RECCESSARY’s “ASEAN Weekly” highlights Southeast Asia’s new energy and carbon market updates. (Image: RECCESSARY)
This week in ASEAN, sustainability developments focus on carbon markets and supply chain compliance. Indonesia’s national carbon market is set to launch in June, with cross-border trading and international alignment in focus. Meanwhile, Malaysia continues to strengthen its sustainable palm oil certification amid the EUDR delay, improving supply chain transparency and compliance. Here are the key ASEAN stories from Feb. 9–15.
Nippon Paper, PLS begin large-scale eucalyptus plantation study in Malaysia to evaluate biochar potential
Malaysia-listed PLS Plantations has partnered with Japan’s Nippon Paper to jointly research large-scale eucalyptus cultivation and assess the feasibility of downstream biomass applications, including biochar and black pellets for carbon sequestration.
The project envisions establishing 20,000 to 30,000 hectares of eucalyptus plantations in Johor state. While Malaysia’s climate and soil conditions are generally considered challenging for eucalyptus farming, the partners aim to evaluate whether the fast-growing species can be commercially viable at scale under local conditions. Read more here
Indonesia eyes forest carbon potential as national carbon market launch nears in June
Indonesia is preparing to fully roll out its national carbon market in June, with large-scale trading expected to begin in July. Authorities are currently working to integrate multiple carbon registry systems, a move aimed at aligning with international standards and strengthening market confidence.
Ahead of the launch, Indonesia has formally joined the Coalition to Grow Carbon Markets, signalling its intention to enhance the quality of nature-based carbon credits and unlock the country’s vast forest carbon sink potential. Read more here
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Indonesia’s carbon exchange, IDX Carbon, has seen relatively low trading volumes and participation compared with other markets. (Photo: IDX)
Malaysia uses EUDR delay to strengthen palm oil traceability, MSPO standards
Malaysia is continuing to expand and refine its national sustainability standard, the Malaysian Sustainable Palm Oil (MSPO) certification, even as the EU Deforestation Regulation (EUDR) faces further delays.
Originally set to take effect in December 2024, the EUDR was first postponed to end-2025 and has now been delayed again. Under the revised timeline, compliance will be required from Dec. 30, 2026 for large and medium operators, and from June 30, 2027 for micro and small enterprises. Rather than slowing efforts, said Malaysia’s Plantation and Commodities Minister Noraini Ahmad, the extension should be treated as an opportunity to strengthen industry readiness. Read more here
Malaysia lost 20% of its coral reefs in three years, survey finds
Malaysia’s coral reefs are shrinking at a pace that is hard to ignore. According to the latest national survey by Reef Check Malaysia, about one-fifth of the country’s coral cover has been lost since 2022, a decline compressed into just three years. What had been gradual erosion now looks more like a slide.
The 2025 survey assessed 297 reef sites across Malaysia, from the tourist-heavy islands off the peninsula to the more remote waters of Sabah. Average live coral cover fell to just under 40%, down from nearly 45% a year earlier. In 2022, it stood close to 50%. Put another way, the loss since 2022 would be equivalent, on a percentage basis, to Malaysia losing around 4 million hectares of forest over the same period. Read more here
Opinion: Vietnam's DPPA and the risk of double-charging under the two-part electricity tariff mechanism
The Direct Power Purchase Agreement (DPPA) mechanism is expected to play a pivotal role in Vietnam’s roadmap toward achieving Net Zero by 2050. Instead of selling electricity exclusively to Vietnam Electricity (EVN), Power Generation Units (GENCOs) can sell electricity directly to buyers, thereby fostering the development of a competitive renewable energy market.
However, during implementation, the Cost Structure must be carefully scrutinized when applying DPPA concurrently with the two-part electricity tariff, as this may directly affect the mechanism's commercial feasibility. The core issue is the risk of double fee calculation, as the capacity charge component in the two-part retail electricity tariff already includes grid system costs, while Decree 57/2025/ND-CP (“Decree 57”) separately stipulates service charges for use of the grid system. Read more here
World Bank cuts Thailand’s growth forecast, calls for green manufacturing pivot
With Thailand’s election results finalized, the passage of the government budget is now expected to proceed on schedule. The World Bank, however, says structural bottlenecks remain unresolved and has downgraded its growth forecast for Thailand this year to 1.6%.
The lender recommends prioritizing solar equipment, electric vehicles and other green industries, describing low-carbon manufacturing as “a promising pathway to reinvigorate the economy.” Read more here
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The World Bank projects Thailand’s economic growth potential at 2.7% and expects green manufacturing to become a key driver of the economy. (Image: Unsplash)
Singapore dials back carbon tax ambitions but doubles down on clean energy
Singapore is leaving room to moderate the pace of future carbon tax increases, with Prime Minister Lawrence Wong saying on Wednesday that the 2030 rate could land at the lower end of the previously announced range as global climate action loses momentum.
At the same time, the government will extend green financing schemes and subsidies to continue incentivising companies to improve energy efficiency and adopt renewable energy. Read more here
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