Indonesia Mulls Tapping Danantara for Carbon Storage Project

1 week ago 10

October 7, 2025 | 04:09 pm

TEMPO.CO, Jakarta - The Indonesian government believes the sovereign wealth fund Danantara could be involved in the carbon storage business, as the state moves to develop carbon capture and storage (CCS) technology. According to Nurul Ichwan, the Deputy for Investment Promotion at the Investment Coordinating Board (BKPM), Danantara has a strategic interest in projects listed as a National Strategic Project (PSN) list, particularly in the clean energy sector.

"I believe Danantara has a stake in this because one of its missions is driving the national strategic projects forward," he said on Tuesday, October 7. "Of course, on the condition that the project is financially beneficial."

He explained that the CCS project is a key part of the government's efforts to bolster Indonesia's competitiveness at a global level. A country capable of producing clean energy, he said, will have a strategic position in the global green economy.

But the investment opportunity will first be analyzed by the Ministry of Investment, based on value, capacity, and its economic and environmental impacts. If viewed positively, the proposal will be forwarded to Danantara for a more in-depth study.

"Usually, Danantara will study its financial aspects, invite relevant parties, and conduct studies to decide whether to invest," he said.

Nurul added that the coordination between the Ministry of Investment and Downstreaming and Danantara is running smoothly, especially since both institutions are led by the same person, Rosan Roeslani.

Indonesia has been promoting CCS and carbon capture, utilization, and storage (CCUS) projects to capture emissions from fossil-based power plants, while also opening up business opportunities for carbon storage for other countries. The government estimates that Indonesia has a carbon storage capacity of up to 577.62 million tons, which can be offered to many countries.

Farah Heliantina, the Assistant Deputy for Energy Transition at the Coordinating Ministry for Economic Affairs, said building a carbon storage ecosystem by 2050 would require at least US$2.4 trillion. This amount is necessary to support the net zero emission target by 2060. "Collaboration between the government, private sector, and the public is key to accelerating the energy transition," she said on Saturday, January 18, 2025.

To attract investments, the government has prepared various regulations and incentives, two of which are Presidential Regulation Number 14 of 2024 and Minister of Energy and Mineral Resources Regulation Number 16 of 2024, which regulate carbon capture and storage activities. The provisions cover the designation of the injection target zone (ZTI), exploration permits and storage operation, carbon transport, and storage auction procedures.

In terms of security, the government has included steps to mitigate the risks of ZTI leakage and its impacts on the environment and society.

Avit Hidayat contributed to the writing of this article.

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