RECCESSARY’s “ASEAN Weekly” highlights Southeast Asia’s new energy and carbon market updates. (Image: RECCESSARY)
This week’s ASEAN sustainability developments highlight shifts in energy policy and challenges in regional power cooperation. Indonesia’s plan to export renewable energy to Singapore has stalled amid regulatory and political hurdles. Meanwhile, the Iran war has fueled volatility in global oil prices, prompting Vietnam, Thailand and Indonesia to roll out responses ranging from fuel tax adjustments and subsidies to expanded biofuel development. Below are the key ASEAN stories from March 9–15.
Regulatory risks slow Indonesia’s solar power export projects to Singapore
Indonesia’s plan to export solar power to Singapore has run into obstacles, with several projects showing little progress since companies signed memorandums of understanding (MOUs) in 2023. Analysts say strict electricity regulations and political considerations have slowed project development and complicated financing efforts, raising doubts over whether electricity exports can begin as planned in 2028. Read more here
Thailand eyes DPPA rollout, power market reform as new government takes shape
Thailand is expected to form a new government this month, potentially clearing the way for the launch of a new power development plan and long-delayed renewable energy initiatives. The People’s Party (PP), which secured 120 of the 500 seats in the new parliament to become the second-largest party, has pledged to advance nine legislative packages. Key priorities include reducing electricity prices and strengthening environmental protection.
Several renewable energy initiatives introduced before the election, including a pilot direct power purchase agreement (DPPA) scheme targeting data centers and a solar-powered water pump program, have been delayed pending the formation of the new government. Read more here
Iran war: Southeast Asia moves to cushion oil shock with subsidies, alternative fuels
International oil prices have swung sharply. After U.S. President Donald Trump suggested on March 9 that the war could soon end, prices quickly retreated but remained near recent highs. Southeast Asian economies, many of which rely heavily on imported fossil fuels, are moving to cushion the impact.
Vietnam plans to remove fuel import tariffs and streamline crude trading procedures, while both Indonesia and Thailand are considering extending fossil-fuel subsidies to ease the pressure. At the same time, governments are stepping up the development of alternative fuels such as bioethanol. Read more here
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Tensions in the Middle East drive up global oil prices, prompting Southeast Asian countries to implement contingency measures. (Photo: Unsplash)
Thailand tightens embrace of fossil fuels amid Middle East conflict
On March 4, Thailand’s government ordered the Ministry of Energy to secure new energy sources within a week to reduce the nation’s reliance on Middle Eastern oil. Officials initially said Thailand had a 61-day fuel reserve, but Deputy Prime Minister Phiphat Ratchakitprakarn clarified that total reserves can last 90 days when including supplies that don’t come via the strait. To bridge the immediate gap, the Energy Regulatory Commission (ERC) has approved an urgent purchase of three additional one-time LNG shipments for March and April. Read more here
Philippines’ stricter oversight reshapes how renewable developers manage project risks
The Philippines is tightening oversight of renewable energy projects as it pushes to turn auction awards into real power generation. From 2024 to 2025, the Department of Energy (DOE) terminated 163 renewable energy service contracts that failed to comply with the requirements of the Green Energy Auction Program (GEAP), representing a combined potential capacity of 17,904 MW.
The growing pressure to close this gap is increasingly reflected in the government’s stricter oversight of project execution. For developers, securing a contract through the country’s green energy auctions is no longer the main milestone. What matters now is whether projects can be delivered on time and successfully connected to the grid. Read more here
Malaysia shifts EV strategy toward local manufacturing as import tax breaks end
Malaysia is shifting its electric vehicle (EV) strategy toward local manufacturing and technology development, as the government moves beyond earlier policies that relied largely on tax incentives to stimulate EV imports. The policy shift comes as Malaysia’s EV market expands rapidly, driven in part by the entry of Chinese automakers that have captured significant market share but have yet to establish deep local supply networks.
According to Malaysia Automotive, Robotics and IoT Institute (MARii) CEO Azrul Reza Aziz, earlier waves of automotive investment, particularly from Japanese manufacturers, built extensive supplier ecosystems over several decades. New EV entrants, however, will likely need to bring in technology partners and develop local vendor networks to support production and innovation. Read more here
Iran war: Indonesia’s B50 biodiesel plan faces palm oil supply, price uncertainty
The closure of the Strait of Hormuz has reignited debate over accelerating bioenergy development as an alternative to fossil fuels. Indonesia, the world’s largest palm oil exporter, is considering reviving its B50 biodiesel program.
However, industry representatives warn that expanding biodiesel production capacity or raising blending mandates could reduce export volumes. Expectations of strong biodiesel demand have already pushed up global palm oil prices, adding further uncertainty to the proposed B50 rollout. Read more here
Indonesia is evaluating increasing the biodiesel blending mandates to reduce reliance on imported energy. (Photo: iStock)
Indonesia’s JETP dilemma: Why the world’s largest climate finance deal struggles to deliver
“Justice” is a common tagline in climate finance initiatives, including JETPs. The research shows that JETP documents include justice “standards”, such as preserving cultural heritage or respecting labour rights. But these remain guidelines that are not legally binding.
According to the JETP secretariat, by mid-2024, 19 programmes totalling US$144.6 million had been launched, or were in the final phase of discussions. Yet, Eco-Business reported in October 2024 that none of the pledged transition finance had “translated into new clean energy projects or the early retirement of coal-fired power plants”. Read more here
Iran war: Oil price volatility may accelerate EV adoption in Southeast Asia, ADB says
Rising oil prices could strengthen the appeal of electric vehicles (EVs) in Southeast Asia, particularly as expanding renewable energy capacity continues to push electricity costs lower, economists at the Asian Development Bank (ADB) said.
The region is already emerging as a key growth market for EVs. Energy think tank Ember said demand growth in Southeast Asia has surpassed that of both Europe and the United States in recent years. Read more here
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