Carbon Ambitions
Carbon capture, utilisation and storage (CCUS) is emerging as a critical technology for Southeast Asia's energy transition as the region balances increasing energy demands with climate commitments. This technology captures CO₂ emissions, which can then be stored underground or repurposed as manufacturing inputs.
The World Economic Forum estimates that global CCUS capacity must grow over 100-fold to reach 4-6 gigatonnes of CO₂ by 2050 to meet climate goals. For Southeast Asia, CCUS presents a significant opportunity due to its extensive geological storage potential and concentrated industrial emissions.
Indonesia leads the region's CCUS development with the first comprehensive regulatory framework established in 2023. A recent presidential regulation allows CCS operators to allocate 30% of their storage capacity for imported CO₂, positioning Indonesia as a potential regional hub. The country has begun construction on its first CCUS project in West Papua, with 14 additional projects in development, representing $8bn in investments.
Singapore, lacking domestic storage options, has partnered with Indonesia on cross-border carbon capture collaboration. The city-state has formed an industry consortium targeting 2.5 million tonnes of CO₂ sequestration annually by 2030, while planning a carbon capture pilot at waste-to-energy facilities by 2026.
Malaysia joined the regulatory movement by passing its CCUS Bill in March 2025, aiming to establish three CCUS hubs by 2030 with combined storage capacity of 15 million tonnes per annum.
Despite promising developments, significant challenges remain. CCUS costs in the region range from $60-$120 per tonne of CO₂ stored—potentially exceeding the projected carbon price of SGD50-80 by 2030 in Singapore. Technical expertise is largely concentrated in the oil and gas sector, while regulatory frameworks and carbon pricing mechanisms are still developing across most ASEAN countries.
Accelerating CCUS adoption will require policies combining financial support with strengthened cross-border agreements, and development of industrial CCUS hubs to share infrastructure costs. If effective, CCUS can help Southeast Asia achieve its climate commitments while supporting continued economic growth in emissions-intensive sectors critical to the region's development.
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