Abstract

With more than half of the nickel mined worldwide, Indonesia was by far the largest producer in 2023. Growing concerns over climate change and the “green transition” to renewable energy sources have seen an increasing demand for nickel, which is primarily used in stainless steel production and as a vital component in lithium-ion batteries for electric vehicles (EVs). Yet, mining and processing practices have caused serious social and ecological harm such as deforestation, habitat destruction and displacement, as well as impoverishment of local communities. The German government and several German companies, such as the car company Volkswagen (VW), have shown interest in nickel production in Indonesia, especially for the growing market of EVs and, therefore, the green mobility transition in Germany. This creates the paradoxical situation in which the German energy transition is an example of the broader dynamic whereby the Global North consumes “clean energy” while the Global South extracts the necessary resources and bears the resulting social and environmental consequences.Economic ties between Germany and Indonesia are particularly significant in the realms of renewable energy and critical raw materials, with Indonesia playing a pivotal role in diversifying Germany’s access to resources like nickel. Beyond the German interest in trade relations with Indonesia, the two countries have longstanding energy and development partnerships. The Just Energy Transition Partnership (JETP)1, launched in 2022, plays a pivotal role in this collaboration, with Germany stepping in as co-lead following US withdrawal in February 2025.Recently, Germany and the European Union (EU) issued a due diligence directives aimed at preventing business operations from contributing to human rights violations and environmental harm. However, as we will demonstrate, the case of Indonesian nickel mining reveals significant gaps in implementation, rendering this legislations impotent when compared to fostering energy partnerships based on the premise of justice. The struggle over nickel extraction in Indonesia, particularly its framing as essential for advancing a green energy transition and sustaining economic growth in the Global North, serves as a striking example of the rise of green capitalism and the (re)production of colonial continuities (Tornel 2022, 43-65; Müller 2024, 702-717). Specifically, the green financialization of critical raw materials and the emerging geopolitics of Germany and the EU are intrinsically tied to the perpetuation of historical patterns of exploitation for economic gains. At the same time, Germany is upholding its pledge to economic solidarity and “partnerships of equals” (SPD, Bündnis 90/die Grünen, and FDP 2021) and the due diligence laws theoretically aim to prevent human rights violations and ecological harms along global supply chains. Amid these contradictions, this study provides an overview of nickel mining and processing in Indonesia, including its structural context and impacts, in order to assess how far German engagements in Indonesian nickel production resemble and renew colonial dynamics.