Southeast Asia Green Economy Report 2024 produced by Bain & Company, GenZero, Standard Chartered, and Temasek- answers key questions about Southeast Asia’s green transition and trajectory
Report opening statement by Satish Sankar, Bain & Company Regional Managing Partner Asia Pacific- “Southeast Asia governments are grappling with the challenges of rising energy demand (that will grow by nearly 42% over the decade to 2030), a burgeoning middle class, strong pressure not to increase energy and electricity prices, and the need to deliver just and equitable growth—before even considering ambitious plans to decarbonize and build the industries of tomorrow. Four countries in ASEAN have raised climate commitments, and seven are now considering carbon pricing measures to promote action. While the challenges are considerable, there is much room for optimism, as at least the first wave of available levers can meet much of the region’s decarbonization commitments to 2030 if executed with collective commitment and collaboration”.
Kimberley Tan, GenZero, Managing Director and Head of Investment Group. “We believe that an acceleration of effort by countries, corporates and investors is imperative as Southeast Asia remains woefully off-track despite significant progress in 2023. Emissions increased by 13% or 400 MtCO2e in 2023 and will continue to increase as primary energy consumption increases alongside GDP growth. Renewable energy investment in Southeast Asia increased by 9% in 2023. However, renewable energy constitutes less than 10% of electricity generation in the region. Total green investment increased by 20% from $5.2 billion to $6.3 billion in 2023 but remains far short of the $1.5 trillion needed to fund the Southeast Asia’s transition by 2030. It is therefore critical that all stakeholders act collectively and decisively to drive the system-level change required to accelerate and scale decarbonization across Southeast Asia”.
Patrick Lee, CEO Singapore and ASEAN Standard Charter. “What will it take for a nation to reach net zero? Rather than a singular effort, it’s increasingly clear that a collective determination to navigate complexity and build shared action towards a green and sustainable economy is the way forward. As a region, ASEAN is the fourth largest energy consumer in the world. Energy demand in ASEAN has increased on average by around 3% a year over the past two decades, and this trend is set to continue up until 2030, according to the International Energy Agency. Governments across ASEAN have set out long-term plans for a more secure and sustainable future, with many having already announced net-zero emissions and carbon neutrality targets, which will help propel energy efficiency improvements and the transition to a clean energy economy. But to accelerate progress, we need to move further and faster. This will require bold action, knowledge of the market and stakeholder support from government, philanthropy and the private sector. As the only international bank present in all 10 ASEAN markets, Standard Chartered is well positioned to leverage its network from Singapore as an Asia super-connector”.
Kyung-Ah Park, Head, ESG Investment Management & Managing Director, Sustainability, Temasek. “As an investor seeking to deliver sustainable returns over the long term, Temasek has stepped up to deploy capital towards companies with pivotal technologies or innovative nature-based solutions that support the region’s journey towards net zero. For example, we worked with Breakthrough Energy Ventures, GenZero and Wavemaker Impact last year to establish Rize.Farm, an agri-tech startup that aims to decarbonise rice cultivation— the region’s leading source of methane emissions—starting with Indonesia and Vietnam as its first two markets. Rize.Farm is building a platform that will identify and implement the most effective strategies to reduce greenhouse gas emissions in rice cultivation and the right economic incentives to drive the adoption of sustainable cultivation techniques”.
Download the Full Southeast Asia Green Economy Report 2024 produced by Bain & Company, GenZero, Standard Chartered, and Temasek
ASIA’S ECONOMIC CLUSTER COLLABORATION IN A GREEN TRANSITION
Clusters of collaboration, including upstream and downstream supply chains, financial service firms, skilling providers, and shared service providers, enable economies of scale and help maintain competitiveness in the global market.
In the broader Asia-Pacific region, South Korea’s Songdo International Business District stands out as a model for sustainable urban development. In Southeast Asia, Indonesia is developing the first SEA Net Zero Industrial Park- a Net Zero Industrial Park in South Sulawesi, focusing on nickel processing and EV battery manufacturing, powered entirely by wind and solar energy.
Governments are intensifying efforts to foster green innovation. Australia’s National Clean Energy Skills Initiative and the UK’s Green Jobs Taskforce are driving upskilling programs to meet the workforce demands of the green transition.
Southeast Asia is following suit. A 500-megawatt YTL Johor, Malaysia, Green Data Center Park with a MYR1.5 billion ($430 million) investment – with Sea as the anchor tenant, aiding in reducing its carbon footprint and achieving sustainability goals.
Vietnam’s green textile industry is evolving to meet EU importers’ eco-regulations. For example, the Hanosimex and Hansae groups will be the first in Vietnam to establish a complete supply chain using recyclable fabrics. In Indonesia, a consortium led by the Bakrie Group aims to support the global EV supply chain and attract multi-billion-dollar investments between Indonesia and the UK.
The green transition offers significant investment opportunities. Global green investments have surged in recent years, with a 40% increase in clean energy investments alone.
