Bambang Ismoyo, Jakarta – Indonesia's mining industry faces growing pressure to adopt stricter emissions standards for operational vehicles, as experts and industry players warn that outdated, diesel-powered fleets are undermining the country's net zero goals and investor confidence
Komaidi Notonegoro, Executive Director of the Reforminer Institute, stated that the mining sector is one of the largest contributors to emissions, mainly due to the use of fossil-fueled vehicles.
"If parallel efforts can be implemented, the carbon footprint should be minimized," said Komaidi on Monday.
He also highlighted the impact of land clearing or deforestation activities, which worsen greenhouse gas emissions. According to him, reforestation and the use of low-emission vehicles will enhance the mining industry's image in achieving the net zero emission (NZE) target.
Furthermore, Komaidi revealed that the enforcement of regulations regarding low-emission mining vehicles is still weak due to the absence of clear rules. As a result, many business players prefer low-emission standard operational vehicles because they come with lower fuel costs.
"Industries always look for the cheapest operational costs. So yes, the government needs to set limits and regulations," he said.
The implementation of environmental, social, and governance (ESG) principles in the mining sector is also seen as influencing investor interest.
The Chairman of the Indonesian Energy, Mineral, and Coal Supplier Association (Aspebindo), Anggawira, explained that there are at least three reasons why ESG is crucial in attracting investment.
First, global investors are now more selective about ESG implementation.
Major financial institutions such as BlackRock, IFC, or sovereign wealth funds from Europe and the Middle East require ESG criteria as a basic investment condition, Anggawira said on Friday.
Second, ESG is believed to reduce operational risks, including social and legal conflicts resulting from mining practices that do not meet environmental standards.
Third, the global commodity market is now ESG-oriented. Europe and Japan, for example, have set carbon standards for coal and metal imports. Commodities that do not meet low-carbon standards risk losing market access.
"Commitment to ESG in the mining industry is increasingly becoming a key factor in attracting investors, both domestic and international," he added.
"However, the impact is not simply binary yes or no but rather selective and transformational," he continued. From an environmental perspective, Anggawira emphasized that emissions from mining vehicles are highly significant.
It's true, mining operations, especially coal and mineral transportation, remain major contributors to carbon emissions, he said.
He noted that most mining vehicles, such as haul trucks and heavy equipment, still use diesel engines and have yet to undergo electrification.