American oil giant ExxonMobil has announced plans to invest up to $15 billion in Indonesia for carbon capture and storage (CCS) and a petrochemical refinery. A memorandum of understanding (MoU) for the project was signed in Jakarta on Wednesday, solidifying ExxonMobil's commitment to advancing Indonesia’s industrial and sustainability goals.

Senior Minister Airlangga Hartarto emphasized the transformative potential of ExxonMobil’s investment, stating, “This project is expected to deliver a significant impact on various sectors in Indonesia. It will create jobs and demonstrate a commitment to sustainability. This CCS technology is capable of absorbing 90 percent of emissions from industrial sources.”

The petrochemical facility will focus on producing plastics and supporting Indonesia’s value-added processing initiatives, while the CCS facility aims to capture and store emissions deep underground in geological formations. The initial investment for both projects is projected at $10 billion, with the total eventually reaching $15 billion, according to Airlangga’s aide, Susiwijono Moegiarso.

Once operational, the CCS facility is expected to store 3 million tons of carbon dioxide annually, making it the first large-scale CCS facility in Indonesia and potentially the largest in Southeast Asia. ExxonMobil is considering the Sunda-Asri basin in the Java Sea for the CCS site. Meanwhile, the petrochemical refinery is likely to be built on Java Island, within 100 kilometers of the CCS facility, as ExxonMobil looks for a 500-hectare land parcel to accommodate the facility.

To ensure smooth project execution, a joint task force between the Indonesian government and ExxonMobil will be established. This collaboration is expected to streamline decision-making and implementation processes.

The groundwork for this massive investment was laid during a 2023 meeting between then-President Joko “Jokowi” Widodo and ExxonMobil chairman Darren Woods in San Francisco. Jokowi had previously revealed ExxonMobil’s plans to invest in a green petrochemical refinery and CCS technology in Indonesia, describing the CCS facility as a landmark project for the region.

This investment aligns with Indonesia’s drive to attract foreign direct investment (FDI). The Indonesian government reported $2.8 billion in FDI from the U.S. during January-September 2024, making the U.S. the country’s fourth-largest source of FDI. ExxonMobil’s substantial commitment further underscores the strong economic partnership between Indonesia and the U.S.

The petrochemical and CCS initiatives will play a critical role in advancing Indonesia’s sustainability efforts and boosting its industrial capacity, paving the way for a greener and more resilient future.