Jakarta, February 26th 2022–China Energy Construction Cooperation, Tianjin Electric Power Construction Co., Ltd., has won the tender for the Coal Power Plant (CPP) project on Obi Island, South Halmahera Regency, North Maluku. This project was invested with Ningbo Lygend Resources Technology and Indonesia Harita Group.

The coal-fired power plant project with a capacity of 4×380 MW is build to support the laterite nickel ore smelter project which is also located on Obi Island. The first phase of the project includes the construction and installation of the system. The target is that the CPP is claimed to supply energy sources for the development of nickel smelters as raw materials for the battery industry.

Andri Prasetiyo, Researcher and Program Manager of Trend Asia, said the project, which has involvement with China, is the first CPP construction contract after President Xi Jinping’s statement about the climate commitment that China will stop the construction of CPP  overseas in September 2021.

“Xi Jinping’s promise in his delivered  speech to the UN General Assembly is in accordance with his actions. The construction of this project clearly shows that China, as the world’s largest emitter of greenhouse gasses, is not serious and consistent in implementing its latest climate commitments,” he said.

In his commitment, Xi Jinping said that China would increase financial support for green and low-carbon energy projects in developing countries. However, Andri assessed that the CPP construction project to support the smelter industry to fulfill batteries for energy components and green transportation was an inappropriate step. He emphasized that green energy projects must be completely separated from the linkage of dirty coal energy from the upstream to the downstream.

“If the green and low-carbon energy project is still supported by dirty coal energy, then the project should not be called a green and sustainable energy project,” said Andri.

In this context, the government’s decision to build a large-scale industrial complex on Obi Island is problematic and worth highlighting. With a limited area, on the one hand the carrying capacity and environmental capacity of Obi Island will experience problems.

On the other hand, Obi Island also has limited renewable energy potential, so it is not sufficient to supply energy needs for industrial areas in its area. However, this is not necessarily a justification for using coal energy. Referring to the mandate of the Paris Agreement, this move shows how the government are not making  careful planning in connecting  industrial development and clean energy supplies.

Andri assessed that instead of forcing the development of a smelter industry on Obi Island, the government can  pursue an interconnection policies by building  smelters in regions that arecapable to supply energy needs with clean energy sources other than coal, to process nickel supply and raw materials.

This project also has a negative impact on the people living around the project area. Lily Mangundap, as in her interview in Project Multatuli, said that this nickel smelter industry project had slowly “killed” her and her family. The company PT Trimegah Bangun Persada, a subsidiary of the Indonesia Harita Group, forcibly evicted its plantation land to expand its concession by building a nickel smelter. The land that was Lily’s source of livelihood disappeared and turned into the Obi Island Industrial Estate, which produces nickel ore as the raw material for batteries for electric vehicles.

Through this project, China is also demonstrating the paradoxes of its climate policy at home and abroad. Like Indonesia, in its latest Nationally Determined Contribution (NDC) document, China also promised to achieve carbon neutrality by 2060. To achieve this, China announced that it would strictly control the use of coal so that it no longer dominates their energy mix. However, instead of doing the same thing as in their country, China is still building a new CPP in Indonesia.

A policy paper entitled Internationalism in Climate Action and China’s Role (2022) explains, China has made great strides in implementing climate policy at home, but will not achieve its goals without urgent additional action to promote a clean energy transition at home and abroad.

“China should be serious about fulfilling its climate commitments by withdrawing from involvement in this project and reorienting support to clean and sustainable renewable energy projects,” concluded Andri.


Media contact:

Andri Prasetiyo, Researcher and Program Manager Trend Asia

Ina, Communication Officer Trend Asia


Photo: Getty Images