Jakarta, May 20, 2025 – Southeast Asia has become a region with an average economic growth of above 5 percent for five consecutive years. This growth outperforms the Organization for Economic Co-operation and Development (OECD) countries which are in the range of 2.3 percent. This economic growth trend is accompanied by energy demand which is projected to continue to increase. The demand for renewable energy is projected to increase 3-5 times by 2035. ASEAN has a target of a renewable energy mix of 23 percent by 2025, but currently ASEAN has only recorded 19 percent renewable energy in its energy mix.

Arief Rosadi, Manager of the Energy and Climate Issue Diplomacy Program at the Institute for Essential Services Reform (IESR), stated that ASEAN has a number of systematic challenges including financing, microeconomics, and policies.

“This often makes ASEAN lose momentum and opportunities to take a more strategic role in global negotiations and opportunities to strengthen its economic growth,” said Arief at the ASEAN+3 Green Transition webinar.

Arief also added that with the ongoing trade war between the United States and China, the ASEAN region has the opportunity to take the opportunity to become a hub for the renewable energy manufacturing industry. To achieve this, there are a number of prerequisites including how to attract investment, encourage regional cooperation, and accelerate regional integration to ensure inclusive economic growth.

According to Arief, encouraging ASEAN to continue pursuing a green transition will not only have an impact on a more protected environment, but will also have an impact on more sustainable economic growth.

Sharon Seah, Senior Fellow of the Yusof Ishak Institute (ISEAS), Singapore and Coordinator of the ASEAN Studies Center and Climate Change in Southeast Asia Programme, said that China’s experience in successfully carrying out a massive and systematic transition can be a learning model for Southeast Asia. China is recorded to increase renewable energy capacity (solar and wind energy) to 1,482 GW by 2024. This capacity has exceeded the capacity of its fossil power plants.

“China has gained economic benefits and strategic position from its green transition. There have been many studies showing that China’s green regulations and subsidies have actually stimulated economic growth while encouraging the adoption of renewable energy. This can be seen as a real example for countries in Southeast Asia that by pursuing the green transition agenda, economic growth will continue to grow,” she said.