In a strategic push to reshape the energy landscape of Southeast Asia, Japan, South Korea, and Australia are ramping up investments in clean energy, challenging China’s longstanding dominance in the region.
While China has led the way in renewable energy funding across Southeast Asia, new research by Zero Carbon Analytics highlights growing competition. Countries including Indonesia, Malaysia, the Philippines, Thailand and Vietnam are attracting a wider range of international partners in their drive towards a greener future [1].
Clean Energy Race Illustration by Gabby Rush.
A Region on the Move
Southeast Asia’s clean energy transition is accelerating, fuelled by economic growth and increasing climate commitments. Investment in renewable energy across the Association of Southeast Asian Nations (ASEAN) has grown by 15% annually since 2020, drawing in diverse players from the Indo-Pacific.
- China remains the largest public investor, funnelling over £2.1 billion into the region’s five key markets from 2013 to 2023.
- Japan leads in geothermal energy with £1 billion invested, and also tops solar investment at £111 million.
- China dominates wind (£998 million) and hydropower (£858 million), followed by Japan (£500 million) and South Korea (£401 million) in hydro.
- In clean energy trade, China maintains its lead with £3.35 billion, primarily in EV batteries, solar panels and wind components [2].
A Diversified Approach
Rather than duplicating China’s approach, Japan, South Korea, and Australia are each carving out distinct roles:
- South Korea is the leading exporter of battery components to Indonesia and Malaysia.
- Japan supplies the most electric vehicles and buses to the Philippines.
- Australia is strengthening partnerships, particularly around critical minerals and renewable infrastructure [2].
Though China’s Belt and Road Initiative (BRI) remains the most prominent climate-focused platform in the region, alternative collaborations are gaining momentum.
“Although China dominates overall clean tech investment and trade, South Korea has carved out a niche in battery component exports and Japan in solar investments,” said Yu Sun Chin, a research associate at Zero Carbon Analytics. “Promising opportunities remain for these nations to expand their clean energy investments across Southeast Asia.” [1].
Strategic Drivers Behind the Shift
The increasing involvement of regional powers is being driven by a mix of economic opportunity, diplomatic engagement, and the strategic value of critical minerals. As these countries deepen ties with ASEAN nations through clean energy partnerships, they also gain geopolitical influence and secure long-term supply chains.
With abundant renewable resources, growing demand, and strong policy signals, Southeast Asia has become a key battleground for clean energy leadership. As the competition intensifies, the region stands to benefit from a more diverse and dynamic investment landscape—bringing it one step closer to a sustainable future.
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References
[1] Sustainability News – Clean Energy in Southeast Asia. Accessed on 29/05/25. Available at: https://sustainability-news.net/industries/energy/japan-south-korea-and-australia-step-up-clean-energy-push-in-southeast-asia/
[2] Zero Carbon Analytics: The Race to Invest in Southeast Asa’s Green Economy. Accessed on 29/05/25. Available at: https://zerocarbon-analytics.org/archives/economics/the-race-to-invest-in-southeast-asias-green-economy
