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UK chancellor Rachel Reeves has delivered Labour’s first budget since 2009, promising to “fix the foundations” of the economy through increased investment in areas including clean energy. 

Announcing the budget in parliament, Reeves became the UK’s first-ever female chancellor to lift the “red box”. 

The “historic” budget confirms new “fiscal rules” that Reeves says will enable increased government investment, to support priorities including making the UK a “clean-energy superpower”. 

Despite speculation ahead of the budget, Reeves extended a 14-year freeze in fuel-duty that has cost the exchequer a cumulative total of £100bn and left overall UK carbon dioxide (CO2) emissions as much as 7% higher than they would have been. 

Elsewhere, the budget hiked taxes on private jets, extended incentives for electric vehicles, confirmed an increase in the rate of windfall tax on oil and gas companies and pledged investment in technologies including “green hydrogen” and carbon capture and storage. 

Below, Carbon Brief runs through the key announcements.

‘Fixing the foundations’

Reeves presented Labour’s first autumn budget in 14 years, following its sweep to victory in the general election in July. 

Much of the framing in the run-up focused on how the Labour government would go about tackling the “slow growth, stagnant living standards and crumbling public services” they put down to 14 years of Conservative rule. 

A few days before the budget, a government release stated that prime minister Keir Starmer would “reject austerity, chaos and decline in favour of economic stability, investment and reform”. The release said the budget would look to “fix the foundations” of the UK. 

One key announcement trailed before the budget was a change to the government’s self-imposed “fiscal rules”, which are supposed to ensure that the balance of public revenue, spending and borrowing remains on a stable footing.

This change in the way public debt is measured will allow the government to fund extra investment in infrastructure and public services.

The budget “red book” says that the government’s new “investment rule” is to reduce “public-sector net financial liabilities” as a proportion of the overall size of the UK economy, within three years of each budget forecast. It explains: “This rule keeps debt on a sustainable path while allowing the step change needed in investment.”

In an interview with BBC News in the week before the budget, Reeves had said the change was being done “so that we can grow our economy and bring jobs and growth to Britain”.

The International Monetary Fund (IMF) warned last week that public investment in new technologies and the energy transition is “badly needed”, in order to drive growth in the UK. 

Speaking in Washington at the IMF annual meeting earlier in October, Reeves had said she would target investment to drive innovation in the transition to clean energy and upgraded infrastructure as part of the budget.

She reiterated this message in her budget speech, saying that her plans would help in “delivering our [government’s] mission to make Britain a clean energy superpower”.

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Transport and fuel duty

Reeves announced a bundle of measures concerning transport, ranging from a tax hike on private jets to the confirmation of improved regional train lines.

One of the chancellor’s most high-profile and controversial moves was maintaining the freeze on fuel duty paid by motorists on petrol and diesel.

Successive Conservative-led governments have cancelled planned inflation-linked fuel duty increases every year since 2010, meaning rates have been slashed in real terms.

In 2022, fuel duty was also cut by 5p per litre in response to the global energy crisis – a temporary measure that was subsequently extended in the spring budget in 2023

As such, thinktank the Institute for Fiscal Studies (IFS) found that fuel duty was already 37% lower in real terms in 2023 than the rate planned in 2010. 

Successive cuts and freezes in fuel duty have increased the UK’s CO2 emissions by as much as 7%, according to Carbon Brief analysis in 2023. 

Moreover, the fuel-duty cuts and freezes have cost the Treasury a cumulative total of some £100bn since 2010, according to the official Office for Budget Responsibility (OBR).

Fuel duty is the “only major tax that persistently fell” in recent years, the OBR says. It adds that if fuel duty remains frozen, it would cost the Treasury a further £5bn a year by 2030.

In the lead-up to the autumn statement, speculation had grown that Reeves might end the temporary 5p cut in fuel duty and reinstate inflation-linked increases, which could have seen an overall hike of 8p per litre, from the current rate of 53p 

However, in the end, the government decided to once again freeze fuel duty and extend the “temporary” 5p cut “for one year, at a cost of £3bn next year”. It justifies this as a measure to support “hard-working families and businesses”.

Increasing fuel duty is very unpopular and there has been a strong lobbying effort to block it. The Sun, which is the UK’s most widely read newspaper, has sustained a “14-year campaign”, promoted by climate-sceptic motoring lobbyists and applauded by senior Conservatives, to keep fuel duty frozen.

As Carbon Brief analysis shows, the newspaper has significantly ramped up its efforts under the new Labour government – more than doubling the number of editorials urging the government not to end the freeze. The newspaper describes the idea as “unthinkable” and a “masterpiece of self-harm” that would harm “working people”.

Number of editorials in the Sun newspaper mentioning the fuel duty freeze, between 2020 and October 2024.
Number of editorials in the Sun newspaper mentioning the fuel duty freeze, between 2020 and October 2024. Source: Carbon Brief analysis.

Despite the framing by both the government and the Sun, analysis by thinktank the Social Market Foundation shows that the poorest households benefit far less from lower fuel duty than the richest, who tend to drive more and own more vehicles.

Ahead of the budget, Starmer announced that the single bus fare cap in England will be raised to £3. This is an increase from the current limit of £2, introduced under the Conservative government and set to expire in December. 

The government says this higher price will allow it to “develop a more sustainable model of government support for the bus sector that is better value for taxpayers and bus passengers”.

However, the choice came under fire from Green MPs and climate NGOs, particularly in light of the fuel-duty freeze. They noted that the cost of low-carbon transport, such as buses, has increased by far more than the cost of driving cars in recent years. It would have cost £300m  per year to extend the £2 bus fare cap, according to the New Economics Foundation.

The budget also commits to investing in a handful of new rail lines and upgrades, including the Transpennine Route Upgrade between York and Manchester and East West Rail to connect Oxford, Milton Keynes and Cambridge. There is also money for electrifying some lines.

Notably, the government also confirmed plans to fund the tunnelling of the HS2 line to central London. (The previous Conservative government significantly scaled back the HS2 project and said the final section going into central London would be dependent on private investment.)

The budget also includes adjustments to taxes on flights, with air passenger duty increased to “correct for below-inflation uprating in recent years” – equating to an extra £2 on short-haul flights in economy class. (In 2021, the Conservative government cut air passenger duty in half for domestic flights.)

A more dramatic change was a 50% increase in duty for “larger private jets”, which Reeves said would amount to £450 per passenger. The budget documents note that the government “will consult on extending this rate to all private jets within the air passenger duty regime”.

Finally, the government commits to extending the “advanced fuels fund” for an extra year to support the production of “sustainable aviation fuels”.

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Electric-vehicle incentives

The budget contains a number of commitments to support the rollout of electric vehicles, in line with the government’s target of ending the sale of pure petrol and diesel cars by 2030, and extending this target to vans by 2035.

Among these measures are tax incentives to encourage people to purchase electric vehicles.

The rapid growth in UK electric cars sales in recent years has been driven partly by company-car purchases, which have benefited from generous tax breaks for low-carbon models.

The budget confirms that benefit-in-kind (BIK) tax rates for company cars will continue to favour electric cars, increasing by 2% per year out to 2029-20. 

However, plug-in hybrid vehicles will no longer benefit, with rates increasing far more “to align more closely with rates for internal combustion engine vehicles”.

Another change in the budget involves increasing the gap between the rate of vehicle excise duty paid in the first year by electric vehicles relative to other cars. (First-year vehicle excise duty payments are based on a new car’s CO2 emissions.)

The first-year rate will remain frozen until 2029-30 for zero-carbon vehicles, while hybrids and internal combustion engine vehicles will see increases. Cars emitting more than 76g of CO2 per km will see their first-year rates doubling from 1 April 2025.

The budget also confirms that the government will extend, for a further year, “green” first-year allowances – which can be deducted from the full cost of profits before tax – for “qualifying expenditure” on zero-emission cars and plants or machinery for electric vehicle charging points.

Other measures in the budget include investing over £200m in 2025-26 to accelerate the rollout of electric vehicles charging points. There is also £120m to support people in purchasing electric vans through the plug-in vehicle grant scheme, and to support the manufacture of wheelchair accessible electric vans.

Looking more broadly at electric vehicle manufacture, the government has also committed £2bn in support for the automotive sector, “including the zero-emissions vehicle manufacturing sector and supply chain”.

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Clean-energy investment

Measures in the budget supporting clean energy and net-zero include funding for investment in carbon capture and storage (CCS), nuclear and “green hydrogen” made with renewable electricity.

In addition, the budget documents tout the government’s “national wealth fund” as a route to supporting private-sector investment in clean energy:

“[T]he government will take further measures to catalyse private investment in the economy. This includes creating the national wealth fund to catalyse over £70bn of private investment in the UK’s clean energy and growth industries.”

In her speech, Reeves said the budget confirmed plans to capitalise the national wealth fund, which would “invest in the industries of the future, from gigafactories [for batteries or electric vehicles] to ports to green hydrogen”.

Responding to the budget, Ed Matthew, campaigns director for thinktank E3G, said in a statement:

“After years of flatlining investment, the government must now seize the opportunity of the ‘investment rule’ to make the UK a clean-energy superpower and boost green homes investment further. It is clean technology where our future prosperity lies, boosting productivity, making us competitive and weaning us off expensive and volatile fossil fuels. It’s the economic opportunity of the century.”

Funding announcements include £3.9bn for CCS projects between 2025-2026. These will help “decarbonise industry, support flexible power generation, and capitalise on the UK’s geographic and technical strengths”, the budget notes.

This follows the government pledging up to £21.7bn to support getting the UK’s first CCS projects up and running over the next 25 years, in an announcement at the beginning of October. The nearly £22bn funding is designed to support the development of two undersea carbon storage sites and pipelines, with the capacity to store more than 8.5m tonnes of CO2 per year. 

The budget also includes support for the “first round of electrolytic [green] hydrogen production contracts, harnessing renewable energy to decarbonise industry across the length and breadth of the UK”. This will support 11 green hydrogen producers across the country.

Other key technologies to win support in the budget include nuclear, with a £2.7bn settlement announced to continue the development of Sizewell C through 2025-26.

In August, the government announced it would provide up to £.5bn, as part of a new subsidy scheme for the planned new nuclear power plant in Suffolk. 

The equity and debt-raise process for Sizewell C is set to move into its final stages and conclude in spring 2025. Following this, a final investment decision will be made.

Separately, the budget announces “significant support” for UK fusion energy research, “to build on the UK’s position as a global leader in sustainable nuclear energy”.

Great British Energy will receive £125m in funding for 2025-26, the budget notes. This follows news in July that the publicly owned energy company would receive an initial capitalisation of £8.3bn of new money over this parliament. 

The budget also confirms £163m in funding to continue the “industrial energy transformation fund” from 2025-26 to 2027-28. 

The budget states that the government will help accelerate grid connections and build new network infrastructure. The government is working with the new National Energy System Operator (NESO) and energy regulator Ofgem to develop a “robust grid connection” process. 

As part of the commitment to “securing the UK’s place as a global leader in clean energy, protecting consumers and driving economic growth” the budget also notes that the government has commissioned advice from NESO on reaching net-zero electricity by 2030. This will feed into the government’s own “clean-power 2030 action plan”.

Other key upcoming documents, noted in the budget and expected over the coming year, include a response to the annual progress report from the government’s advisory Climate Change Committee, an updated “carbon budget delivery plan” setting out how it will meet legally-binding climate goals and a new industrial strategy. 

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North Sea tax

The budget also confirms an increase in the windfall tax on oil and gas companies. The energy profits levy (EPL) will rise by three percentage points to 38% from 1 November.

Established in May 2022 in response to record profits enjoyed by oil and gas companies during the global energy crisis, the government announced the increase to 38% in July. 

The budget confirms that an “investment allowance” of 29% will be abolished, but the rate of the “decarbonisation allowance” will be set at 66%. No additional changes to the tax relief available through the EPL will be made, which has also been extended by a year to 31 March 2030.

Further to this, the budget says the government will publish a consultation in early 2025 on how the taxation of oil and gas profits will respond to price shocks in the future.

Oil and gas company shares rose in response to the budget, according to the Financial Times, which says the changes to the EPL were “less tough than feared”. For example, Harbour Energy’s stock climbed 4.5% to 277p, according to the newspaper. 

At the same time as the budget, the government announced a consultation into “scope 3” emissions from offshore oil and gas production, meaning the emissions associated with burning resulting fuels.

This follows a “landmark” Supreme Court ruling earlier this year, which found that Surrey County Council had acted unlawfully by granting planning permission to the Horse Hill oil project without considering the environmental impact of burning the oil it would produce. 

The consultation will be part of efforts to develop new guidance for assessing the end-use emissions of oil and gas projects, as well as help “provide stability for the oil and gas industry, support investment, protect jobs and ensure a fair, orderly and prosperous transition”, the budget document says.

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Other announcements

The budget includes a number of other announcements relating to climate and energy.

One such measure is £3.4bn in investment towards a “warm homes plan” for heat decarbonisation and household energy efficiency over the next three years.

In its manifesto, Labour committed to £13.2bn of funding for these issues over the course of this parliament and the budget describes the £3.4bn investment as “the first step”.

The government says this money includes £1.8bn to support fuel-poverty schemes. It adds that it will increase funding for the “boiler upgrade scheme” – which supports the rollout of heat pumps in England and Wales – this year and next.

The budget also confirms £5bn over two years to support a “more productive and environmentally sustainable agricultural sector in England” and more than £400m for tree-planting and peatland restoration.

It adds that the government is “facing significant funding pressures” of almost £600m in 2024-25 for flood defences and farm schemes. The budget states that, “while the government is meeting those commitments this year, it is necessary to review these plans from 2025-26 to ensure they are affordable”.

The government also states that the Foreign, Commonwealth and Development Office (FCDO) is forecast to spend more than £2bn on international climate action in 2024-25. (The previous Conservative government had forecast a total international climate finance spend of £2.5-2.8bn in that year.)

The post UK autumn budget 2024: Key climate and energy announcements appeared first on Carbon Brief.

UK autumn budget 2024: Key climate and energy announcements

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Coles, Woolworths failing on deforestation commitments 

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SYDNEY, Wednesday 26 August 2026 — New 2026 Sustainability Reports released by supermarket giants Coles and Woolworths this week demonstrate the retailers are failing on their commitments to end deforestation in their supply chains.

Adele Chasson, Nature Policy Lead at Greenpeace Australia Pacific said:

“These so-called sustainability reports are revealing. Despite their public commitments in 2024 and 2025, neither Coles nor Woolworths have taken deforestation-linked beef off their shelves. Meanwhile, bulldozers continue to tear up forests and bushland, pushing wildlife closer to extinction and causing mass toxic runoff to flow into the Great Barrier Reef. Millions of native animals like koalas are losing their homes to beef pastures each year, while the big supermarkets put off action.

“Australians would be shocked to know that beef on the shelves of our biggest supermarkets could be pushing threatened species to the brink of extinction. Collectively Coles and Woolworths have made more than $2 billion in profits in the last year, profiting from the destruction of wildlife and precious Australian nature. Coles and Woolworths owe it to shoppers to deliver on their promises and end deforestation in their supply chains now.

“As big beef buyers, Coles and Woolworths have an essential role to play in keeping Australia’s unique forests standing. They can help stop the Great Barrier Reef from being poisoned by runoff and protect iconic forest wildlife by taking deforestation off their shelves. It’s time these big companies put their money where their mouths are and follow through on their promise of sourcing and supplying deforestation-free beef.”

Coles, Woolworths failing on deforestation commitments 

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New Zealand moves to protect business with law curtailing climate litigation

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New Zealand’s parliament has adopted a controversial new law blocking a whole avenue of climate litigation and shutting down its most advanced corporate lawsuit, which has been blamed by the government for shaking business confidence and investment.

The Climate Change Response (Tort Liability) Amendment Bill, expected to take effect in the coming days after it is formally signed by the Governor-General, prevents all current and future civil claims for climate loss or harm under tort law.

Justice minister Paul Goldsmith said last week that the aim was to give businesses “certainty around their climate change obligations”, noting it would not alter the government’s responsibilities under the Climate Change Response Act 2002 nor business obligations under the Emissions Trading Scheme.

“Our response to climate change is best managed by the Government at a national level and not through piece-meal litigation in the courts,” he added in a statement.

Such litigation, he said, “risks developing a new regime that contradicts the framework Parliament has already enacted” to tackle climate change.

    Goldsmith singled out a key domestic climate lawsuit brought by Northland iwi leader and activist Mike Smith against six big companies: dairy firms Fonterra and Dairy Holdings, energy firms Genesis Energy and Z Energy, New Zealand Steel and coal mining firm BT Mining. A seventh original defendant, Channel Infrastructure, was dropped after it permanently decommissioned its Marsden Point oil refinery.

    Smith argued that these companies had caused him harm under public nuisance and negligence law, as well as a third breach of a duty to cease contributing to climate change that has yet to be tested domestically. He did not seek financial compensation, instead asking for the companies to immediately stop emitting or contributing to net greenhouse gas emissions.

    In one of the most advanced corporate climate accountability lawsuits in the world, a trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to continue.

    Corporate lobbying in the shadows

    Smith described the passing of the bill as “deeply concerning”, particularly as it coincided with the Supreme Court hearing another of his climate lawsuits. In that case, Smith v Attorney-General, he argues that the government’s response to climate change and its impacts on Māori communities in particular breaches rights to life and culture.

    “That timing raises profound questions about the separation of powers and the rule of law,” said Smith. “Whatever one’s view of the merits of these cases, it is deeply troubling when parliament intervenes to remove a legal pathway while the courts are actively considering fundamental questions about climate responsibility, rights and the crown’s obligations.”

    The bill – which says that no person (including the government) can be found liable in tort for emissions-related climate change effects – followed major lobbying efforts by the companies defending themselves in Smith’s lawsuit. They outlined a proposed legal amendment in a briefing note to the government in 2024.

    The centre-right government has been fiercely criticised over its lack of transparency in relation to this lobbying activity. The national ombudsman recently found that the Prime Minister’s Office effectively withheld information requested by the Environmental Law Initiative about meetings, discussions and conversations regarding Smith’s case.

    Green groups fail to stop bill

    The bill sparked huge concern among environmental campaigners in New Zealand and elsewhere. Greenpeace Aotearoa called it a “shocking abuse of executive power” and the vast majority of submissions to a parliamentary inquiry said it should be rejected.

    But in the end, it was adopted with little resistance, moving relatively smoothly through parliament, passing its third reading by 67 votes to 53. Sam Bookman, climate law lecturer at Melbourne Law School, told Climate Home News he was not surprised by this, given that the coalition government has a secure majority.

    A complaint has been made to the UN special rapporteur on climate change and human rights by Smith, the National Iwi Chairs Forum Pou Tikanga and youth coalition Climate Clinic Aotearoa over what they see as the government’s heavy-handed approach. Smith is also challenging the new law in yet another lawsuit.

    “Pathetic”: New Zealand plans to barely cut emissions between 2030 and 2035

    Bookman thinks it “very unlikely” that such a challenge will succeed, noting that New Zealand’s constitution is firmly anchored in parliamentary sovereignty.

    But the expert in climate law does not see the bill as the end of legal action in the country, noting that New Zealand has a “sophisticated climate litigation landscape with a growing number of specialist and experienced lawyers and NGOs”.

    The country is also approaching its next general election in November, and some opposition parties have pledged to restore access to the courts if elected.

    Amanda Larsson, global project lead on agriculture for Greenpeace International, said: “This law deserves to be tested, and I strongly encourage the international climate litigation community to unite and help defend New Zealanders’ fundamental right to hold polluters accountable before this becomes a global blueprint.”

    Copycat legislation on the rise

    New Zealand’s move is part of a small but growing legislative effort to shut down climate litigation around the world.

    In the US, Republican politicians introduced legislation in the House and Senate in April that would shield fossil fuel firms from climate liability lawsuits. Similar laws have already been passed at state level in Tennessee, Utah, Iowa and Louisiana.

    The German state of Bavaria has put forward a similar proposal to the Federal Council, aiming to block private climate claims as well as the recognition and enforcement of foreign judgments imposing such liability. There are also proposals to limit available remedies and actions in the Netherlands and Belgium.

    UN General Assembly backs “climate obligations” set by world’s top court

    Bookman said he expects more efforts to counter climate damages litigation and advised plaintiffs to think about how to respond, including drawing on broader support in opposing them.

    “Even though it’s very hard for plaintiffs to win these types of cases, companies are very eager to avoid the expense, embarrassment and political accountability that come even with unsuccessful lawsuits,” he said.

    The post New Zealand moves to protect business with law curtailing climate litigation appeared first on Climate Home News.

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    Indonesia’s nickel production cuts are not enough to create a sustainable industry 

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    Bhima Yudhistira Adhinegara is the Executive Director of the Center of Economic and Law Studies (CELIOS), an Indonesia-based economic think tank. Muhammad Zulfikar Rakhmat is the Director of the China-Indonesia desk at CELIOS. 

    Indonesia produces around 60% of the world’s nickel, a metal used to manufacture batteries for electric vehicles (EVs) – more than any other country in the world. But in 2026, the government sharply reduced how much of its nickel can be extracted from the ground.

    Production quotas were reduced by around 40% this year compared to 2025. Weda Bay, the largest nickel mine on Earth, had its allowance cut by more than 70% and exhausted its full-year quota by the end of May, halting mining entirely; it cannot resume large-scale extraction until next year unless regulators grant an extension.

    The policy has sparked a vivid debate in Indonesian policy circles: how can the country shift its strategy from a decade of mining vast quantities of cheap nickel to producing a high-value and low-carbon material that the rest of the world wants for EV batteries.

    The cuts aren’t a silver bullet to clean up Indonesia’s nickel industry, whose smelters are powered by coal – the most polluting fossil fuels. But alongside stricter enforcement of environmental rules, it is one side of efforts to produce more sustainable nickel for a premium.

    Restricting Indonesia’s nickel output

    Production quotas were introduced to stop the collapse of nickel prices because of oversupply in the market. Prices had fallen more than 40% in 2023 alone and kept sliding as Indonesian supply kept growing, hitting a four-year low of around $13,900 a ton in late 2025.

    Critics called the recent tightening of production quotas proof that Indonesia’s nickel strategy has failed, arguing that the industry shouldn’t need to throttle its own output to survive. But when assessed against what the policy was supposed to do – push up nickel prices – it has worked. Prices jumped to $20,000 a ton in May, the highest since 2024.

      Chinese industry groups representing companies that have invested billions to mine and refine the country’s nickel were furious, warning Indonesia’s president Prabowo Subianto that the cuts put $50 billion worth of investment at risk. But much of that Chinese capital is sunk into smelters and processing plants built specifically to run on Indonesian ore, and cannot simply be moved elsewhere. That gives Jakarta more room to hold its ground than the warning suggests.

      Stronger environmental enforcement

      Since the start of the year, Indonesia’s forestry task force has seized more than four million hectares of land from mines and plantations operating illegally in protected forests, collecting over two trillion rupiah ($113 million) in fines.

      This included 148 hectares seized from Weda Bay for lacking a forestry permit. The share of nickel produced from illegal small-scale mining also fell from about a quarter in 2022 to roughly 10% by 2024.

      The crackdown responds to serious environmental damages in the nickel industry. On Obi Island, a waste pond collapsed after heavy rain in June 2025, flooding three villages and killing a resident. Internal company tests found chromium-6 – a carcinogen – in the water, in quantities far above the legal limit. The footprint of another mine near Raja Ampat, which is home to some of the world’s richest coral reefs, grew 60-fold in just eight years.

      A coastal village is wedged between the sea and a large nickel mine in Indonesia
      The fishing villages of Tapunggaya in Sulawesi, Indonesia, are squeezed between the sea and an expanding nickel mine (Photo by Garry Lotulung/NurPhoto)

      The market is responding to early cleanup efforts. Low-carbon nickel now sells for a real premium, roughly $18,800 to $19,300 a ton compared with $17,900 to $18,300 otherwise, as carmakers seek to source cleaner materials to comply with the European Union’s new emissions rules for imports.

      In turn, this is incentivising the industry to do more to green its operations. Vale Indonesia’s smelter in South Sulawesi now runs almost entirely on hydropower, for example.

      None of this addresses coal use, however. Major Indonesian nickel producers still emitted an estimated 15 million metric tons of greenhouse gases in 2023. Indonesia may be cracking down on illegal mining and rewarding cleaner producers but it is still running its mines on the dirtiest fuel available.

      Unequal benefits

      For Indonesia to truly benefit from producing cleaner and high-value nickel, it needs to reap the economic benefits too. Although the industry has boosted the country’s economic growth, the reality on the ground tells a different story.

      Konawe in Southeast Sulawesi is home to a major smelting complex. Growth in the district jumped from 6% to 22% between 2015 and 2023, driven almost entirely by the nickel industry, according to a study by the Lowy Institute study. At the same time, poverty levels increased slightly and unemployment remained unchanged.

        In Halmahera, another epicentre of the nickel industry, spending by the poorest fifth grew just 5% between 2019 and 2022, compared with 28% for the wealthiest fifth, according to a separate study.

        Part of the reason for this inequality is the system for transferring mining royalties to district authorities where the mines are located. In theory, they are entitled to the largest share. But in practice, payments are delayed, companies routinely dispute what they owe and royalties are pooled and distributed across a larger area.

        The Natural Resource Governance Institute has found that decentralisation handed local governments power to approve new mines faster than they could build their capacity to manage them. Higher output raises national income on paper, but local governments remain constrained by fiscal rules and infrastructure costs that scale with mining.

        None of this makes the 2026 quota cuts a mistake. Indonesia has every right to defend its pricing power over a resource it controls. But limiting extraction isn’t going to fix underlying issues around environmental enforcement and revenue-sharing. That requires rules that are consistently enforced, royalties that reach communities living by the mines, and a plan to wean smelters off coal.

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        Indonesia’s nickel production cuts are not enough to create a sustainable industry 

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