"China's green tech giants link supply chains to Southeast Asia", 4 October 2023

Just a stone's throw from a seaside resort popular with tourists, a new industrial complex is expanding on Indonesia's Bintan island...First came an alumina refinery complex, run by Bintan Alumina Indonesia and partly owned by China's Shandong Nanshan Aluminium. The next project is an aluminum smelter, and an aluminum factory which by 2028 will reportedly supply the electric vehicle industry with aluminum ingots...

But there is an environmental price to be paid. Wastewater has begun to seep along the coast and the coal-fired power station fueling the complex spews soot into the air, a problem that will only grow once the smelter is up and running...

The environmental cost of "green tech" metals production is a familiar story to many in Indonesia, which mines bauxite, copper and particularly nickel for ostensibly clean batteries and modules made in China. But being part of China's green tech supply chain is a win for Indonesia's government...It is also an opportunity for some Chinese aluminum producers facing stricter emissions regulations, power supply shortages and production capacity caps at home...

China's green tech industry sees growing opportunity in Southeast Asia... From rare-earth mining in Myanmar and battery materials processing in Indonesia, to solar panel production in Malaysia and EV manufacturing in Thailand, Chinese companies are increasingly active in Southeast Asia's emerging low-carbon industries. They include big names such as electric car giant BYD, battery maker Contemporary Amperex Technology (CATL), solar panel producer JinkoSolar and wind turbine manufacturer Goldwind.

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Like other parts of the world, emerging economies in Southeast Asia face increasing pressure to decarbonize, but most lack funding options, which is why China has quickly stepped into the vacuum...The West, meanwhile, has been slow to enter the sector...

The U.S. and the EU moves to protect their own green tech industries also risk alienating some Southeast Asian countries. A case in point is Indonesia, the largest economy in the region. Indonesia's battery and EV ambitions have been placed in jeopardy by the IRA both because it lacks a free trade agreement with the U.S. and because most of its battery-related projects are backed by Chinese investment...