SOUTHEAST ASIA: After decades of producing fossil fuels that have contributed to the climate crisis, Malaysia and Indonesia are turning to a new role—storing carbon dioxide underground.
According to a recent article from Climate Change News, this ambitious strategy, led by state-owned oil companies and supported by governments, could make the region a key player in the global effort to mitigate the impacts of climate change. However, as this plan moves forward, it raises significant questions about its environmental impact and role in prolonging fossil fuel use.
A growing network of carbon storage agreements
Malaysia’s state-owned oil company, Petronas, has entered into at least 24 memoranda of understanding (MOUs) with nine countries, including major emitters like Japan and South Korea. These agreements would involve storing carbon dioxide (CO2) emissions from these nations in depleted oil and gas fields off Malaysia’s west coast and Borneo Island. The goal is to use the region’s abundant, yet exhausted, oil and gas reservoirs to store CO2 from industrial activities in a bid to combat climate change.
Petronas has set ambitious targets for its carbon capture and storage (CCS) efforts. By 2030, the company aims to store 15 million tonnes of CO2 annually, the equivalent of Senegal’s annual emissions. To meet this goal, Petronas plans to build three CCS hubs and two flagship projects, signalling a massive investment in decarbonization.
Carbon colonialism: A controversial approach
Despite the technological promise of CCS, environmentalists are voicing concerns about a phenomenon they’ve dubbed “carbon colonialism.” Activists argue that these cross-border storage deals effectively allow high-emitting countries to continue burning fossil fuels while shifting the responsibility for carbon storage to lower-income nations. The practice mirrors historical trends of the Global North outsourcing its environmental burdens to the Global South, critics argue.
“Wealthy, high-emitting countries get to keep burning fossil fuels while offloading their carbon onto nations that have done far less to cause the crisis,” said Sisilia Nurmala Dewi, a team lead at 350.org Indonesia. This criticism underscores the growing backlash against the transfer of carbon emissions from wealthier nations to poorer ones, potentially exacerbating global inequalities.
Risks and rewards of carbon storage
While CCS is touted as a crucial technology for mitigating emissions from sectors that are hard to decarbonize, such as cement and steel production, its effectiveness and safety are not without risks. Experts warn that the high costs and technical challenges of capturing and storing CO2 underground could undermine the overall viability of these projects. There are concerns about leaks from storage sites, with historical examples like Norway’s Sleipner project highlighting the unpredictable nature of long-term CO2 storage.
The complex geology of Southeast Asia, including Malaysia and Indonesia, poses additional risks. Experts caution that the region’s varied underground conditions may lead to unforeseen issues, such as leaks or storage failures. Furthermore, the capacity to safely store carbon in depleted oil fields is still largely unproven on the scale required for these large projects.
Local impacts and global ambitions
The debate over CCS extends beyond environmental concerns to include issues of local impact. The Kasawari gas field off Malaysia’s Sarawak coast, which is poised to become one of the world’s largest offshore CCS facilities, exemplifies these tensions. While the project is expected to capture and store 3.3 million tonnes of CO2 annually, this would only reduce Petronas’ emissions by a modest 1%.
Locally, the project has faced criticism for a lack of transparency and consultation with affected communities. Environmental groups have raised concerns about potential risks to local fishing industries and the broader ecological health of the area. “The environmental impact assessment for Kasawari was approved with absolutely no consultation,” said Meenakshi Raman, president of the environmental justice group Sahabat Alam Malaysia.
These concerns are compounded by reports showing that CCS plants often fail to meet their emissions reduction targets, with real-world capture rates typically around 50%, far below the 90% goal often touted by proponents. This discrepancy could undermine the credibility of CCS as a viable solution to the climate crisis, leaving many to question whether these investments are diverting resources from more effective climate action.
Balancing fossil fuels and sustainability
Both Malaysia and Indonesia view CCS as essential for achieving their net-zero goals, even as they continue to rely on fossil fuels. For example, Indonesia has set a target to retrofit 76% of its coal-fired power plants with CCS technology by mid-century. However, as the region builds out its CCS infrastructure, it must navigate the delicate balance between fostering fossil fuel dependence and embracing sustainable energy solutions.
While these projects are poised to attract billions of dollars in investment, the long-term success of CCS in Southeast Asia remains uncertain. As Japan and South Korea look to Malaysia and Indonesia to store their excess carbon, the countries’ willingness to take on these high-risk projects could either position them as key players in the global fight against climate change or reinforce the ongoing reliance on fossil fuels—delaying the transition to a truly sustainable future.