In Indonesia, an area the size of Singapore has already been deforested to supply the nation’s booming nickel industry, and eight times that amount of forest could be under threat, according to a report released Thursday.

A report from US-based Mighty Earth said 500,000 hectares of forest is under threat with over 75,000 ha already gone, potentially driving up CO2 emissions while putting ecosystems and biodiversity at risk.

Indonesia’s vast and growing nickel industry is blamed for a large portion of the country’s carbon emissions owing to the energy intensity of its processing and the specially built coal-fired power plants used for the process.

It has now overtaken palm oil as the leading cause of deforestation across the archipelago as Jakarta works to turn the country into a battery processing powerhouse.

“The rate of deforestation is likely accelerating with [Radar for Detecting Deforestation – RADD] alerts showing more than twice as much forest clearance in 2023 than alerts showed in 2020,” said the report, which Mighty Earth co-authored with Brown Brothers Energy and Environment.

As well, some of the deforestation has been carried out illegally, and without seeking free, prior, and informed consent (FPIC) from local communities.

“Our investigation also suggests the clearing may defy the law, imperiling not just people but wildlife that depend on standing forests,” said Amanda Hurowitz, senior director of forest commodities with Mighty Earth.

“In leading the global shift towards electric vehicles, companies like Ford, Tesla, BMW, and Hyundai must do so in a way that does not jeopardise people and nature. We urgently need global automakers to get control of their supply chains back to the nickel mines to stop deforestation and the destruction it brings to people and nature.”

The report noted a series of actions, from utilising the US Inflation Reduction Act to EU rules and Indonesia’s own forestry guidelines, to ensure more protection of forests and biodiversity hotspots.

Indonesia holds one-fifth of the world’s nickel reserves, and is the largest producer, but in recent years and with Chinese backing it has moved from simple extraction to more valuable, but emissions-intensive processing.

“The lower grade nickel produced in Indonesia leads to deforestation, as new areas of critical forests are cleared by nickel strip mines,” the report said.

Indonesian President-elect Prabowo Subianto has been clear he sees a local nickel and battery supply chain as critical to sovereignty and industrialisation, although critics say his protectionist views extend to the nation producing enough biofuel locally for all its needs, something viewed as an impossible task.

The Mighty Earth report said coal-fired power for nickel alone is now greater than all that used in Pakistan. Crucially, this emissions source is left off Indonesia’s official emissions count and plans for reduction by 2030 under its commitments to the Just Energy Transition Partnership.

FORESTS DECIMATED

Mighty Earth looked at 329 nickel concessions listed by the relevant authorities and highlighted 25 where the greatest amount of deforestation has taken place.

“Of the 25 concessions we looked at in detail, six are 75% High Carbon Stock (HCS) forest or higher meaning these concessions contain significant amounts of intact forests,” the report said.

“Fourteen are about 50% or less High Carbon Stock Forest meaning that they mainly contain substantial amounts of degraded land.”

“At least 10 of the top 25 deforesting nickel mines have cleared Production Forests (which are set aside for forestry uses) without the legally required Borrow and Use Permit (more recently known as a Forest Area Use Permit). 6,600 hectares of production forest have been illegally cleared by these 10 mines.”

WAYS TO IMPROVE

Mighty Earth said that while the mining of nickel in Indonesia is not just inevitable but necessary, deforestation is not.

Electric vehicle producers must start implementing greater supply chain transparency, it said.

“The area of Indonesia affected by nickel mining is home to a dizzying array of endemic species like anoas (miniature buffalo); the babirusa (“pig deer” in Indonesian) with long curved upper tusks; the critically endangered maleo bird, which uses geothermal vents to incubate eggs; and 17 different species of macaque monkeys and tarsiers. Deforestation remains the primary factor in the loss of species in Indonesia.”

However, the report did see a way forward using existing Indonesian and foreign laws, stressing the need to uphold FPIC requirements, including the right to withhold consent to the development of nickel infrastructure.

The government should examine potential illegal mining more closely and the breaking of any forestry laws, and only award new mining concessions on already degraded land, it added. Mining companies should also rehabilitate land.

A moratorium on new coal-fired plants should also come into force, said the US group.

“We strongly encourage all actors to join the Initiative for Responsible Mining (IRMA) and adopt its standards. IRMA is the only independent third-party programme for assessing industrial-scale mine sites for all mined materials. It is governed equally by the private sector, communities, civil society, and workers.”

In the US, the Inflation Reduction Act (IRA) requires an audit by auto makers to ensure their customers can earn back a $3,750 rebate.

In the EU, battery regulation requires the same, and an audit of which mines may destroy biodiverse areas, and pressure “from manufacturers to their suppliers could encourage nickel mines to reform their practices or (as stipulated in the EU Battery Regulation) manufacturers could consider removing those mines from their supply chains”.

By Helen Clark – helen@carbon-pulse.com

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