Jakarta, CNBC Indonesia – President Joko Widodo’s or Jokowi’s dream of developing nickel downstream in order to develop the electric car industry in the country is again being challenged. The challenge this time comes from the United States (US)
The US is known to be unfair to Indonesia Indonesia. Especially in terms of providing green subsidies for important minerals from Indonesia, namely nickel.
Through the new Inflation Reduction Rate (IRA) law, it is known that the US will provide a tax credit for the purchase of an electric car. However, it is feared that this incentive will not apply to electric cars with batteries containing nickel components from Indonesia.
Meanwhile, the reason is that Indonesia does not yet have a free trade agreement with the US and also the dominance of Chinese companies in the Indonesian nickel industry.
Regarding this challenge, President Jokowi will not remain silent. Indonesia will follow up through negotiations.
Bara Krishna Hasibuan, Special Staff of the Minister of Trade for International Trade Agreements, said that Indonesia would negotiate through the ongoing negotiations on the Indo-Pacific Economic Framework (IPEF) economic cooperation framework.
With these negotiations, the government hopes that the US can provide similar incentives to IPEF member countries, including Indonesia. “This was also conveyed by Indonesia to the United States during the Second Round of IPEF Negotiations in Nusa Bali, in March 2023,” Bara told CNBC Indonesia, quoted on Sunday (8/4/2023).
Bara stressed that Indonesia’s emphasis on the principles of equality and justice should be the foundation for cooperative relations between countries. It is this principle that is promoted and is the background of IPEF’s economic cooperation.
“Apart from IPEF, Indonesia is also currently establishing intensive cooperation with other countries to provide benefits for the important mineral industry and it is hoped that Indonesia can become a strategic partner in the clean energy sector,” he said.
Previously, the Indonesian Chamber of Commerce and Industry (Kadin) urged the United States (US) to be fairer in providing green subsidies for minerals for electric vehicles. Kadin is concerned about the ‘exclusion’ of Indonesia’s critical minerals from the US subsidy package for green technology.
Chairman of the Indonesian Chamber of Commerce and Industry Arsjad Rasjid stated that Indonesia could play an important role in meeting the US demand for electric vehicles and batteries. This is because Indonesia has one-third of the world’s total nickel reserves which puts Indonesia in the first position.
“Nickel is an important material for the production of electric vehicle batteries,” said Arsjad.
Arsjad also sees Indonesia and ASEAN as an alternative to China. He hoped the United States would grant Indo-Pacific Economic Framework (IPEF) members equal status with countries with which the United States has full free trade agreements.
“We are discussing about IPEF, and the spirit of the agreement is cooperation. If America excludes ASEAN, it feels very unfair,” said Arsjad.
In the electric vehicle development industry, Arsjad also invites America and the European Union to put their trust in Indonesia and other ASEAN countries.
With the important roles of Indonesia and ASEAN in the electric vehicle supply chain, Arsjad is optimistic that this region will become a strategic partner for both the United States, the European Union and China in the clean energy sector.
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