Staff Writer Hari Grassi Bertazzi argues that Indonesia’s record sulphur bill shows the green energy transition is still heavily dependent on the very component it is meant to replace.
A record bill for a forgotten chemical
In June Indonesia paid more for sulphur than ever before. The yellow powder, which few people think about once they leave school, cost the country an average of about $1,100 a tonne, more than three and a half times the price a year earlier. Indonesia bought less of it than in June 2025 but still spent a record $373m and must continue paying due to nickel.
Indonesia now produces around two-thirds of global nickel supplies, and a fast-growing share from plants that dissolve the ore in sulphuric acid to make material for electric-car batteries.
Between January and June 2026, Indonesia spent a staggering $1.27bn on sulphur. The previous year, during the same period, the $628m that was acquired brought in an additional 770.000 tonnes; the bill more than doubled within a year, and this has drawn far less notice than it deserves.
From Hormuz to Indonesia’s nickel plants
Most sulphur is not mined at all. It is stripped out of oil and natural gas during processing. So it is no surprise that the Gulf, with its huge refineries and gas plants, supplies about a quarter of the world’s total. Before the war, about half of all sulphur traded between countries passed through the Strait of Hormuz, and Indonesia relied on the region for around three-quarters of its supply.
As the Strait closed to cargo ships at the end of February, more than 600,000 tonnes were soon stranded on vessels in the Gulf, and Indonesia’s imports over the first half of the year fell by more than a quarter.
This was a heavy blow for acid-leaching plants. They need roughly ten tonnes of sulphur for every tonne of nickel, so each $100 added to the sulphur price raises the cost of a tonne of metal by about $1,000, according to Jim Lennon, a nickel analyst who founded the consultancy Red Door Research in 2013.
“Plants that were among the world’s cheapest nickel producers a year ago are now among the dearest,” he says, and several have cut output, including Huayou Cobalt, a Chinese firm, which roughly halved production at one of its Indonesian plants.
No help from Beijing or Moscow
The obvious ways out have been closed. China, the world’s biggest exporter of sulphuric acid and the source of most of Indonesia’s imported acid last year, halted acid exports from spring until the end of August to protect supplies for domestic fertiliser makers. In effect, Beijing squeezed plants that Chinese firms such as Huayou had built.
Meanwhile, Russia used to be a large sulphur exporter, but has since banned exports until the end of the year and continues to have little to spare. Ukrainian drones have repeatedly struck its gas plant at Astrakhan, which makes about 60% of its sulphur, and last January, Russia’s output of sulphur from gas fell by nearly 30% compared to the previous year. A shortage that begun with one has been escalated by another.
Indonesia is now buying whatever it can. In June, Canada sent more sulphur than any other country, and Kazakhstan has become a big supplier too. New projects could roughly double Indonesia’s own sulphur output to about 1m tonnes a year, but that would still cover less than a fifth of the 5.4m tonnes it imported in 2025.
Guarding the wrong chokepoints
This episode shows that the shift to electric cars still rests on the industry it is meant to replace. Governments in America and Europe have spent years worrying about who controls lithium and rare earths, yet one of the costliest shortages this year has been in a by-product of oil and gas that few of them watch.
The misprioritisation can be witnessed within the West’s own listing. In fact, when Washington updated its catalogue of critical minerals last November, it added phosphate and potash to protect food supplies, but left out the sulphur needed to turn phosphate rock into fertilizer. While members of the International Energy Agency must hold emergency oil stocks, there is no equivalent arrangement for sulphur.
The long-term outlook is more damning. As the world continues to slash its use of fossil fuels, less sulphur gets produced, even as demand for batteries rise. Unless miners learn to use less acid, the war in the Gulf may turn out to be an early taste of a shortage that does not end.
Overall, the sulphur shock may prove to be the clearest evidence we have that the West is guarding the wrong chokepoints in the energy transition. Governments’ top priority so far has been securing the minerals that go inside a battery, with far less attention provided to the cheap chemicals needed to turn those minerals into battery-grade components.
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