Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026

COUNTRY SPOTLIGHT Indonesia Indonesia, the world’s largest archipelago, has one of the world’s largest nickel reserves27 and biodiesel production,28 and aims to be a global EV battery hub29 and a leading exporter of coal.30 Coal contributes to over 65% of its electricity generation,31 although it holds around 40% of global geothermal reserves,32 which contribute only about 3% of installed capacity. In 2023, the share of renewable energy in the electricity mix was around 13%, well below the 2023 target of 17.9%.33 To accelerate the energy transition, Indonesia is implementing the Just Energy Transition Partnership,34 revising its Electricity Supply Business Plan (RUPTL),35 reforming power purchase agreements, de-risking clean- energy investments, advancing a national “super grid”36 and developing green industrial parks in Kalimantan and Sulawesi. COUNTRY SPOTLIGHT Viet Nam Viet Nam is emerging as a global manufacturing powerhouse37 with ambitions to become a global semiconductor hub38 and a regional leader in solar energy adoption. It’s harnessing its transition to drive growth and export competitiveness. It aims for 80–85% power supply by renewable energy by 2050 and under the Power Development Plan 8 (PDP8) – harnessing its significant offshore wind potential39 – while targeting coal plant decommissioning and expanded LNG imports to support grid stability.40 Renewable energy growth, however, has outpaced grid and storage capacity, leading to congestion and curtailment, while regulatory and investment bottlenecks have slowed further deployment. To address these, Viet Nam set out plans for grid modernization and advancing its Smart Grid Roadmap.41 Clean coal pilots, carbon capture, utilization and storage (CCUS) and green hydrogen initiatives, and plans to resume nuclear development at Ninh Thuan by 2030–203542 complement this. COUNTRY SPOTLIGHT Malaysia Malaysia is one of the leading digital hubs and energy producers in Asia, handling 13% of global semiconductor assembly.43 Its oil and gas dominance is anchored by one of the world’s largest LNG complexes in Bintulu,44 with natural gas contributing around 35% of electricity and renewable energy contributing below the 31% target for 2025 and 40% target for 2040.45 The country faces challenges in balancing energy security with the need to scale investment in cleaner alternatives. To advance the transition, Malaysia is modernizing the grid with smart technologies, positioning Bintulu as a low-carbon industrial cluster,46 introducing guidelines for sustainable data centre development47 and advancing cross-border clean energy trade in the Johor–Singapore Special Economic Zone (JS-SEZ).48 It is also pioneering carbon capture and storage (CCS) through initiatives such as the Kasawari offshore project49 and launching hydrogen pilots in Sarawak and Peninsular Malaysia.50 COUNTRY SPOTLIGHT Thailand Thailand, as South-East Asia’s largest automotive manufacturing base, is also seeking to develop itself as the region’s EV hub.51 This sits alongside a well- developed petrochemical sector anchored in the Map Ta Phut complex,52 forming a carbon-intensive industrial base. With over 60% reliance on natural gas for electricity,53 Thailand faces declining domestic natural gas production and reduced imports from Myanmar.54 Under the draft PDP , the country aims to have 51% share of renewable energy by 203755 and achieve net zero by 2050.56 It is also expanding bioenergy projects57 and cross-border hydropower imports from Laos,58 investing in grid modernization through its Smart Grid Master Plan59 and developing the Smart Park Industrial Estate to drive sustainable industrial growth.60 COUNTRY SPOTLIGHT Philippines The Philippines, an archipelagic nation of over 7,000 islands, ranks among the world’s largest hubs for information technology, business process management61 and nickel production,62 and among the most attractive emerging markets for energy transition investment.63 The government targets 35% renewables by 2030 and 50% by 2040.64 Fossil fuels still supply about 75% of electricity generation, however, driving high electricity prices65 amid coal import reliance and declines in domestic natural gas. In response, the country is increasing the share of renewable energy, awarding 1,392 renewable energy contracts under the Green Energy Auction Program66 while scaling LNG infrastructure and taking early steps in hydrogen, nuclear and CCUS. Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration 11