South & Southeast Asia

ABDUL AZIZ OTHMAN President, Malaysian Gas Association and IGU Regional Coordinator

Southeast Asia continues to establish energy policies and roadmaps aimed at ensuring a just energy transition.

Natural gas as the cleanest fossil fuel provides stable and affordable energy for nations in South & Southeast Asia. The gas industry is growing fast and has a lot of potential in natural gas demand. ASEAN’s natural gas demand is expected to grow by up to 250% by 2040 compared to 2017 in the baseline scenario and financial institutions in the region are expected to continue supporting investment in natural gas infrastructure. Finding a balance between energy security, affordability and sustainability remains a top priority for the countries in the region. And they continue to hone their energy policies to better ensure this balance. Many of ASEAN’s 10 member states show a strong commitment towards achieving net zero, albeit with differing timeframes. Nevertheless, the policy environment generally favours a low-carbon energy future and the region remains on track to deliver a 23% share of renewables in the total primary energy supply by 2025. Hence, the role of gas will become more prominent to complement those renewables.

» Malaysia expects to complete its National Energy Transition Roadmap in June this year. It will set a long-term pathway towards achieving net-zero emissions as early as 2050. As a reference document, IRENA in collaboration with the Malaysian government released the Malaysia Energy Transition Outlook (METO) in March.

» Other policies relating to energy expected to be released this year in Malaysia include the Natural Gas Roadmap, the Hydrogen Economy and Technology Roadmap and the National Biomass Action Plan.

» Malaysia, Thailand and Cambodia will be putting together their long-term strategy plans in the Energy Efficiency and Conservation Act (EECA) this year, to regulate energy efficiency and conservation in the respective countries. The act will encourage consumers to adopt more efficient equipment and appliances, better manage their energy consumption and reduce wastage. Cambodia’s energy efficiency will establish strategies for upcoming developments and a reduction in energy consumption of at least 19% by 2023. Meanwhile Thailand’s Energy Efficiency Plan will boost energy conservation by 49,000 kilotonnes of oil equivalent (ktoe), from 30% in 2018 to 36% over the next 15 years.

» Countries in this region have scaled up energy funding to unleash sustainable investments for the energy transition. At the G20 2022 summit in November 2022, Indonesia launched the Energy Transition Mechanism (ETM) Country Platform to collect investments from public and private sectors, mobilise funding, and channel fiscal support for climate action. The platform has allocated $500mn and circulated over $4bn to close 2-GW of coal-fired power generation by 2040.

» Indonesia and Vietnam late last year signed a Just Energy Transition Partnership agreement to tackle climate change by reducing the use of fossil fuels and developing renewable energy sources. These investments will be used to phase out coal and expand renewable energy to meet 34% and 47% of power generation in Indonesia and Vietnam respectively by 2030.

nation’s inaugural carbon credit auction on March 16. Energy is a critical component of modern society, powering homes, businesses, and industries. But in South Asia, access to reliable, secure and affordable energy remains a significant challenge.

» India’s gas industry is undergoing significant changes as the government pushes for greater use of cleaner fuels and renewable energy sources. There has been a shift towards natural gas with the government taking several measures such as launching the Pradhan Mantri Urja Ganga pipeline project, which aims to connect Eastern India to the national gas grid. The government has also developed several LNG terminals to expand gas supply. Previously, cooking natural gas was only available in the country’s north and west. With a 40% viability gap allowing the nation in this region to access lower prices for CNG and piped cooking gas, the pipeline will extend access to far-off areas including eastern states.

» Pakistan’s government has taken several measures to address the challenges facing the gas industry, including ensuring a stable supply of gas and promoting the use of renewable energy sources. In November last year, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the Private Power and Infrastructure Board (PPIB), and the Sustainable Development Policy Institute (SDPI) launched the SDG 7 Roadmap for Pakistan aimed at supporting the government in developing policy measures to achieve the SDG 7 targets. The roadmap suggested the country support greater energy efficiency and expand the share of renewable energy in total final energy consumption to 23.5% in 2030.

» Bangladesh drafted a new Integrated Energy and Power Master Plan (IEPMP) for the 2024-2050 period, to ensure an affordable, sustainable and secure energy supply. Under the draft plan, gas consumption by the energy sector will grow between 160% and 360% to generate 30% of power by 2050. Imports of LNG are projected to grow to 49 MT. With the expected installation of two more privately-owned offshore units and an onshore LNG terminal, the draft plan estimates that about half of the required investment for power generation will go to the gas sector.

» Malaysia’s government has recently lifted the ban on exports of renewable energy, as part of a policy review to spur growth. The government is also raising its 2050 renewable energy capacity target to 70% of the total mix, versus a previous target of 40%.

» In a similar vein, the Ministry of Finance and Monetary Authority of Singapore (MAS) announced the launch of the Finance for Net Zero (FiNZ) Action Plan to mobilise financing to accelerate the net-zero transition in Singapore and elsewhere in Asia. These funds will support expanded investment, lending, insurance, and related services to progressively decarbonise areas such as power generation, buildings, and transportation.

» Meanwhile, Malaysia established a carbon market this year when its Bursa Carbon Exchange successfully carried out the