Room for Italy and the EU in ASEAN's green revolution

Southeast Asian countries must and will accelerate on the green transition. A great opportunity to be seized also by Italian companies

Editorial by Valerio Bordonaro

Southeast Asian countries must accelerate the energy transition and stay true to climate change mitigation goals. According to a report by the International Renewable Energy Agency (IRENA), an average annual investment of $210 billion is needed to be invested in the renewable energy, energy efficiency and related infrastructure sectors by 2050 to limit a global temperature increase to 1.5 degrees C. Such an investment would be more than two and a half times the amount currently planned by the governments of ASEAN countries. The Southeast Asian region is home to 25% of the world's geothermal generating capacity, but the region also has significant coal reserves. Indonesia, for example, has enacted a new clean energy regulation. It is one of the world's largest exporters of coal, which currently supplies about 60 percent of the country's electricity needs. The recent measure is designed to diversify the energy mix and increase the share of renewable energy to 23% by 2025. So far it stands at about 12%. The regulation also stipulates that no new coal-fired power plants will be built, although those already in operation may continue to remain in operation. Emissions from these power plants, however, will have to be contained. The government has also established a new pricing system for clean energy sources to encourage investment. To increase investment, the government will also provide tax incentives, including financing. According to the report, if Southeast Asian countries really want to contribute to the fight against climate change, collective and concerted action is needed; recent steps in this direction appear concrete. According to IRENA, the region aims to derive 23% of its primary energy from renewable sources by 2025. And investment is on the rise, with ample room for cooperation even for international governments and businesses, starting with Europe and Italy.