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A new report highlights how wider collaboration between SEA and APAC can take the green economy further, by leveraging on similar concerns, trade relations, investment flows and energy transition synergies.
The sixth edition of the Southeast Asia's Green Economy report by Bain & Company, Standard Chartered, GenZero, Google and Temasek, has revealed that Southeast Asia (SEA) and the wider APAC region may see an acceleration in the green economy.
The report explores a wider collaboration between SEA and the APAC markets to grow the green economy to its full potential by leveraging on shared connections between the two regions. This comprises:
- Common energy security concerns
- Strong trade relations
- High foreign investment flows
- Energy transition synergies
According to the report, a systems-based approach can accelerate SEA's green economy as the region seeks to balance growth, security and climate impact. Some of the direct and indirect benefits that collaboration between the SEA and wider APAC regions include:
- Sustainable bioeconomy
- Next-gen grid development
- Electric vehicle (EV) ecosystem
Sustainable bioeconomy
The bioeconomy is a critical part of the SEA-6 economy, contributing approximately 25-30% of jobs across key markets, in commodities such as palm oil, rubber and rice. However, current bioeconomy practices fuel emissions and deforestation, contributing about 30% of total emissions in SEA-6 and ongoing forest loss.
Key systemic barriers such as smallholder farmer dominance, weak infrastructure and supply chain, unclear land rights and regulatory complexities and nascent carbon pricing and carbon markets prevent the region's bioeconomy from reaching its full economic potential.
Enhancing value from agriculture & land (agriculture productivity, nature-based solutions), value from waste (2G biofuels) and implementing systems-wide reforms (land rights, supply chain) have potential to unlock vast value, while regional APAC collaboration can accelerate bioeconomy growth via offtake agreements, investments and agricultural innovation and technology sharing.
Next-gen grid development
At the same time, SEA's domestic grid requires expansion and modernisation to keep up with the integration of renewables, battery storage systems distributed energy resources, and microgrids. It also requires cross-border connection expansion to accelerate the decarbonisation of the grid.
Governments play a crucial role in accelerating grid development through regulatory reforms, which can enable greater private investment, cross-border power trading, and potential subsidisation of key infrastructure.
To this end, Green Industrial Clusters offer a high-impact, near-term solution to attract private investment in renewable generation, transmission and distribution infrastructure and other green energy solutions. If done right, the net present cost for decarbonising grids in SEA could decline 11 per cent by 2050 with regional cooperation.
EV ecosystem
Road transport is a major and growing source of SEA emissions due to rising mobility demand in the region. SEA's electric vehicle (EV) penetration is still low, with 80% of its auto manufacturing geared towards traditional internal combustion engine vehicles.
As the world moves towards greater EV adoption, SEA could be at economic risk if it does not catch up. The region needs a dual strategy to scale EV demand and local production, to retain its manufacturing edge and drive decarbonisation in the most cost-effective way.
Green corridors could fast-track the electrification of commercial fleets, while regional APAC collaboration could unlock shared value through joint investments, and integrated supply chains across battery, EV manufacturing, and charging, leveraging the raw materials supply chain present in SEA.
The report also highlighted three essential enabling solutions required to augment the impact of the systems-level solutions:
- Climate and transition finance
- Despite growth, SEA faces a funding gap of over US$50bn.
- Blended finance is emerging but limited by small deal sizes, regulatory hurdles, and investor mismatch.
- Success depends on favourable policies, talent development, public-private partnerships, and scalable, standardised financing models (e.g. offtake-based financing, infrastructure funds).
- Governments must standardise taxonomies and expand co-financing; commercial investors need to scale up.
- Carbon markets
- Serve as a mechanism to monetise emissions reductions and incentivise low-carbon practices.
- Still nascent in SEA, requiring clearer regulations, robust monitoring frameworks, and integration with global standards to unlock value.
- Green AI
- Positioned as a transformative enabler to optimise resource use, enhance climate modelling, and improve efficiency across sectors.
- Unlocks new potential when combined with data-sharing ecosystems and cross-sector collaboration.
Speaking at the inaugural GenZero Climate Summit 2025 Insights on 5 May 2025, Singapore's Manpower Minister Dr Tan See Leng for a collective action to overcome the current challenges faced in carbon markets, as Singapore is not leaving things to chance.
He noted five initiatives that the nation will contribute to meet the three areas of common standards, project financing and capacity building.
- Voluntary guidance on the use of carbon credits.
- Collaboration with Singapore Cooperation Enterprise on Article 6 capacity building.
- Partnership with Temasek Trust’s philanthropy advisory and professional management arm, TT Foundation Advisors, to unlock capital for Article 6 carbon projects.
- A new Professional Certificate in Carbon Services and Trading by National University of Singapore.
- The first national Carbon Services and Trading Skills Framework.
READ MORE: Talent, digital transformation, and business resilience among key priorities for APAC leaders today
Lead image / Dr Tan See Leng's Facebook
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