In a press release posted on its website on 15 February 2024, the Ministry of Trade and Industry Singapore announced that Singapore and Indonesia have signed a Letter of Intent ("LOI") to work together on cross-border carbon capture and storage ("CCS"). This follows the issuance on 30 January 2024 of Indonesia's presidential regulation on CCS allowing CCS operators to reserve storage capacity for foreign carbon dioxide. Click here to read our Legal Update on Indonesia's regulatory framework on CCS.
CCS involves capturing, transporting and storing carbon dioxide that is produced as a byproduct from other activities, such as power generation. The carbon dioxide that is captured will therefore not be released into the atmosphere. CCS provides a pathway to decarbonise hard-to-abate sectors such as energy and chemicals (E&C) and power sectors, and is one of the key tools to achieve both countries' respective net-zero emission targets to mitigate the effects of global warming.
The LOI, the first of its kind in Southeast Asia, reflects the commitment of both countries to achieve regional decarbonisation outcomes in a sustainable manner.
A working group will be formed to develop a legally binding bilateral agreement relating to the details of the cross-border CCS cooperation.
