Need Large Funds, Minister Of Energy And Mineral Resources Encourages ASEAN Countries To Have An Energy Transition Funding Scheme

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif encourages ASEAN countries to have a funding scheme for the realization of the energy transition. Based on data from IRENA, the need for funds for the New Renewable Energy mix (EBT) in ASEAN to reach 100 percent in 2050 is 29.4 trillion US dollars

"This amount of investment is intended for the development of EBT power plants, the provision of electricity transmission networks, biofuels, the development of the electric vehicle ecosystem," said Arifin at the ASEAN Chairmanship 2023 Side Event, "Sustainable Energy Financing and Mobility of Energy Investment and Advancing CCUS Implementation for Energy Security in ASEAN", quoted Thursday, August 24.

According to him, there are several funding scenarios that can be applied, such as blended finance.

"The form can vary, such as grants, soft loans with favorable requirements, and mutual investment," said Arifin.

Then through Public-Private Partnerships, namely collaboration between private governments.

Next is by utilizing International Funding such as climate change funds that can be used for the development of potential clean energy resources.

Furthermore, Arifin explained, the ASEAN region must be a conducive area for investors to invest through support in fiscal policies, such as tax incentives to encourage investment in renewable energy projects and energy saving technology.

ASEAN countries must also have a clear policy framework, including in the preparation of long-term energy regulations.

"Investment Procedure Transparency as included in the licensing process through the online system can increase investor interest," said Arifin.

Arifin stated that the energy transition still requires fossil energy. For this reason, the application of Carbon Capture Utilization and Storage (CCUS) technology is an important key, because for ASEAN countries industrial development is very important.

"CCUS technology is very important for mitigating carbon emissions from challenging industries to decarbonize including the oil and gas industry," said Arifin.

Just so you know, Indonesia is one of the countries that has a large CO2 storage capacity. So far, the capacity has reached 12 billion tons.

Currently, 15 CCS/CCUS projects are being worked on or have entered the study stage.

In terms of regulation, the Indonesian government has also anticipated the application of CCS/CCUS technology with the issuance of Minister of Energy and Mineral Resources Regulation Number 2 of 2023 concerning the Implementation of Carbon Arrest and Storage, as well as the Arrest, Utilization and Storage of Carbon in Upstream Oil and Gas Business Activities. In addition, the regulation governing the implementation of CCS/CCUS cannot only be carried out in the oil and gas sector.

Arifin also encouraged the rules for playing CCS/CCUS across countries to be also formed.

"Rules are needed to regulate the implementation of CCS Hubs outside the oil and gas working area, and open cross-border transportation allows cross-border emissions," said Arifin.