Key Points

• The Nationally Determined Contributions 3.0 and ASEAN’s Road to the 1.5°C Goal: This year marks a critical milestone for global climate ambitions with the submission of the Nationally Determined Contribution (NDC) 3.0. In ASEAN, Singapore has taken the lead and submitted the updated NDC for 2031-2035 with targets including the reduction of 45-50 million tonnes of carbon dioxide equivalent (MtCO₂e) by 2035, phasing down unabated coal, expanding solar power capacity, and increasing clean energy imports. Other ASEAN Member States (AMS) are expected to submit their updated NDCs in the latter half of 2025. 
• New Energy-Climate Financing Across Southeast Asia: Southeast Asia is seeing significant progress in clean energy financing, as new funding avenues supporting the region’s shift toward sustainable energy. Pentagreen Capital and British International Investment (BII), collaborating with ib vogt Singapore Pte. Ltd., launched a joint USD 800 million financing to advance renewable energy construction. In the Philippines, the World Bank rolled out a USD 800 million loan through the First Energy Transition and Climate Resilience Development Policy Loan to increase the country’s renewable energy share to 42% by 2027. Meanwhile, in Indonesia secured two major World Bank investments totaling USD 2.1 billion to expand access to clean energy. 
• ASEAN’s Progress in the Energy and Climate Change Cooperation: Amid shifting global dynamics, regional integration and cross-border collaboration remain central to ASEAN’s energy and climate agenda. The ASEAN Power Grid (APG) continues to advance, with the signing of the Renewable and Interconnected Sustainable Energy (RISE) agreement between Malaysia’s Petronas and Tenaga Nasional Bhd with Singapore’s Sembcorp Industries and Vietnam’s Petrovietnam. Other notable developments include Singapore’s and the Philippines’ commitment to carbon market collaboration; a joint initiative between Indonesia’s Ministry of National Development Planning, South Korea’s Ministry of Environment, and the Global Green Growth Institute (GGGI) on sustainable transport; and elevation of Singapore-France relations to a Comprehensive Strategic Partnership (CSP), emphasising nuclear energy cooperation. 
• Progress in Carbon Policy Development and Implementation: AMS are moving forward with carbon pricing instruments such as carbon taxes and emissions trading systems. Singapore remains at the forefront, having signed carbon market implementation agreements with Peru, Chile, Rwanda, and Paraguay under Article 6 of the Paris Agreement. Moreover, Singapore, the United Kingdom, and Kenya launched a government-led coalition to boost voluntary carbon market demand and unlock private sector investment.  Vietnam approved a new legislation regarding its emissions trading scheme, with a three-year pilot programme covering steel, cement, and thermal power sectors. Moreover, Indonesia recorded carbon trading transactions amounting to 690,675 tonnes of carbon dioxide equivalent (tCO2e) of carbon units, a significant rise from 413,764 tCO2e in 2024.