by Leandro Gian Sutanto and Indira Pradnyaswari

The ASEAN countries have been experiencing a rapid economic development, but this progress also comes with a significant climate challenge. As its energy demand is expected to grow by 60% by 2040, intensive use of fossil fuels will generate emission and expose the region to the effects of climate change. The core dilemma for ASEAN is how to reconcile its economic ambition with its environmental responsibility. Meanwhile, ASEAN needs to align its approach to dealing with climate change (SDG 13) and to provide clean energy that everyone can afford (SDG 7). Instead of prioritising one over the other, the region must highly consider energy transition.

However, ASEAN Member States (AMS) have long depended on coal fired power plants for their electricity supply. This dependence triggers a cascade of issues, exposing ASEAN economies to volatile global fuel prices and energy security risks which lead to external shocks. This reliance poses a serious challenge, as ASEAN is categorised as a climate-vulnerable region. In this context, continuing to rely on fossil fuels is not only unsustainable but also increasingly risky for long-term energy planning. Moreover, fossil-based fuel utilisation could hinder ASEAN’s alignment with Paris Agreement’s goals, as it could significantly undermine global efforts to limit warming and transition to a low-carbon future.

While the technology adoption of renewable infrastructures rapidly increases, challenges persist in the financing mechanism in building new renewable energy projects. This includes high capital investment, operation and maintenance cost, and further process that is related to the life cycle of the power plant. Moreover, government subsidies are also keeping fossil fuels’ price more affordable if compared to cleaner energy fuels. From a technical perspective, such as ASEAN Power Grid (APG) initiatives, the challenge lies in the stability of grid infrastructure. With the fluctuated power supply generated by renewable sources, grid stability is vital to ensure that electricity is evenly transmitted throughout each grid. To meet this requirement, major investments in smart grids and energy storage strongly recommended to improve the electricity transmission process. On top of that, renewable energy transition is likely affected by the geopolitics situation and supporting policies which apply nationally or at regional level. These uncertainties have resulted in lower interest among investors due to unclear regulation, standard, and investment pathways.

In Vietnam, an ambitious policy centered on feed-in tariffs triggered a remarkable expansion in solar capacity, showing the potential for rapid transformation. The primary challenge, however, is that this growth quickly overwhelms the existing electrical grid, leading to forced shutdowns of new facilities. The situation clearly demonstrates that successful energy policy must be tightly integrated with robust infrastructure planning.

To fix its energy challenges, ASEAN Member States require solutions both on national and regional level. On regional, the proposed idea in this article is the “ASEAN Circular Energy Hub,” a plan based on three things: reusing waste, getting the government and businesses to collaborate, and involving local communities.

The plan is to turn local trash from farms, cities, and factories into energy. This will not be a single giant project, but a collection of small projects that fit the needs of each community. For example, a village can change leftover rice husks into electricity, while a city can use its garbage to power public buildings.

What makes this idea special is that it solves many problems simultaneously. It cleans up waste, creates local jobs, brings power to remote places like schools or clinics, and reduces harmful pollution from dumps. Turning trash into something valuable can help communities become stronger and grow in an environmentally safe way.

This model strongly supports key SDGs: 

• SDG 7 (Affordable and Clean Energy): By converting low-cost local waste into energy, it increases access to affordable and clean power, especially for remote communities. 
• SDG 13 (Climate Action): It helps fight climate change by replacing fossil fuels, capturing methane from organic waste, and fostering a low-carbon development model. 
• SDG 12 (Responsible Consumption and Production): The model is a perfect example of this goal, as it treats “waste” as a “resource” and helps accelerate the shift to a circular economy. 

To implement this model, it is essential to overcome major policy, financial, and technological obstacles through a multi-faceted strategy: 

• Supportive Policies: Governments need to establish clear regulations, such as streamlined permits and standard tariffs, to make small-scale bioenergy projects viable and appealing. 
• Innovative Financing: A mix of public funds to reduce project risks and private investment is crucial. Tools like green bonds and impact investing can also direct capital to these initiatives. 
• Working Together: If all the countries in Southeast Asia create a way to share their best ideas, skills, and successful rules, they can all learn from each other. This will help everyone start using these good ideas much faster. 

The energy challenge in ASEAN is not about choosing between economic progress and climate responsibility, but it is about finding a way to achieve both. The region’s future wealth depends on its capacity for innovation. Ideas like this show a clear way forward. They can turn big problems like waste into solutions that give us energy and help countries stand up to climate change. To build a clean and successful future that lasts, Southeast Asian countries must learn to reuse materials instead of throwing them away. They need to lead the way in this new clean energy movement.