The Price of Progress: An Assessment of Indonesia's Nickel Downstreaming Policy for the Global Energy Transition

Abstract

Indonesia has positioned itself as a major global supplier of critical minerals, particularly nickel, through its bold downstreaming policy known as hilirisasi. This paper critically examines whether Indonesia's nickel industrialization genuinely enhances economic sovereignty or reproduces structural dependencies under a green extractivist agenda. By combining postcolonial political economy perspectives with empirical data, this paper reveals that despite increased foreign direct investment and export value, the country remains embedded in low-value segments of the global supply chain, while environmental and social costs accumulate domestically. The findings suggest that Indonesia's strategy represents a form of "refined dependency"where the appearance of progress masks continued ecological unequal exchange.