Economic Viability and Policy Imperatives of Carbon Capture, Utilisation and Storage in Indonesia’s Pathway to Net-Zero Emissions

Anthropogenic climate change, driven primarily by the intensification of greenhouse gas emissions since the Industrial Revolution, continues to pose significant environmental and socio-economic challenges.Among the most promising mitigation strategies is carbon capture, utilisation and storage (CCUS), which facilitates the reduction of carbon dioxide (CO) emissions by capturing CO from large point sources and storing it in geological formations, such as depleted oil and gas reservoirs.In some configurations, CCUS has also been employed to enhance hydrocarbon recovery.While the technology is widely recognised for its potential to contribute to decarbonisation goals, particularly in fossil fuel-dependent economies, its large-scale deployment remains constrained by considerable economic and regulatory barriers.In Indonesia, a country with ambitious commitments to achieve net-zero emissions by 2060 but a continued reliance on fossil energy, CCUS is increasingly being considered a strategic pathway for transitioning the energy sector toward sustainability.This study undertakes a systematic review of existing and near-operational CCUS initiatives globally, with a focus on economic performance, cost structures, and policy frameworks.Evidence from the literature suggests that although CO-enhanced oil recovery (CO-EOR) can yield short-term productivity gains, the high capital and operational expenditures associated with CCUS systems often undermine their economic feasibility in the absence of supportive policy instruments or carbon pricing mechanisms.Furthermore, the lack of integrated regulatory frameworks and stakeholder coordination has been identified as a critical barrier to progress in Indonesia.It is therefore argued that a comprehensive national strategy is required-one that aligns with Article 6 of the Paris Agreement and incorporates targeted subsidies, regulatory clarity, and inter-sectoral collaboration among emitters and storage providers.The analysis underscores the necessity of embedding CCUS into Indonesia's long-term decarbonisation roadmap through an approach that balances environmental obligations with economic pragmatism.