working areas.
- Legal: MEMR 2/2023 provides for carbon capture and storage (“CCS”) as well as carbon capture, utilisation and storage (“CCUS”) activities as part of the plan of development within a cooperation contract framework. It also implements a requirement for monitoring to be carried out for 10 years after the CCS/CCUS activities has ended.
- Economic: The implementation of CCS/CCUS may be carried out with funding from other parties. MEMR 2/2023 also provides for the potential for carbon credit monetisation.
