Southeast Asia's Clean Energy Transition

Supportive government policies are crucial in steering private sector investment towards decarbonisation and climate action in Malaysia, said corporate leaders and experts at a recent summit on climate finance.

The concept may seem simple, but it comes with risks and unaddressed questions, experts say. There are ongoing efforts to create the rules for such projects. More details could emerge later this year, or early next.

Accelerating the energy transition might be high on the agendas of Asian governments, but at this week's Energy Asia conference held in Malaysia's capital, oil majors are outrightly saying the world needs more of the fossil fuel.

Tech and regulatory uncertainty, along with buyers unwilling to pay the green premium, means mid-century targets often appear more aspirational than realistic. Frequent updates to interim targets and strategies will be crucial, experts say.

The Monetary Authority of Singapore will launch a public consultation in the coming weeks on its proposal to include additional criteria for a managed coal phase-out in the Singapore-Asia taxonomy, says the central bank’s newly-appointed chief sustainability officer Gillian Tan.

Gas and coal demand is up in South and Southeast Asia, as governments look to get people enough power for live-saving air-conditioning. Greener solutions come with steep price tags, and policy momentum is not guaranteed, experts say.

Several changes to the country’s power development strategy had been made in a span of two years. The regional manufacturing hub has agreed to ditch coal by 2050, and is looking to feasibly make up for the shortfall with renewables and gas.

The Malaysian government also doubled its targeted renewable energy capacity by 2050 and announced that it will allow for the development of self-contained renewable energy systems. More details are to be announced.

In a region where large hydro projects and expanding biofuel plantations coincide with an upcoming coal phaseout, a laissez-faire approach could worsen existing inequalities and mar the success of a clean energy buildout.

A political firestorm has engulfed clean energy permitting, future plans are in limbo and project developers are cutting manpower in the country that holds some 70 per cent of renewables capacity in Southeast Asia.

Malaysia needs a massive shift towards electric vehicles to decarbonise its transport sector and achieve its goal of becoming a carbon-neutral nation by 2050. However, high vehicle prices and a lack of infrastructure are hampering efforts. Malaysia needs a long term and sustainable solution to develop its e-mobility ecosystem, say analysts.

This is equivalent to up to six million jobs that could be created in the region by 2050, said McKinsey’s Vaibhav Dua in a presentation at an Asian Development Bank symposium in Bali, Indonesia.