From Fossil Fuels to Fair Futures: The Struggle for Spatial Justice in Indonesia's Energy Transition
March 22, 2025
Satellite image of Indonesia's Morowali Industrial Park, located in Morowali Regency, Central Sulawesi, as of January 2025, covering approximately 4,000 hectares.
As the world races to transition from fossil fuels to clean energy, the concept of a "just transition" has become central to climate policy. Originally rooted in the 1980s U.S. labor movement, it aimed to protect workers' rights during economic shifts. Today, it has evolved into a broader framework ensuring that the move to renewable energy is equitable and inclusive. However, as a geospatial researcher, I argue that this transition, as currently structured, risks perpetuating deep spatial injustices—especially in resource-rich regions of the Global South. Indonesia's nickel industry exemplifies this paradox: while it promises global climate benefits, it entrenches local inequalities.
The energy transition is often seen as a shared responsibility between governments, industries, and communities, yet its benefits are unevenly distributed, creating geographic and socioeconomic disparities. The concept of "comprehensive justice" is crucial, as it examines ethical and justice implications across the entire supply chain, including the spatial distribution of opportunities and burdens. According to Garvey et al. (2022), spatial justice, rooted in political geography, builds on social justice theorists like John Rawls and critical geographers such as David Harvey and Doreen Massey, with Pirie first using the term explicitly in 1983. In just energy transitions, it ensures that decarbonization efforts do not deepen existing spatial inequalities but instead promote fair distribution of benefits and burdens.
With 52% of the world's nickel reserves (72 million tons, according to Badan Geologi, 2020), and since 2018, it has surpassed the Philippines as the world's largest producer (USGS Minerals Yearbook), positioning itself as dominant force in the global nickel industry. Nickel is essential for electric vehicle batteries, wind turbines, and solar panels—technologies crucial for clean energi transition. Recognizing Indonesia's strategic importance, China has invested heavily in its nickel sector, with reports indicating that as of July 2023, Chinese investments and commitments in downstream Indonesian nickel exceeded $30 billion, granting China control over approximately 75% of Indonesia's nickel refining capacity. While these investments have driven industrial growth, they have also resulted in severe social and environmental consequences. The Indonesia Morowali Industrial Park (IMIP), a major nickel-processing hub, has been linked to environmental disasters, including catastrophic flooding in nearby villages, such as the December 2024 mudflow in Desa Labota, which devastated local communities. Additionally, labor conditions in these facilities are often hazardous, as demonstrated by the December 2023 explosion at PT Indonesia Tsingshan Stainless Steel (ITSS), which claimed 18 lives.
As a result, nickel extraction and processing disproportionately impact local communities, especially Indigenous peoples, farmers, and fishers, who endure environmental degradation, livelihood loss, inadequate land compensation, and labor rights violations. Since 2018, protests have intensified across Sulawesi and Maluku, but only major incidents, such as the ITSS explosion, have attracted national or international attention. Overlay analysis of nickel leases and forest cover indicates that many concessions in Sulawesi encroach on protected forests. Despite Government Regulation No. 23 of 2021 on Forest Management, which permits only underground mining in these areas, most nickel mining operations in Indonesia rely on open-pit methods. This widespread practice potentially violates the regulation and poses a risk of irreversible ecological damage.
However, this phenomenon is not new. Rahma et al. (2021) highlight Indonesia's "resource curse," where provinces abundant in extractive resources often face higher levels of poverty, inequality, and environmental degradation compared to less resource-dependent regions. One of key factors contributing to this issue is the misallocation of revenue-sharing funds from natural resources. Most resource-rich regions in Indonesia receive revenue through the Dana Bagi Hasil Sumber Daya Mineral, particularly from the mineral and coal sectors, in which 80% of revenues from land rent and Iuran royalties are transferred from the central government to local governments. However, these funds are often not effectively redistributed to directly benefit communities through local development programs. Widespread corruption among regional leaders in resource-rich areas exacerbates this problem, leading to inefficient public spending, weak accountability, and a lack of long-term investment in sustainable development.
Furthermore, the global market for critical minerals is inextricably linked to geopolitical dynamics, significantly complicating efforts to achieve a just energy transition. Indonesia's involvement in the Just Energy Transition Partnership (JETP) exemplifies this complexity. The partnership, co-led by the governments of Japan and the United States and supported by several other nations and international entities, aims to mobilize substantial public and private financing to support Indonesia's energy transition. However, the withdrawal of the United States—a major donor—has cast significant doubt on the program's future. This uncertainty is further underscored by conflicting statements from Indonesian officials, such as Coordinating Minister Airlangga Hartarto's assurances of JETP's continuity and Special Presidential Envoy Hashim Djojohadikusumo's critique of the program as a failure. The sector is highly susceptible to market volatility and geopolitical tensions, leaving communities in eastern Indonesia potentially exposed to external shocks. These communities are effectively gambling their futures on an unpredictable global market, with limited safeguards against adverse outcomes.
Therefore, while the energy transition presents a transformative opportunity to reimagine global systems of production and consumption with a focus on justice and sustainability, achieving this vision requires a fundamental shift in policy implementation. A "spatial justice" approach must be adopted, addressing the entire supply chain—from extraction to end-use—to ensure an equitable distribution of benefits and prevent communities near resource sites from disproportionately bearing the burdens. International frameworks like JETP must be redesigned to prioritize local voices by actively involving Indigenous and community stakeholders in decision-making, ensuring fair compensation, and enforcing strict environmental and labor standards. The focus should extend beyond job creation to establishing sustainable livelihoods that support long-term economic resilience for affected communities.
This is particularly evident in Indonesia, where the concentration of nickel resources in the east underscores the spatial injustices inherent in the current system. The burdens of extraction fall disproportionately on local communities, while the benefits remain distant and largely invisible to urban centers and policymakers on Java Island, making the issue feel disconnected from the broader population. Without equitable policies, inclusive decision-making that considers spatial dynamics, and a fair distribution of benefits, the transition will exacerbate environmental degradation, displacement, and inequality, leaving vulnerable communities to bear the costs while others prosper. A just transition must prioritize the dignity and rights of all, ensuring that sustainability does not come at the expense of the marginalized.