US and Indonesia Discuss Potential Nickel Trade Partnership for EV Batteries

Deal Faces Challenges Over Environmental Concerns and Trade Regulations

US and Indonesia are discussing a potential partnership to stimulate trade of nickel, a critical component for electric vehicle (EV) batteries.
Indonesia, which has the world's largest nickel ore reserves, is keen to develop an EV supply chain using its vast nickel reserves.
The Biden administration is concerned about environmental, social and governance standards in Indonesia and is examining how a deal might work.
Under US law, a certain amount of critical minerals in EV batteries must be produced or assembled in North America or a free trade partner for EVs sold in the US to be eligible for tax credits. Indonesia does not have a free trade agreement with the US.
The Biden administration is also discussing ways to exclude any nickel that is extracted from Indonesia but processed in China from receiving the Inflation Reduction Act credits.