Indonesia's Critical Minerals Access Opens Up, But Nickel Export Opportunities Face Challenges

Regulatory Hurdles in the US Market

The opening of Indonesia's access to critical minerals in the US market is seen as a significant opportunity for the country's export sector. However, regulations and standards in the US, particularly the Inflation Reduction Act (IRA), are hindering the export of nickel. According to economist Telisa Aulia Falianty, the US's need for raw materials for electric vehicles (EVs) could boost Indonesia's export potential, but the IRA's exclusion of nickel components reduces US businesses' interest in developing nickel-based EVs.

ESG Standards and Traceability Pose Additional Challenges

In addition to regulatory hurdles, Indonesian exports to the US also face challenges related to environmental, social, and governance (ESG) standards, as well as traceability. The US market requires strict adherence to ESG standards, which can be a barrier for Indonesian companies. Furthermore, the complexity of trade agreements between the two countries adds to the challenges faced by Indonesian exporters.

Conclusion

In conclusion, while the opening of Indonesia's access to critical minerals in the US market presents opportunities for the country's export sector, regulatory hurdles, ESG standards, and traceability pose significant challenges. To overcome these challenges, Indonesian companies must ensure compliance with US regulations and standards, while also prioritizing ESG considerations and traceability.