Southeast Asia Projected to Drive Global Energy Demand Growth, Facing Challenges for Climate Goals and Energy Security

Southeast Asia is set to become a major driver of global energy demand over the next decade, fueled by rapid economic growth, population increases, and expanding manufacturing, according to a new IEA report. This surge poses significant challenges for the region’s energy security and its national climate goals.

The report indicates that, under current policies, Southeast Asia is projected to account for 25% of global energy demand growth between now and 2035, ranking just behind India. By mid-century, the region’s energy demand is expected to surpass that of the European Union.
While clean energy sources like wind, solar, modern bioenergy, and geothermal are anticipated to meet over a third of the region’s energy demand growth by 2035, this shift is insufficient to curb energy-related carbon dioxide emissions, which are expected to increase by 35% by mid-century.

To address this, substantial efforts are needed to align with the goals established at the COP28 climate conference and to meet regional national targets, which aim to halve current emissions by 2050. Among the ten ASEAN member states, eight have set net zero emissions goals.

The report also highlights the positive impacts of accelerating clean energy transitions in Southeast Asia, noting the creation of over 85,000 jobs since 2019 and the potential for further growth in clean energy technology manufacturing and critical minerals processing. Indonesia is emerging as a key producer of lithium-ion batteries, thanks to its abundant nickel reserves, while Viet Nam, Thailand, and Malaysia rank as top solar PV manufacturers after China.
“Southeast Asia is one of the most economically dynamic regions of the world and is set to account for a quarter of the growth in global energy demand over the next decade as its population, prosperity and industries expand,” said IEA Executive Director Fatih Birol. “Countries in the region have a diverse mix of energy sources including highly competitive renewables. But clean energy technologies are not expanding quickly enough and the continued heavy reliance on fossil fuel imports is leaving countries highly exposed to future risks. Southeast Asia has made great progress on issues such as energy access, clean cooking and developing clean energy manufacturing, but now it must ramp up efforts to deploy those technologies at home. Access to finance and investment for the region’s fast-growing economies will play a pivotal role in strengthening their energy security and delivering on their emissions reduction goals.”