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New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)

2025: A transformative year for ASEAN collaboration?

29/1/2025

5 min read

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Head and shoulders image of Peter Godfrey Photo: P Godfrey
Peter Godfrey FEI, Managing Director – Asia Pacific, Energy Institute

Photo: P Godfrey

I’m an optimist! Despite numerous calls for greater regional cohesiveness in the past, ASEAN (the Association of South East Asian Nations) stands on the cusp of a transformative era. With a new President in Indonesia championing greater international engagement and Malaysia taking the ASEAN Chairmanship, 2025 presents a strategic opportunity to advance regional energy security and sustainable growth. So writes Peter Godfrey FEI, the Energy Institute’s Managing Director – Asia Pacific.

Achieving net zero and fulfilling climate and biodiversity goals requires a unified commitment and proactive engagement from all sectors of society, including public and private entities, policymakers, civil society organisations and local communities. ASEAN nations must collaborate strategically to overcome the multifaceted challenges of decarbonisation and biodiversity conservation.

 

ASEAN is uniquely positioned to address these challenges, given its rich biodiversity and resource abundance. However, success hinges on leveraging this potential through cohesive regional strategies and partnerships.

 

Southeast Asia’s diversity, combined with an evolving global geopolitical landscape and shifting trade dynamics, necessitates a multifaceted approach to the energy transition. This approach must acknowledge the disparities in economic development, energy access and technological capabilities among member states. According to the International Energy Agency, Southeast Asia’s energy demand is projected to grow by 60% by 2040, emphasising the urgency for sustainable solutions.

 

Unlocking ASEAN’s potential
By aligning national policies with shared priorities, ASEAN’s resource-rich nations can address pressing challenges such as energy access, affordability and transitioning to low-carbon systems. Strengthening collective frameworks, fostering innovation and accelerating the regional adoption of low-carbon technologies at scale could position ASEAN as a global leader in balancing economic growth with genuine environmental stewardship.

 

To achieve these ambitions, ASEAN must focus on three core challenges:

  • Prioritisation – address emissions from wealthier ASEAN economies while ensuring equitable development opportunities for less affluent member states.
  • Transparency – establish robust monitoring and public reporting systems to track progress and enhance accountability.
  • Unified goals – create aligned incentives across stakeholders that foster collaboration based on clear, measurable objectives.

 

Governments must implement clear policies, set ambitious renewable energy targets and invest in enabling technologies such as smart grids. Prioritising cross-border energy trade, phasing out coal plants with community support, and standardising energy policies through ASEAN frameworks are critical steps. Initiatives such as the ASEAN Power Grid demonstrate the potential for collective action but require stronger mechanisms to share best practices.

 

Greater emphasis should be placed on understanding the laws of comparative advantage to identify opportunities for collaborative rather than competitive approaches.

 

The private sector, including nationally owned enterprises, must lead efforts to bring capital, technology and innovation into renewable energy projects. Beyond renewables, deploying other low-carbon technologies – such as green hydrogen, biofuels, and carbon capture, utilisation, and storage – is crucial. This requires a shift from linear business models to systems-focused approaches that prioritise efficiency, waste reduction and sustainable long-term value creation.

 

The scale and complexity of the required investments demand significant support from multilateral entities. Institutions including the Asian Development Bank and the World Bank can play a pivotal role in providing financial support and de-risking private investments through appropriate grants and underwriting appropriate guarantees. They could also finance large-scale infrastructure projects and facilitate the development of carbon credit and biodiversity markets.

 

Civil society and academia are also instrumental in advocating for sustainable practices, conducting region-specific research and fostering public support for low-carbon development projects. Greater emphasis should be placed on understanding the laws of comparative advantage to identify opportunities for collaborative rather than competitive approaches.

 

China and India 
China and India significantly influence Southeast Asia’s energy landscape, presenting both competitive pressures and opportunities for collaboration. Whilst China is a major competitor in securing energy resources such as oil, gas and critical minerals, its Belt and Road Initiative has driven substantial investments in Southeast Asia’s energy infrastructure, including power plants, pipelines and grids. While these investments bolster regional development, they also create risks of dependency and resource competition.

 

China’s dominance in renewable energy manufacturing (eg solar panels and batteries) also challenges the development of Southeast Asia’s local energy industries.

 

Meanwhile, India’s rapidly growing energy demand mirrors that of Southeast Asia, intensifying competition for LNG imports and other fuels.

 

Both China and India depend heavily on imported oil and gas, much of which transits Southeast Asia’s strategic maritime chokepoints, such as the Malacca Strait, raising concerns over energy transport security. Southeast Asia’s fossil fuel reserves, including coal in Indonesia and natural gas in Malaysia and Myanmar, are vital export resources for both nations.

 

Despite these competitive dynamics, multilateral collaboration exists. China participates in ASEAN+3 frameworks (with Japan and South Korea) to enhance regional energy security, while India engages with ASEAN through initiatives like the International Solar Alliance and energy cooperation programmes.

 

Both nations’ significant investments in renewable energy set benchmarks for Southeast Asia, which must scale up its energy transition efforts to avoid lagging in the global shift towards renewables and other low-carbon energy technology developments.

 

ASEAN’s path forward
ASEAN’s ability to lead focused regional dialogues and implement transformative initiatives will determine its success in navigating the energy transition. By prioritising cross-border collaboration, fostering innovation and leveraging its diverse resources, ASEAN has the potential to emerge as a global exemplar for regional sustainable development.

 

This new year offers a rare convergence of leadership opportunities and strategic momentum – a chance for ASEAN to redefine its trajectory and secure a sustainable and economically vibrant future for generations to come.

 

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

 

  • Further reading: ‘Challenges facing ASEAN in the energy transition’. ASEAN brings together a small group of countries that make up an economic powerhouse. Their energy demand is growing; their growth in carbon emissions exceeds the global average; they are home to some of the most vulnerable communities on the planet. What are the significant challenges ASEAN members face as they navigate the energy transition?
  • Decarbonising the energy supply across the 10 member states of ASEAN could see a reduction of $800bn in costs through power interconnectors, hydrogen networks and energy storage infrastructure, according to new research by DNV.