Indonesia restricts non-green energy smelter projects, and new ferronickel and stainless steel projects may be affected
Post Time: 2023-01-17
According to foreign media on January 17, 2023, the Indonesian government will limit the number of smelter projects without clean energy plan or without environmental protection. This restriction is designed to meet the growing demand for environmental protection products in the global market.
Bahil Lahadalia, Minister of Investment/Head of the Investment Coordination Committee (BKPM), said that this would show the government’s commitment to supporting green energy and industrial development.
“In the future, we will limit the construction of non-green energy-oriented smelters “
Bahlil said on Friday.
Limiting smelter projects without clean energy plans is part of the industrialization of battery and electric vehicle (EV) raw materials, which will become the pillar of Indonesia’s future. The government is also studying the possibility of integrating the upstream and downstream of nickel, bauxite, copper and tin industries into an important part of the battery and electric vehicle industries. Consumers are now paying close attention to the environmental problems in the production of raw materials for batteries and electric vehicles, prompting global electric vehicle manufacturers to calculate the amount of carbon they emit from the supply chain.
Consumers of electric vehicles are often very picky. They will question, for example, the source of aluminum used for body, chassis and battery components. They require that these parts be environmentally friendly. They will also question the power source used to power smelters that process raw materials, so some smelters prefer renewable energy power plants. For example, the nickel smelter owned by PT Anugah Tambang Smelter (ATS) in the Palu Special Economic Zone (SEZ) in central Sulawesi obtained 170 megavolt ampere (MVA) electricity from the renewable energy power plant of PT Perusahaan Listrik Negara (PLN), with a transaction value of 600 million dollars.
Adaro Green Aluminum Smelter, located in Indonesia’s Green Industrial Zone in North Kalimantan Province, is expected to be put into operation in 2024. The green concept aluminum smelter has an investment of 800 million US dollars. Later, in the production phase, the aluminum smelter owned by PT Adaro Energy Tbk (ADRO) will utilize the power generated by the hydro power plant (PLTA) and the solar power plant (PLTS). The building also meets the modern standards of environmental protection.
At present, by 2024, the existing 53 mineral smelter projects will be put into operation. These processing facilities really need a lot of power supply. The power demand of dozens of nickel, bauxite, copper, iron, manganese, lead and zinc smelters may be as high as 5.6 gigawatts (MW). The environmental problems that plagued domestic power plants used to power smelters also limited financing opportunities. Recently, many financial institutions objected to providing loans for projects using coal-fired power plants, which are the most common type of power plants in Indonesia.
