Southeast Asia’s Shift to Clean Energy Is Its Best Economic Opportunity
From electric vehicles to the power sector, RMI is working across Southeast Asia to support the region in creating real and lasting change.
As governments gather at COP30 to advance a just transition to clean energy, RMI continues to drive whole-system solutions across sectors that can turn commitments into actions. Globally, RMI supports initiatives that help regions unlock the economic opportunity of clean energy, such as workforce development, resilience planning, and the preparation of bankable and derisked project pipelines.
Southeast Asia is one region well poised to capitalize on the myriad benefits of clean energy. Set to drive 25 percent of the increase in global energy demand by 2035, its economic and industrial development and population growth hinges on an expanded power supply. Fossil fuels have met nearly 80 percent of this rising demand, leaving economies within the region, like the Philippines, exposed to the volatility of global fuel prices.
Clean energy helps with the regions rapid growth
Expanding Southeast Asia’s clean energy market is an economic growth imperative. Its urban centers, home to over half of the region’s population, are grappling with record heat and some of the world’s worst air quality. In Indonesia’s metro areas alone, over 140 million two-wheel and 20 million four-wheel vehicles have contributed heavily to these conditions; in 2020, transportation accounted for 21 percent of energy-related climate pollution emissions. But innovators are changing this trajectory. Electric vehicles are lowering costs for households and businesses while opening new economic opportunities.
At the same time, these same urban populations face intensifying demand for cooling — another key contributor to energy use and emissions. As temperatures rise, affordable and super-efficient cooling technologies are essential. With Southeast Asia’s population expanding rapidly, the region has a critical opportunity to deploy new approaches that cut energy waste, reduce emissions, and maintain comfort, all while advancing economic resilience.
Opportunities and barriers
Yet despite promising examples of innovation, Southeast Asia is capturing only a fraction of the global energy transition momentum. Worldwide investment in clean energy is set to reach US$2.2 trillion by the end of the fiscal year, but Southeast Asia accounts for only US$48 billion of that total — only a 22 percent increase over the previous decade.
Countries in Southeast Asia, while home to some of the youngest coal fleets in the world, nevertheless understand the opportunities that a just transition to cost-effective, abundant clean energy provide for their growth and future security. When given the choice between decades of fossil fuel lock-in or unlocking less expensive alternatives, they can choose a different growth path for better returns.
Amid the opportunities, significant headwinds still exist toward realizing the region’s clean energy potential. Decision makers at COP and beyond need to adopt policy frameworks that provide a hospitable environment for finance to be able to flow into these markets so that they can grow.
RMI helps overcome these barriers by making a clear business case for a market-driven transition to clean energy. Whether through heavy industry, transport, or the current and future power system, RMI’s teams work at the forefront of new technologies and projects that create real and lasting change.
RMI’s Southeast Asia Initiatives
Indonesia: A Whole-Economy Approach to a Just Transition
- Advancing Clean Metals: The scale of Indonesia’s nickel and aluminum processing has established the country as one of the key players in critical mineral downstreaming. However, this industrial expansion is increasingly powered by off-grid, coal-fired captive power — posing a significant challenge to Indonesia’s climate commitments and long-term competitiveness. RMI’s Advancing Clean Metals report presents a new analysis on the growing role of captive power in Indonesia’s mineral sector.
- Indonesia’s Just Energy Transition Partnership (JETP): This report and retrospective provides recommendations for transforming JETP from a climate pledge into Indonesia’s engine for clean-energy-driven prosperity.
- Why an Integrated Approach Is Needed for the Transition from Coal to Clean: This article outlines the need to take a whole-systems approach to exploring solutions for Indonesia’s coal-to-clean power sector transition journey.
- Transforming Indonesia’s Transportation: This report outlines the necessary policies, technologies, financing structures and collaborations needed to support Indonesia’s ambitious target of 13 million electric two-wheelers and 2 million electric four-wheelers by 2030.
- Global Women in Clean Energy Fellowship (GWiCE): Modeled after RMI’s Energy Transition Academy work in Africa, this first Indonesian cohort starting in November 2025 responds to the country’s energy transition priorities and the community-building needs of women working on the energy transition.
Philippines: Laying the Groundwork for Clean Energy and Methane Mitigation
- Transitioning to Clean Electricity: RMI and partners are supporting stakeholders in the Philippines to transition toward an increasingly renewable power system while improving affordability, reliability, and energy security. This includes strengthening the enabling environment for battery energy storage to increase grid flexibility and integrate variable renewables; identifying opportunities to switch planned thermal assets to cleaner alternatives; and testing innovative approaches to transitioning existing coal assets.
- Philippine Market Movers: To explore and support the Philippine government’s push for renewable energy development in the country, RMI wrote a report explaining the three high potential areas to accelerate the offshore wind market.
- WasteMAP: The Waste Methane Assessment Platform (WasteMAP) gives policymakers, landfill operators, municipalities, and other sector stakeholders improved access to waste methane emissions data. This work enhances their understanding of mitigation opportunities and shares best practices to reduce solid waste methane emissions. RMI recently expanded our country engagement to the Philippines, where we are working with policymakers and waste sector stakeholders in Quezon City and Metro Manila to reduce waste methane emissions.
Singapore: Innovating Climate Finance for Regional Energy Transitions
- RMI Climate Finance’s Transition Pathway Repository & Regionalizing Transition Intelligence Report: This tool and report provides actionable guidance to support client transition assessments for high-emitting sectors in emerging markets.
- Transition credits are a new class of carbon credits that monetize the emissions reduction from early coal retirement, enabling not only a coal plant’s managed retirement but also helping to finance renewable energy replacement and just transition measures. RMI’s Southeast Asia team leads the TRACTION Secretariat in advancing this market-based financial instrument to transition Asia’s enormous coal fleet to renewables.
Regional Collaboration and Catalysts: Accelerating Southeast Asia’s Climate Solutions Ecosystem
- Startup Ecosystem Building: The Future Industries Partnership helps accelerate the deployment of innovative climate technologies needed to decarbonize heavy industries such as steel, cement, and chemicals across Asia and the Middle East, with a focus on Singapore and Indonesia.
Southeast Asia’s Clean Energy Opportunity
Emerging economies in Southeast Asia don’t just need access to clean energy. They need to make it a source of lasting economic advantage. The opportunity lies in building competitiveness across sectors through decarbonization, while strengthening the resilience of power systems, industries, and community livelihood. At RMI, we are working to align finance and innovation to help Southeast Asia realize the economic benefits of clean energy.
