Attempts to prevent the destruction of the world’s rainforests are badly off track — and in the public mind, electric vehicles (EVs) are increasingly to blame.
Felling of tropical woodlands resulted in greenhouse pollution equivalent to 3.7 billion tonnes of carbon dioxide last year, the Forest Declaration Assessment, a group tracking deforestation, said in a report last week. Indonesia was the biggest culprit: Compared with the area that would have been cleared if the practice were on track to be eliminated by 2030, the country cut down an additional 530,000 hectares.
If you have been reading the news over the past year or so, you might assume this was largely about the nickel that is used to cram more energy into EV power packs.
“Indonesia’s massive metals build-out is felling the forest for batteries,” announced the headline of a recent The Associated Press article.
“Nickel miners linked to devastation of Indonesian forests,” declared another in the Financial Times.
A Washington Post series on similar themes carried the tagline: “Clean Cars, Hidden Toll.”
The claims that nickel mining is dirty and damaging are not wrong. About 76,000 hectares of Indonesian woodlands were cleared to dig up the metal between 2001 and 2022, according to a study in May by Mighty Earth, a non-governmental organization focused on tropical industries. This trend might well be accelerating, along with nickel demand: In the four years through last year alone, more than 15,000 hectares were uprooted. The industry opens up new frontiers of logging on remote islands that were previously largely untouched, while ore processing leaves piles of toxic, potentially unstable tailings, as well as carbon pollution from coal-fired power plants.
Yet the focus on nickel risks distracting from the far bigger threat to Indonesia’s rainforests — palm oil. In the same period in which nickel mines have spread over 76,000 hectares, the country’s oil palm plantations grew by 12.75 million hectares. Every year, the area where palm fruit are harvested grows by several hundred thousand hectares.
The comparison is worthwhile because every use of land involves trade-offs between biodiversity loss, climate damage, landholder rights, economic growth, politics and profit. Palm oil is a sort of substitute for nickel in the power trains of road vehicles, since Indonesian diesel contains a 35 percent biofuel blend.
For all the excitement and angst around Indonesia’s nickel boom, it is palm oil that is benefiting most from Jakarta’s political patronage. Indonesian president-elect Prabowo Subianto last month promised to increase the biofuel blending rate to 50 percent as soon as next year. That is intended to reduce dependence on imported petroleum, but it would also consume about 18 million tonnes a year of palm fat — equivalent to nearly one-quarter of the entire global crop. If agricultural yields do not improve, getting all that extra oil from Indonesian farms would require an extra 2 million hectares of land, far more than the most apocalyptic predictions for the future of nickel mining.
Any attempt to reverse deforestation needs to reckon with this fact. Palm’s use in consumer products from Nutella chocolate spread to Head & Shoulders shampoo gets all the attention, but Indonesian road vehicles have been by far the biggest driver of demand growth. The country’s plantations are not growing so it could make more money exporting palm oil, but so it could spend less money importing crude oil.
A far better solution to that problem would be to use less oil in general by accelerating the move to EVs — but policy on that front is falling short. Indonesia has only recently started moving toward the sort of fuel economy rules that could spur more rapid uptake of EVs and reduce petroleum consumption. The modest EV incentives that do exist are more focused on spurring local manufacturing than getting cheap vehicles onto the roads. Meanwhile, the country is nowhere close to government targets to install 25,000 to 30,000 public chargers by the end of the decade.
That is enough hurdles for any industry to reckon with, but convincing consumers to take up EVs is also going to depend on the availability of cheap nickel to bring down the cost of batteries. If we want that metal to be available, we are going to have to accept that Indonesia, which already produces half of the world’s nickel, is going to end up mining more of it.
The forests of Southeast Asia have real potential to provide the world’s energy needs. Minimizing damage to them would require using this precious resource as frugally as possible. As a result, we should be favoring capital-intensive industry over land-intensive agriculture. At current prices and output levels, a hectare given over to mining could provide enough metal for 1,000 EVs and generate close to 200 times as much revenue as the same area planted with palm. Rather than fretting about Indonesia’s transformation into a nickel superpower, we should be welcoming it.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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