RECCESSARY’s “ASEAN Weekly” highlights Southeast Asia’s new energy and carbon market updates. (Image: RECCESSARY)
This week in ASEAN, sustainability developments reflected rising energy security pressures alongside policy recalibration and accelerating industrial transition. Malaysia announced a delay in the implementation of its carbon tax. At the same time, Southeast Asian countries are stepping up efforts to expand sustainable fuel production, scaling up both biodiesel and renewable diesel. Below are ASEAN’s key stories from April 20–26.
Asia's GDP growth could fall to 2.4% amid Middle East fuel risks, IMF warns
Diesel prices have surged to three to four times pre-crisis levels, pushing up costs across Asia and adding pressure to an already heavy energy import bill. The International Monetary Fund (IMF) warned that Asia’s reliance on Middle East fuel leaves it more exposed to the ongoing conflict than any other region.
On the sidelines of the IMF-World Bank Spring Meetings in Washington from April 13 to 18, Thailand and Singapore made a joint case that the scale of disruption has moved beyond what individual countries can manage through domestic policy alone. Read more here
Indonesia, Malaysia scale up alternative fuels to tackle energy supply challenges
Southeast Asian countries are accelerating efforts to scale up sustainable fuels in response to ongoing global energy disruptions. In Malaysia, the government is working with 19 biodiesel producers to expand output capacity, aiming to lower production costs and broaden applications across aviation and land transport.
Meanwhile, Indonesia is drafting regulations to allow plastic-waste-derived diesel to enter the market, with initial deployment targeting corporate users. Read more here
Malaysian Deputy Prime Minister Ahmad Zahid Hamidi said that the government will work with 19 private biodiesel plants to expand production capacity. (Photo: Ahmad Zahid Hamidi's Facebook)
RECCESSARY webinar: CBAM enforcement and green power gaps put Thailand, Vietnam manufacturers on the clock
Manufacturing competitiveness in Southeast Asia is shifting. For companies exporting to Europe, a carbon price is now embedded in every shipment of steel, aluminum, or cement. As enforcement approaches full implementation, the gap between factories with verified emissions data and those without will become increasingly difficult to close without timely action.
RECCESSARY’s webinar, “Beyond ASEAN: Mastering Decarbonization Strategy in Thailand and Vietnam,” held on April 21, brought together legal advisors, renewable energy developers, carbon market analysts, and corporate sustainability practitioners to assess the implications for site selection, energy procurement, and compliance planning. Read more here
The Iran war shows why Indonesia must accelerate its energy transition
The Iran war has triggered a global security and energy crisis, and the impact across ASEAN is particularly acute. Indonesia seeks to shield society from inflation while managing the fiscal deficit. The immediate policy responses must not detract from the country’s paramount transition toward renewable energy. Read more here
Malaysia delays carbon tax as energy prices rise, prioritizes carbon market framework
Rising global energy prices are weighing on national decarbonization strategies. Malaysia’s Minister of Natural Resources and Environmental Sustainability, Arthur Joseph Kurup, said on April 21 that the government will postpone the introduction of a carbon tax on the industries to avoid adding to cost pressures on businesses.
Instead, authorities will prioritize rolling out the National Carbon Market Policy (NCMP), focusing first on building a robust market framework to pave the way for future carbon trading. Read more here
Malaysia’s Natural Resources and Environmental Sustainability Minister, Arthur Joseph Kurup, announced a delay to the implementation of the carbon tax. (Photo: Arthur Joseph Kurup's Facebook)
Taiwan firms must factor energy risk into Southeast Asia investments, legal experts say
Geopolitical disruption and tightening supply chains are pushing Taiwanese companies to rethink how they evaluate overseas investment. Energy has moved to the center of that conversation.
At the 2026 Taiwan Overseas Investment Forum, co-hosted by Baker McKenzie and the Monte Jade Association in Taipei, legal advisers and corporate executives outlined how deal strategy is evolving and what Taiwanese companies should watch across Vietnam, Thailand, and Malaysia. Read more here
Singapore updates sustainability playbook for food manufacturers amid export pressures
Tightening environmental rules in key export markets are pushing Singapore food manufacturers to treat greener operations as a commercial requirement rather than a voluntary goal. To address this, Enterprise Singapore has released an updated sustainability guide.
The refreshed Sustainability Playbook for Food Manufacturers, published on April 21, introduces progress indicators across three focus areas: market access and credibility, resource cost reduction, and circular economy opportunities. Read more here
Hanoi rolls out phased low-emission zone plan, boosting e-scooter demand
Hanoi will launch a pilot low-emission zone (LEZ) on July 1, aiming to curb air pollution, ease congestion, and accelerate the transition to green mobility by restricting petrol-powered motorcycles and certain high-emission vehicles in central areas.
With less than three months before implementation, the electric two-wheeler market has already begun to heat up. Read more here
Fossil fuel subsidies and high costs stall energy transition across rural Indonesia
Research by the Center of Economic and Law Studies (Celios) and Greenpeace shows the number of villages across Indonesia using solar energy among households declined by more than a quarter between 2021 and 2024. The authors of the Village Energy Transition Index said adoption of renewable energy in villages may reflect high installation costs and government subsidies for fossil fuels. Read more here
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