Cost–benefit evaluation of membrane technology for carbon emission reduction in Indonesia

Abstract

This study investigates the financial viability of membrane technology in mitigating CO2 emissions in the oil and gas industry in an Indonesian context. A model calculation is presented with the for a sample company (company X) but provide a global perspective regarding membrane technology when considering different scenarios of costs (of carbon capture) and savings (through decreased carbon costs) to reconciling environmental and economic goals. Company X decreased its CO2 emissions from 34 to 12%, using CO2 membrane technology on its daily production corresponding to an annual emission reduction of 7,095,666 tons of CO2. As a result of the carbon reduction, the annual carbon tax decreased significantly from 14,191,333 to 4,943,782 USD yielding annual cost savings of 9,247,551 USD. However, considering the high costs of the technology, and the low Indonesian carbon tax rates in an international context, this investment does not pay back solely from a carbon cost reduction perspective. When considering higher carbon cost scenarios, like in China, the EU and the US (California), that may be the future direction for Indonesia, as well, results indicate that the membrane technology delivers a financial payback already (especially at the carbon price levels of the EU and California). The study discusses the potential future directions in Indonesian carbon pricing and the decrease of membrane technology costs through technological developments, as well as other benefits of the membrane technology.