Indonesia issues CCS rules allowing 30% carbon storage from overseas

JAKARTA (Reuters) - Indonesia issued a presidential regulation on carbon capture and storage (CCS) which will allow CCS operators to set aside 30% of their storage capacity for imported carbon dioxide (CO2), the document showed on Wednesday.

The regulation, which took effect on Tuesday, said oil and gas contractors could utilise depleted reservoirs or aquifers in their blocks for CCS operations, which the government has said could potentially store over 400 gigatonnes of CO2 equivalent.

The Indonesian government would collect royalties from storage fees charged by the CCS operators.

CO2 stored for the CCS operations could come from emissions by upstream oil and gas activities, refineries, power plants and by industrial activities from Indonesia and overseas.

Companies which operated CCS could allocate 30% of their total carbon storage capacity for storage of carbon originating from abroad, the regulation added.

To store carbon from abroad, Indonesia would only allow emitters which had invested in the country, or which were affiliated with companies which had done so, and the government must have a bilateral agreement with the government where the emission originated from.

BP in November launched construction of a carbon capture, utilisation and storage project in West Papua province.

Indonesia's state energy firm Pertamina has agreed with U.S. oil majors Exxon Mobil and Chevron to discuss investment of CCS projects in Indonesia.

Energy ministry data shows there are 15 CCS and CCUS projects in various stages of preparation in the country with a combined investment of nearly $8 billion, including BP's project.

(Reporting by Fransiska Nangoy; Editing by Stephen Coates)