What happened at the Energy Transition Meeting in ASEAN

As Southeast Asia’s economies surge, outpacing global growth and driving up energy demand, the need for a sustainable energy transition has never been clearer.

This growth in Association of Southeast Asian Nations (ASEAN) — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – energy demand is fuelling prosperity, but it’s also heightening the region’s exposure to climate risks and emissions.

“ASEAN is now the world’s fourth-largest energy consumer, with demand rising at 3% annually,” said Dato' Sri Haji Fadillah Haji Yusof, Malaysia’s Deputy Prime Minister and Minister of Energy Transition and Water Transformation during the opening plenary of the Energy Transition Meeting in ASEAN on 26 May 2025.

Co-hosted by the World Economic Forum’s Centre for Energy and Materials and the Malaysia Centre for the Fourth Industrial Revolution (MYCenter4IR), this meeting brought together 200 high-level leaders from government, business, academia and civil society to discuss the ASEAN energy transition. Attendees highlighted the need to accelerate ASEAN’s energy transition through actionable solutions – from industrial decarbonization and innovative financing to regional integration and green job creation.

Geopolitical dynamics further complicate this journey to the energy transition. As China–US trade tensions ripple through the region, ASEAN countries must balance economic vulnerabilities and opportunities. China’s investments in clean energy are vital, but new US tariffs highlight the need for resilience.

Jin Liqun, President of the Beijing-headquartered Asia Infrastructure Investment Bank (AIIB) reaffirmed AIIB’s long-term commitment to invest in the region’s green energy future during a special address at the Energy Transition Meeting. And Professor Jeffrey Sachs of Columbia University in New York offered his advice to ASEAN countries as part of a keynote speech to the meeting, telling participants to “ignore the noise and proceed at a good pace”.

At a time of significant global tensions and uncertainty, ASEAN has a critical opportunity to chart its own steady, pragmatic course rooted in regional collaboration. ASEAN can seize the moment to lead on the global energy transition.

Despite ambitious net zero pledges, ASEAN remains heavily reliant on fossil fuels, particularly coal. The energy transition investment gap is stark: ASEAN needs at least $200 billion in annual energy investments by 2030, with three-quarters of that earmarked for clean energy. Only $30 billion was mobilized annually by 2021. Energy Transition Meeting participants called for innovative financing, policy certainty, harmonized standards and robust markets to attract investors and accelerate the shift to net-zero.

Phasing out coal while ensuring energy security and affordability remains a formidable challenge, but growing political will and momentum was on full display at the meeting. Stakeholders unveiled several financial mechanisms to close this gap, including transition credits and carbon markets to accelerate coal retirement, and blended finance structures and philanthropic participation to de-risk capital. New technology, such as advanced nuclear energy deployment via small modular reactors, is also helping to replace baseload power and drive down costs.

Participants also discussed the need to nurture early-stage innovation by connecting startups, corporates, investors and policy-makers. This would create an ASEAN ecosystem where energy transition entrepreneurs can thrive.

No country can achieve a low-carbon future alone. Regional cooperation is critical for harmonizing regulations, integrating infrastructure and enabling cross-border energy trade. Energy Transition Meeting participants called for joint authorities, shared data platforms and standardized market rules to facilitate multilateral power trading and more resilient supply chains.

The ASEAN Power Grid (APG) is particularly important in this respect. Leaders at the meeting endorsed an enhanced MOU for this project, which should be finalized by October 2025. This will launch three task forces covering policy, technical and legal/regulatory issues, which will focus on grid-to-grid multilateral trade, replacing fragmented bilateral exchanges. The APG project involves an estimated $250 billion in capex, with a strong emphasis on private sector mobilization and policy stability. It is central not just to energy, but to digital economy integration, given ASEAN’s data centre boom and fiber-optic infrastructure potential.

Energy Transition Meeting participants also explored the potential for a Clean Economy Agreement, which would build on the APG’s progress. This would draw together various initiatives in the region to a single deal, recommitting to avoid trade barriers on clean energy technologies and accelerating power system transformation and new trade growth.

If fully realized, the green transition could add up to $5.3 trillion to ASEAN’s economy by 2050 and create as many as 66 million new jobs – an unprecedented opportunity for collective action and resilience amid global uncertainty.

As it builds this green transition-fuelled economy, ASEAN must decarbonize its industrial sectors to ensure competitiveness and reach its climate goals. Sector-specific strategies, such as developing industrial clusters, exploring regionalized advanced nuclear frameworks, and decarbonizing transport and industries with clean fuels, are already gaining traction.

Public-private partnerships and cross-sector collaboration will be vital for scaling this innovation and modernizing legacy infrastructure. Upskilling talent and fostering innovation ecosystems will be crucial, even as coal and gas remain part of the near-term energy mix.

Artificial intelligence (AI) is also a powerful enabler. During the Energy Transition Meeting, a fireside chat with the Malaysia Minister of Digital, Gobind Singh Deo, explored the country’s leadership in AI-driven emissions reduction and how smart policy and innovation can deliver tangible results. Investing in talent, data-sharing and strategic alignment on AI will be key as ASEAN continues to build a more sustainable future.

The Energy Transition Meeting in ASEAN was a testament to the power of partnership, particularly as the region's energy transition journey enters a decisive phase. Regional cooperation and multi-stakeholder action are now essential to overcoming investment gaps, policy fragmentation and technical barriers. By working together, governments, business and civil society in ASEAN can accelerate the shift to clean, secure and inclusive energy systems.

The Energy Transition Meeting was held at the same time as the 46th ASEAN Summit in Kuala Lumpur, Malaysia. The energy transition and regional cooperation dominated the agendas of these meetings, as well as that of the recent ASEAN–China–Gulf Cooperation Council Summit, also held in Kuala Lumpur at the end of May. With renewed momentum from these high-level gatherings, ASEAN is poised to lead by example and with pragmatism. Its diversity, regional platforms and partnerships will continue to drive innovation and sustainable growth.

The path ahead will require continued commitment to harmonized policies, investment in modern infrastructure and a just transition that leaves no one behind. The region’s collective efforts today are laying the foundation for a resilient and prosperous energy future.