Decarbonizing the Nickel Industry in Indonesia

Indonesia, a key player in the nickel industry, is expanding its production of both low-grade nickel for stainless steel and high-grade nickel for electric vehicle batteries. This growth, however, is marred by the high emissions associated with nickel metallurgical processing, powered by captive coal-fired power plants. This stands in stark contrast to Indonesia’s decarbonization targets and the demand for sustainable practices in the global battery supply chain.

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The Challenge
The development of Indonesia’s metallurgical nickel sector presents a contradiction: the ambition to grow this sector is at odds with the nation’s decarbonization goals. Moreover, Indonesia’s nickel, currently competitive due to cost, may see this edge wane as cleaner production gains priority globally, making cost less pivotal in the long term. The economic rationale for using fossil fuels in nickel production may help Indonesia retain its market position in the short term but could prove detrimental as the industry shifts towards sustainability.

To reconcile these divergent strategies and foster enduring growth in the nickel industry, a well-crafted decarbonization roadmap is imperative.

Decarbonization Solutions
Our study investigates the various nickel processing routes and industrial hubs in Indonesia, alongside the country’s renewable energy sources, to uncover avenues for producing sustainable nickel. We have developed a high-level decarbonization pathway for two case scenarios:

  1. A brownfield rotary kiln electric furnace plant for low-grade nickel products.
  2. A greenfield high-pressure acid leaching process for high-grade nickel products.


Policy and Regulation
Indonesia’s potential for clean energy is immense, but the shift away from inexpensive coal necessitates decisive action from policymakers. The next steps proposed in this study include tightening coal power plant regulations, creating investment incentives, and establishing a green nickel certification program.

In Summary
This study shows Indonesia’s significant potential to pioneer a greener nickel industry by harnessing its vast renewable energy resources. Embracing innovative and clean practices could support the nation long-term economic growth while adhering to its decarbonization commitments. The synergy of concerted efforts from both public and private sectors is pivotal in realizing this vision.