Indonesia's North Kalimantan is in the process of constructing the Adaro aluminum project, with a long-term plan for an annual aluminum production capacity of 1.5 million tons. This project, backed by Indonesia's renowned coal company, the Adaro Energy Group, utilizes coal power and has garnered significant attention from both domestic and international media due to Chinese investment and operation involvement.
Since its announcement, the project has been mired in controversy, with the primary concerns revolving around its economic viability and the high CO2 emissions resulting from coal-powered operations, drawing widespread criticism from the public.
According to a recent study by IEEFA, the Adaro aluminum project's Phase One (500,000 tons/year) utilizing coal power and constructing a thermal power plant could result in CO2 emissions equivalent to nearly 1% of Indonesia's total emissions in 2021.
Another issue is Indonesia's reliance on large-scale thermal power plants fueled by coal. This reliance stems from the lengthy construction period for hydroelectric projects in Indonesia. The largest hydroelectric plant in Indonesia, the Mentarang Hydroelectric Power Station with a capacity of 1.37 gigawatts (GW), broke ground in March 2023 and is scheduled to enter the construction phase in the first quarter of 2024, with operation expected by 2030. This plant will provide eco-friendly power to North Kalimantan's industrial zone and meet the electricity demands of the Adaro aluminum project's Phase Three (with an annual capacity of 500,000 tons).
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