Indonesian nickel pig iron (NPI) has effectively lost access to the European market as the EU's Carbon Border Adjustment Mechanism enters its definitive phase in 2026. French mining and metallurgy group Eramet says Indonesian NPI production relies heavily on captive coal-fired power, giving it a high carbon footprint that now translates into a direct cost disadvantage in Europe. The shift signals that carbon intensity is becoming a core commercial factor for nickel and stainless steel raw materials, not just an ESG talking point. The near-term risk for Indonesian exporters is trade diversion. If NPI can no longer compete in Europe, more material will likely flow to markets without a carbon border price, such as China and India. That would ease pressure on Indonesian producers but do nothing for global emissions. The longer-term question is whether NPI producers will invest in cleaner power or cleaner feed to retain access to premium markets. CBAM is meant to change investment decisions, and this is one of the first clear cases where it appears to be doing so.
