From Pledges to Progress in ASEAN’s Energy and Climate Investments, Partnerships and Carbon Policy Actions
Wednesday, 30 Apr 2025

Category

Insight

Author

Nathania Azalia, Haningrum Eka Putri Rahayu, Livia Liannasari, Muhammad Ilham Rizaldi, Indira Pradnyaswari, Muhammad Rizki Kresnawan, Aldilla Noor Rakhiemah

Key Points

  • Progress in Energy and Climate Investments: ASEAN is riding a wave of economic momentum, from rising foreign direct investments (FDIs), increasing regional gross domestic product (GDP), and increasing trade, potentially positioning ASEAN to be the world’s fourth-largest economy. This growth is increasingly being channeled into green growth, with Member States attracting major investments in clean energy and sustainable infrastructure, including new funds for renewable energy power plants, a new green tariff, and a new joint venture. Notable examples include Lao PDR’s USD 1.9 billion 1,200 megawatt (MW) Nong wind power plant, the Philippine’s USD 3.67 billion push to expand renewable energy capacity, Thailand’s introduction of a new Utility Green Tariff, and the launch of the Sustainable Asia Renewable Assets Company (SARA), a joint venture between the British International Investment (BII), FMO, and SUSI Partners.  
  • International Cooperation and Partnerships Towards Net-Zero: With Malaysia at the helm of ASEAN’s 2025 Chairmanship, energy has become a priority in the region, especially through the expansion of the ASEAN Power Grid (APG). International collaboration is deepening, paving the way for transformative change. Key initiatives include the ASEAN-Korea Cooperation for Methane Mitigation (AKCMM) between South Korea, ASEAN, and the Global Green Growth Institute (GGGI), the expansions of energy interconnection under the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA) initiative, and Vietnam’s newly-signed partnership between Petrolimex and the Asian Development Bank (ADB) to support its energy transition strategy. 
  • Progress in Carbon Policy Development and Implementation: ASEAN Member States have made significant developments in their carbon markets. Some highlights are Indonesia’s launch of its international carbon trading through the Indonesia Carbon Exchange (IDXCarbon), while Thailand approved a draft regulation to include carbon tax on oil products. In a sign of growing momentum, Thailand also recorded a high-volume carbon trade in the first quarter of 2025 fiscal year, with 101,894 tCO₂eq valued at USD 533,773 was traded in October-December 2024. Looking ahead, Vietnam is set to launch a pilot emissions trading system (ETS) in June 2025, signaling stronger regional alignment with global carbon market trends. 

Stay updated!