A new analysis from the Center of Economic and Law Studies (Celios) challenges this direction, branding Carbon Capture Storage(CCS) as a costly and ineffective solution when compared to renewable energy alternatives.
Jakarta — As Indonesia seeks to address its significant carbon emissions, the government has promoted Carbon Capture Storage (CCS) as a vital component of its energy transition strategy. However, new analysis from the Center of Economic and Law Studies (Celios) challenges this direction, branding CCS as a costly and ineffective solution when compared to renewable energy alternatives. Celios argues that the high costs and risks associated with CCS could hinder Indonesia’s shift to clean energy, which the country urgently needs to meet its emission reduction targets.
RELEVANT SUSTAINABLE GOALS
CCS – A false Solution to Emission Reduction ?
Bhima Yudhistira, Executive Director of Celios, has raised concerns about the Indonesian government’s reliance on CCS technology, describing it as a “false solution” to carbon reduction. He contends that CCS primarily serves to extend the life of fossil fuel industries rather than advancing genuine energy transition efforts.
Yudhistira argues that government policy should prioritize renewable energy investments, which offer cleaner and more cost-effective options for power generation. “The government should encourage industries to shift to clean energy,” he stated in a recent public discussion in Jakarta. According to Celios, the investment required to implement CCS in Indonesia’s coal-fired power plants significantly outpaces that of renewable energy sources, particularly solar power.
The High Cost of Carbon Capture Versus Renewable Energy
Data from Celios reveals a stark contrast in the costs associated with CCS and solar power investments. The investment needed for CCS implementation in coal-fired power plants is projected to reach over Rp 30.2 million per kilowatt hour (KWh) in 2020, with a decrease to Rp 22 million/KWh anticipated by 2050. In contrast, the investment required for utility-scale or industrial-scale solar power plants is projected to be around Rp 6 million/KWh by 2050.
“The economic feasibility of CCU (carbon capture utilization) remains questionable,” Yudhistira noted. He emphasized that CCS should be reconsidered, given the comparatively lower costs and environmental benefits associated with renewables. In his view, a strategic shift toward renewables would yield more sustainable results while sparing the nation the significant financial burden of CCS technology.
Beyond financial considerations, Celios also raised safety concerns about CCS technology. Yudhistira pointed to potential hazards posed by pipeline leaks, citing an incident in the United States where a CCS pipeline leak led to 40 individuals being hospitalized. For Indonesia, which sits on the Pacific Ring of Fire and is prone to earthquakes, these risks are amplified.
“If we store carbon underground here, the maintenance costs to prevent leakage would be extraordinarily high. Who would be responsible for covering these expenses?” he asked, highlighting the financial and logistical challenges of safely implementing CCS in a seismically active region.
Government Commitment to CCS Despite High Costs
Despite these criticisms, the Indonesian government remains committed to exploring CCS technology. Former Minister of Energy and Mineral Resources Arifin Tasrif has acknowledged the high costs associated with CCS but has expressed a belief in its potential. “The current implementation plans for CCS/CCUS are expensive, but we need to give it a try. New technologies are always costly at the outset,” Tasrif said in a statement earlier this year.
Tasrif cited ongoing CCS projects in Indonesia, including one in the Gundih natural gas purification facility in East Java, which costs between $43 and $53 per ton of CO₂, with an annual injection of 0.3 million tons of CO₂. The project carries a total investment cost of $105 million. Other projects include the Bintuni LNG production facility in West Papua, costing $33 per ton of CO₂ for 2.5 to 3.3 million tons per year, and the Masela LNG production in East Nusa Tenggara, costing $26 per ton of CO₂ for 3.5 million tons annually.
Despite these cost and risk factors, Indonesia’s government maintains that CCS can play a role in reducing the country’s carbon footprint, as Indonesia ranks among the top global emitters. CCS proponents argue that it represents a necessary, albeit costly, stopgap technology that can help address emissions from sectors where renewable alternatives are less feasible. The government’s commitment to CCS underscores a larger debate: is CCS a sustainable solution, or should investments prioritize clean energy sources with clearer economic and environmental benefits?
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