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Indonesia's nickel industry has become a strategic pillar of the country's economic development and global energy transition, driven by its vast nickel reserves and growing role in the electric vehicle battery supply chain. The article examines how downstream industrialization has increased investment and export opportunities while also generating significant environmental, social, and governance challenges. It highlights concerns over deforestation, biodiversity loss, pollution, greenhouse gas emissions, labor conditions, and conflicts affecting Indigenous Peoples and local communities, arguing that the industry's long-term competitiveness depends on addressing these sustainability issues alongside economic growth.

The article recommends strengthening environmental governance, improving transparency and regulatory enforcement, and ensuring that nickel development aligns with internationally recognized environmental, social, and governance (ESG) standards. It emphasizes the importance of protecting community rights, promoting responsible mining practices, and accelerating the decarbonization of nickel processing to reduce the industry's environmental footprint. By integrating sustainability, social inclusion, and accountable governance into its nickel value chain, Indonesia can reinforce its position as a leading supplier of critical minerals while supporting both national development goals and the global clean energy transition.