Decarbonisation and Sustainable Finance Key to Battery and EV Industry Competitiveness
On Tuesday (3/6/2026), Adinova Fauri, a researcher at the Centre for Strategic and International Studies (CSIS), alongside Dr Md. Mahmudul Alam, Professor of Finance at BRAC University, emphasised the importance of decarbonisation and sustainable finance in supporting the development of the battery and electric vehicle (EV) industry in Indonesia. The discussion aimed to maintain competitiveness while fulfilling environmental commitments, presented during a CSIS-CESGS Universitas Airlangga public seminar titled ‘Building Decarbonisation in the Battery and EV Industry Supply Chain to Maintain Indonesia’s Competitiveness and Environmental Commitment’.
The speakers agreed that Indonesia’s success in establishing a battery and EV industry depends on more than just its abundant mineral resources. The key lies in the industry’s ability to meet global sustainability standards and attract investment to support the transition towards a low-carbon industry.
Decarbonisation as a Determinant of Industrial Competitiveness
In his presentation, Adinova explained that decarbonisation is no longer viewed solely as an effort to reduce carbon emissions, but also as a vital factor in maintaining the competitiveness of Indonesian industry in international markets. He noted that various environmental standards are increasingly being applied in global trade, meaning companies unable to meet these standards may face market access barriers or increased compliance costs.
“Decarting is not only necessary for us to achieve environmental goals, but there is also an economic objective involved,” he stated.
He noted that Indonesia has significant opportunities in the development of the battery and EV industry due to its abundant nickel reserves, which are a primary raw material for batteries. However, this advantage does not guarantee Indonesia’s competitiveness across the entire industrial supply chain.
According to Adinova, several challenges require attention, ranging from the reliance on coal as an energy source to low competitiveness in the midstream and downstream sectors. Therefore, a decarbonisation strategy must be an integral part of national battery industry development to ensure Indonesia can maintain its position in global competition.
ESG and Sustainable Finance to Drive Green Industry Investment
Complementing the discussion, Mahmudul Alam highlighted the importance of sustainable finance in supporting the development of the battery and EV industry. He noted that global investors today do not only consider potential economic profits but also pay close attention to Environmental, Social, and Governance (ESG) aspects in every investment decision.
“You have the resources, but resources alone are not enough. To utilise those resources, you need money,” he explained.
Mahmudul explained that Indonesia possesses significant capital in the form of strategic mineral resources required for the battery industry. However, this potential needs to be supported by an investment climate capable of convincing investors that industrial development is proceeding sustainably and meeting increasingly strict ESG standards.
Furthermore, he assessed that improving ESG performance could be a strategy to increase Indonesia’s investment attractiveness. He argued that nations and companies capable of demonstrating a commitment to sustainability will have greater opportunities to access global financing.
“If you can improve your overall ESG performance, you can attract investment because your competitors are facing the same challenges,” he asserted.
Through supply chain decarbonisation and the strengthening of sustainable finance, Indonesia is seen as having a great opportunity to build a battery and EV industry that is not only economically competitive but also capable of meeting the growing global demand for sustainability.