Rooftop solar panels in Kuala Lumpur. (Photo: Shutterstock)
The green energy utilization rate in the 6 major ASEAN countries is only 8%-9%, approximately half of the global average. A recent report from the Malaysia Investment Bank suggests that in the next 5-10 years, listed companies in ASEAN countries will significantly adopt green energy, especially as global pressure to reduce carbon intensity continues to rise. ASEAN enterprises may achieve short-term carbon reduction goals by improving operational efficiency and increasing the use of green energy.
Maybank Investment Banking Group analyzed 15,803 listed companies globally and found that 22% of these companies disclosed their carbon intensity over the past three years, indicating the carbon emissions per unit of revenue. Among them, 625 companies reported stable or declining carbon intensity numbers.
If we narrow down the sample to the 6 main markets in ASEAN, including companies from Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam (a total of 962 companies), the disclosure rate is 17%. Within this subset, 118 companies reported stable or demonstrated a reduction in carbon intensity.
Jigar Shah, from Maybank’s head of sustainability research, and Neerav Dalal, research analyst, stated that the high cost of battery raw materials hinders the development of large-scale alternative energy solutions. Solutions such as forest or wetland protection or restoration require more robust monitoring mechanisms and the creation of genuine value. Therefore, as the levelized cost of energy (LCOE) decreases, renewable energy is expected to become a fundamental option for manufacturing and transportation industries.
The report also noted that in 2010, the cost of solar power generation was 710% higher than the lowest-priced fossil fuels, but by the previous year (2022), it had become 29% cheaper than fossil fuels.
Further analysis of the 6 major ASEAN countries reveals that only 7% of companies have proposed renewable energy plans, with the Philippines having the highest proportion. In comparison, European companies have a 19% adoption rate, and the United States and Canada stand at 10%. This indicates that ASEAN companies are relatively slow in decarbonizing.
Analysts suggest that as ASEAN countries significantly increase the proportion of renewable energy in the next 5-10 years, there will be a heightened focus on decarbonization issues. This shift is expected to bring opportunities for renewable energy utilities, capital goods, and power transmission, particularly for large enterprises that possess the necessary financial capabilities, technology, and intelligence to leverage decarbonization as a corporate strategy and growth lever.