Jakarta, June 25, 2024 – The decarbonization of the electricity sector and the limitation of nickel production in Sulawesi, in line with the renewable energy capacity available in Sulawesi, which is currently the center of Indonesia’s nickel industry, must be carried out immediately to avoid a worsening climate crisis.

Electric vehicles, promoted as a means to reduce carbon emissions in Indonesia, have led to numerous social and environmental issues. Issues include the impact on indigenous communities near the industry, labor concerns, and particularly the double burden on women.

These issues were the focus of a discussion organized by Action for Ecology and Emancipation of the People (AEER) titled “Decarbonization and Projections for Electric Vehicles in Indonesia,” held in Jakarta (25/06). Speakers included Arianto Sangadji, AEER Research Advisor, Andreas Tobing, Gotion Indonesia, and Pius Ginting, AEER Coordinator.

The Indonesian government has adopted a decarbonization approach as part of global efforts to reduce carbon dioxide and other greenhouse gas emissions. Measures include initial commitments at climate change conferences, drafting national action plans, and committing to renewable energy and energy transition, although targets have not been met. In the decarbonization and energy transition strategy, nickel is designated as a critical mineral component, particularly in the production of batteries for electric vehicles and energy storage.

In the context of decarbonization in the nickel downstream industry in Sulawesi, to meet the needs of all smelters consisting of 119 pyrometallurgical smelters and 27 hydrometallurgical smelters by 2026, the saprolite nickel ore with a grade below 1.5% is projected to last only about 5 years until 2028. Meanwhile, limonite nickel ore reserves are expected to last up to 13 years.

The availability of renewable energy technologies such as solar, wind, and hydroelectric power in the Sulawesi region offers great opportunities to replace coal with more environmentally friendly alternatives. Sulawesi has significant renewable energy potential, including 11 GW of wind, 27 GW of solar, 5 GW of hydro, and 3 GW of geothermal. The total renewable energy capacity is 45 GW, capable of generating 119 TWh of electricity, which is 78% of Sulawesi’s energy needs of 153 TWh by 2060 (Draft RUKN Ministry of Energy and Mineral Resources 2023). This leaves a 22% shortfall from the projected energy needs not supplied by renewable energy. Mineral production levels in the Sulawesi region should be limited to the renewable energy carrying capacity.

Pius Ginting stated that limiting mineral production in Sulawesi based on the carrying capacity of renewable energy would achieve greater environmental sustainability, as production could be conducted within environmental limits, and the lifespan of renewable energy infrastructure could be controlled, preventing stranded assets due to rapidly depleted processed minerals.

Arianto Sangadji noted that Indonesia is a key player in global nickel production. In 2023, Indonesia mined 1.8 million tons of nickel ore, accounting for 50% of the world’s total nickel mining. All this nickel production is to supply the domestic nickel processing industry. In the future, Indonesia will remain a key player in the nickel industry, with 55 million tons of nickel reserves, or 42.32% of the world’s total nickel reserves.

However, at the upstream level, ecological impacts accumulate related to deforestation, water pollution, and flooding around the nickel industry area. Additionally, industrial waste disposal is a significant issue, with approximately 1.5 tons of waste generated per ton of processed nickel. Currently, a 600-hectare site in Morowali is used to accommodate industrial waste.

In addition to environmental impacts, social impacts also occur in the nickel industry. Labor issues, including a lack of worker safety guarantees and minimal protection for female workers, as well as human rights concerns for communities around the industry, are often overlooked in this industry’s growth.

“We want progress, but at the same time, indigenous communities are marginalized. Therefore, industrial development must consider just transition principles that prioritize the welfare of communities, including workers,” said Arianto Sangadji.

The Indonesian government, through various policies, is trying to increase the use of electric vehicles. The target increase for electric vehicles in Indonesia aims to accelerate the country’s transition to environmentally friendly energy, a government commitment to achieving net-zero carbon emissions by 2060.

Andreas Tobing of Gotion Indonesia mentioned that Indonesia has currently achieved 0.37% of its target for 13 million electric motorcycles by 2030, 0.75% of its target for 2 million electric cars by 2030, and 0.51% of its target for electric buses by 2040.

Thus, the growth of electric vehicles expected by the government is crucial to ensuring that the downstream nickel industry does not lead to increased exploitation of natural resources and further social and environmental damage and to improving access to electric vehicles for the benefit of the majority of Indonesians.