On 13 June 2025, Singapore and Indonesia signed three Memoranda of Understanding (“MOUs“) on Cross-Border Electricity Trade (“CBET“), Carbon Capture and Storage (“CCS“), and Sustainable Industrial Zone (“SIZ“). These documents are part of a continuing shift toward regional energy integration and present substantial opportunities for energy and infrastructure sector participants.
- CBET MOU: This builds on the past MOUs on energy cooperation between Singapore and Indonesia. Both countries will aim to facilitate the necessary policies, regulatory frameworks and business arrangements for CBET within 12 months of the signing of the MOU.
- CCS MOU: A joint Working Group will be set up to study components of a legally-binding G2G agreement on CCS. The G2G agreement will be necessary to enable cross-border CCS projects to be implemented.
- SIZ MOU: A joint Taskforce will study the development of potential industries within the SIZ in Bintan, Batam and Karimun (BBK). This MOU underscores both countries’ commitment to providing regulatory clarity for renewable energy initiatives, paving the way for further investment opportunities in Indonesia.
In the Speech by Minister-in-charge of Energy and Science & Technology Tan See Leng at the MOU Signing Ceremony in Indonesia, key points highlighted include:
- Cross-border electricity trading: These projects can potentially attract significant capital investment, generate foreign exchange earnings, and increase annual tax. Both countries are paving the way for a more connected ASEAN Power Grid and a more secure and sustainable energy future.
- Cross-border CCS:CCS is necessary for the decarbonisation of hard-to-abate economic activities in both Singapore and Indonesia. With Southeast Asia’s capacity to store up to 133 gigatonnes of CO₂, Singapore’s 2-million-ton-per-year project could serve as a model for Indonesia’s ambition to lead the region as a CCS hub.
- SIZ MOU: This builds on the many years of cooperation between Singapore and Indonesia to attract investments into BKK. The MOU demonstrates a joint effort to continue this cooperation, specifically in energy and carbon collaboration projects which are expected to catalyse further industrial activities in Indonesia
Under these MOUs, further clarity on the policy and regulatory framework on cooperation on low-carbon and energy resilience between Indonesia and Singapore can be expected. Companies planning for early moves in such industries can reach out to our team.
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