The Clean Energy Paradox: Can ASEAN Reconcile Nickel Mining with Biodiversity Protection?
by Ellohnia Michelle Angella
11 August 2025
As the world accelerates its transition to clean energy, nickel has emerged as a critical mineral which is utilized in the manufacture of lithium-ion batteries used in electric vehicles (EVs). Its main advantage lies in delivering higher energy density and greater storage capacity, enabling longer battery life and improved efficiency at lower cost. Recently, nickel’s global demand is rising rapidly, with projections estimating an increase by nearly 30% between 2030 and 2040, mostly driven by the growth of clean technologies aligned with the net-zero targets.
As nations race to decarbonise, Southeast Asia has emerged as an indispensable nickel hub, with Indonesia and the Philippines leading the production. As of 2024, Indonesia holds around 42% of the world’s nickel reserves, a sharp increase from just 21% in 2022. Moreover, Indonesia globally dominates the production of battery-grade materials such as Nickel Pig Iron (NPI) and Mixed Hydroxide Precipitate (MHP), both of which can be further processed into nickel chemicals used in the expanding EVs market. Following Indonesia’s lead, the Philippines stands as the world’s second-largest nickel producer, reaching approximately 345,000 tonnes in 2023, primarily supplying raw ore to international markets. However, this rapid growth has sometimes involved land use practices that outpace environmental safeguards, potentially affecting forests, coasts, and indigenous areas. While the downstream policy has delivered substantial economic gains for the country, it has also raised growing concerns about inadequate regulatory oversight in mining activities, particularly in the environmental impact. To address this gap, this article highlights ASEAN’s efforts and initiatives to implement more sustainable mining activities in the region.
Indonesia and the Philippines have become central pillars of the global clean energy economy, harnessing their vast nickel reserves to strengthen ties with international investors. In Indonesia, a downstreaming policy that bans raw ore exports and prioritises domestic processing has transformed industrial hubs like Morowali and Weda Bay into major centres of smelting and refining, supported by China, South Korea, and Europe. This strategy has not only bolstered Indonesia’s industrial capabilities and export earnings but also created significant employment opportunities. However, it has come at a cost: large-scale mining permits often overlap with protected areas, while energy-intensive smelters powered by coal amplify climate impacts. Regions such as Raja Ampat have become flashpoints, where mining activities threaten indigenous rights, coastal livelihoods tied to fishing and ecotourism, and rich marine biodiversity, including endangered sea turtles and reef sharks.
The Philippines, on the other hand, primarily exports raw ore to meet nickel global demand. While Indonesia enforces a ban on raw nickel ore exports to prioritise domestic processing and build local industrial capacity, the Philippines chose to keep exporting raw ore, shelving a similar ban to protect jobs, reassure investors, and recognise the challenges of swiftly developing domestic refining. Mining operations are heavily concentrated in regions like Caraga and Palawan, areas that are also renowned for their biodiversity. Reflecting a similar situation to Raja Ampat, these dynamics highlight a recurring challenge across biodiversity-rich mining zones in Southeast Asia. However, the rapid expansion of nickel extraction in the Philippines has also sparked concerns over deforestation, water pollution, and the disruption of the local community’s livelihood. Cases of siltation from open-pit mines have damaged coral reefs and fisheries, undermining local economies that depend on healthy ecosystems. Together, these intertwined economic gains, and environmental pressures highlight the shared challenges facing Southeast Asia’s top nickel producers.
These complex conditions have prompted both Indonesia and the Philippines to establish their own sets of regulations and safeguards. These measures aim to balance economic opportunity with environmental responsibility, ensuring a more just and inclusive clean energy transition.
Indonesia has implemented a range of policies to regulate its mining sector and protect the environment. The Mineral and Coal Mining Law (Law No. 4/2009, updated by Law No. 3/2020) establishes licensing procedures, operational obligations, and post-mining reclamation requirements. The Environmental Protection and Management Law (Law No. 32/2009) mandates that mining projects undergo environmental impact assessments (AMDAL) to mitigate ecological risks. In addition, Article 62A of MEMR Regulation No. 11 of 2019 bans raw nickel ore exports, ensuring that more processing takes place domestically to support Indonesia’s industrial goals.
Furthermore, the Philippines also has several policies meant to guide mining toward more responsible practices. The Philippine Mining Act of 1995 (RA 7942) sets the main rules, requiring environmental impact assessments and community consultations before projects begin. The DENR’s Administrative Order 95-936 ensures companies prepare long-term plans for environmental protection and site rehabilitation. Mining operations also follow buffer zone rules, which generally keep activities at least 20 meters away from rivers and streams to help protect water sources. In Palawan, the Strategic Environmental Plan (SEP) Law (RA 7611) adds an extra layer of protection through special zoning that limits activities in ecologically sensitive areas.
Despite these protective frameworks, translating them into effective action for ecosystems and communities remains a major challenge. Weak enforcement and limited monitoring capacity have allowed mining activities to continue in sensitive areas, undermining the very safeguards intended to prevent environmental degradation and social harm.
Beyond national efforts, ASEAN has recognised the pivotal role of critical minerals in driving economic cooperation and supporting the region’s broader development goals. ASEAN is one of the largest global markets for mineral raw materials, with Indonesia and Philippine serve as the top suppliers of key minerals. In 2018, mineral trade reached $250 billion, accounting for nearly 9% of ASEAN’s total trade, with 21% conducted within the region itself. Since formalising collaboration through the first ASEAN Minerals Cooperation Action Plan (AMCAP) in 2005, ASEAN has placed strong emphasis on capacity building which covers geological surveys, resource assessment, mine rehabilitation, sustainable development, licensing, and processing of minerals. The current AMCAP-III for 2016–2025 is structured into two implementation phases, with Phase 1 covering 2016–2020 and Phase 2 covering 2021–2025. Through this framework, ASEAN seeks to strengthen its minerals sector to support regional growth while upholding environmental and social responsibility.
Among ASEAN’s key initiatives is the Sustainable Minerals Development (SMD) Programme, which aims to embed environmental stewardship and social responsibility into the region’s mineral sector. A key milestone of this effort is the ASEAN Minerals Awards (AMA) which acknowledges mining initiatives demonstrating strong environmental and social responsibility across the region. Complementing this is the ASEAN Reporting Mechanism (RM) that serves as a regional platform for assessing how effectively Member States implement sustainability policies, offering greater transparency in tracking national progress and performance standards. The Capacity Building in Minerals (CBM) Programme further supports ASEAN’s efforts by strengthening institutional and technical capacities through collaborative training on mine closure, environmental assessments, licensing, and governance, reinforcing the region’s commitment to a competitive, inclusive, and environmentally responsible minerals sector.
ASEAN has been steadily advancing toward a more sustainable minerals sector through regionally coordinated frameworks such as the AMCAP, reinforced by tools like the ASEAN RM, the AMA, and the CBM Programme. These initiatives have supported the development of common standards, improved institutional capacities, and promoted responsible mining practices across Member States. While ASEAN continues to strengthen its governance of critical minerals, it can further gain complementary insights from global examples such as Australia’s rehabilitation regulations and Canada’s approaches to legacy mine management and inclusive governance.
For Indonesia and the Philippines, such practices underscore the need to evolve from compliance-oriented frameworks to more outcome-driven, transparent, and participatory governance. Persistent challenges in financial assurance, monitoring, and accountability, particularly in ecologically sensitive areas, highlight the urgency of reinforcing national frameworks. At the same time, as other Member States such as Myanmar, Vietnam, and Malaysia expand their roles in critical mineral supply chains, ASEAN’s shared path forward will depend not only on national reforms but on deeper regional coordination. By aligning efforts around environmental safeguards, community rights, and equitable access to resources, ASEAN can shape a resilient and sustainable minerals sector, one that powers the clean energy transition without compromising the region’s ecological integrity or social foundations.
Ellohnia Michelle Angella is a Research Assistant of ASEAN Climate Change and Energy Project (ACCEPT) Phase II and Indira Pradnyaswari is a Research Analyst of ACCEPT Phase II at ASEAN Centre for Energy.
The views, opinions, and information expressed in this article were compiled from sources believed to be reliable for information and sharing purposes only, and are solely those of the writer/s. They do not necessarily reflect the views and opinions of the ASEAN Centre for Energy (ACE) or the ASEAN Member States. Any use of this article’s content should be by ACE’s permission.
