Strategic Hedging in Critical Mineral Diplomacy: Indonesia’s Foreign Policy Positioning in the Global Electronic Vehicle’s (EV) Supply Chain on the Green Energy Transition Agenda

Abstract

This article examines Indonesia's strategy in positioning its foreign policy to respond to the global green energy transition agenda, which emphasizes the enhancement of the critical mineral supply chain as raw materials for electric vehicles (EVs). This research applies the hedging strategy concept in foreign policy analysis to assess the calculations and objectives of Indonesia's foreign policy in the EV supply chain. The study employs a qualitative method with an analytical-descriptive approach. Data were collected thru document studies such as academic literature like journals and books, government reports, as well as local and international media. The findings of this research indicate that Indonesia employs a hedging strategy in positioning its foreign policy within the EV supply chain and critical mineral diplomacy by calculating maximum gains thru the utilization of its geopolitical advantage as the world's largest nickel producer. Amid the rivalry between China and the United States as electric vehicle producers, without having to focus on cooperating with one side. Indonesia implemented a policy banning the export of raw nickel ore in 2020 and promoted the domestic nickel downstreaming agenda with cooperation from several countries in terms of investment and nickel export as an important instrument in supporting this strategy. Indonesia makes the commitment to fulfilling the Sustainable Development Goals (SDGs), especially points 7 and 13, a normative framework in legitimizing the nickel downstreaming policy to support the clean energy transition agenda. This research also explores the limits and structural barriers of this strategy, including the capacity imbalances in the nickel mining process for electric vehicle needs, as well as the paradox of the global green energy transition narrative thru the utilization of nickel and the environmental-social impacts at the local level, such as in nickel-exporting countries like Indonesia.