Regulation and Incentives Key to Mining Companies Switching to EVs

Jakarta, CNBC Indonesia - Director of Prevention of Environmental Impacts on Regional and Sectoral Policies at the Ministry of Environment and Forestry, Widhi Handoyo, stated that incentives and supportive regulations must be combined to enable electric vehicles (EVs) to enter the mining industry. “Incentives and regulations cannot be separated for EVs in the mining industry; they must be married. Incentives are driven to help with initial capital,” Widhi explained during the EV Transition in Mining Industry Outlook 2026 event on Wednesday (29/4/2026). According to him, once initial incentives take effect and the ecosystem is established, they can then be combined with stricter regulations. “When talking about incentives, that’s the upstream part. After that, regulations run in parallel ahead, and these two things must be combined for maximum results,” Widhi stressed. Therefore, Widhi noted that exercises must continue, especially to make things more efficient. At this stage, according to Widhi, quite a lot of costs are incurred, and it takes time for business owners to recoup their capital. “Moreover, the mining sector is an exploitative activity that impacts environmental damage, so the ecosystem and environment must be regulated to ensure their functions run as they should,” Widhi emphasised. Previously, Vice Chairman I of the Indonesian Mining Services Association, Ahmad Kharis, was candid about the high operational costs in the mining sector. He revealed that in running a mining business, one of the largest costs is in contractor work. This can include overburden removal and material transportation, which often encompass fuel (BBM) costs, heavy equipment maintenance, and labour. “We need to know that the biggest end is with us, about 85% done by contractors. For nickel, we do the most work, so the biggest investment is with us. For mining services, as long as there’s profit, it’s okay,” Ahmad explained. Seeing this, he hopes industry players can receive incentives to drive business continuity. Even industry players are ready to promote the use of electric vehicles as one form of commitment to sustainability.