27 March 2024

On 15 February 2024, Singapore and Indonesia announced that they have signed a letter of intent (“LoI”) to collaborate on cross-border carbon capture and storage (“CCS”), with work underway for a legally binding agreement to enable transport and storage of carbon dioxide between both countries. This comes after Indonesia issued Presidential Regulation 14/2024 on 30 January 2024 to allow CCS operators to set aside 30% of their storage capacity for imported carbon dioxide. For more information on Presidential Regulation 14/2024, please read “Indonesia issues presidential regulation on carbon capture and storage” by our associate firm in Indonesia, AGI Legal. 

CCS is the process of capturing, transporting, and storing the 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 emissions from hard-to-abate sectors such as energy and chemicals, and power. 

The LoI affirms the importance of CCS to both countries as a decarbonisation pathway, and underscores the potential of CCS to enable sustainable industrial activities and generate new economic opportunities. A working group comprising Singapore and Indonesia government officials will work towards a legally binding bilateral agreement that will enable the cross-border transport and storage of carbon dioxide between Singapore and Indonesia. 

Reference materials 

The joint press release on this development is available from the website of the Singapore Ministry of Trade and Industry www.mti.gov.sg.