Nickel downstreaming is often hailed as the backbone of the global energy transition, specifically for electric vehicle (EV) battery production. However, a recent report from CREA reveals a startling fact: 83% of Indonesian nickel is not destined for electric vehicles.
Not for EVs, but for Stainless Steel
There is a widespread public assumption that every new nickel mine or smelter is directly linked to the green energy ecosystem. In reality, only about 17% of Indonesia's nickel actually enters the EV supply chain. The vast majority (83%) is utilized for the stainless steel industry.
Ironically, much of this stainless steel supplies the manufacturing of internal combustion engine (ICE) vehicles, which remain fossil-fuel dependent. This indicates that our nickel remains tightly bound to the old carbon economy rather than being fully integrated into a green future.
The Irony of "Green Nickel" and Coal Power
The growth of the nickel industry in Indonesia is currently heavily supported by captive coal-fired power plants (PLTU) dedicated coal plants located within industrial zones. Katherine Hasan, an analyst from CREA, emphasizes that decoupling the nickel industry from coal is a vital strategic move. Without decarbonization, Indonesia's claim of producing "green nickel" will struggle to gain international market acceptance.
The Threat of Global Emission Standards
The world is rapidly moving toward stringent emission standards. Policies such as the European Union’s Carbon Border Adjustment Mechanism (CBAM) now require transparent carbon footprint reporting. If Indonesian nickel production remains high-emission, our products risk being excluded from high-value global supply chains.
Indonesia must immediately pivot toward renewable energy in its mineral processing. This shift is not just an environmental necessity but a critical economic strategy to ensure the "Indonesia Gold 2045" vision does not miss out on the global clean energy market.
Want to learn more? Read the full report: “Indonesian Nickel: Targeted for EV, but still parked in stainless steel” at this link
