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

Clusters as catalysts of ASEAN’s energy transition and industrial transformation2 Industry accounts for around 47% of South-East Asia’s total final energy consumption, with industrial energy demand expected to rise by 65% by 2050 from 2023 under the International Energy Agency’s (IEA) Stated Policies Scenario.24 Industrial clusters are key levers to advance both ASEAN’s industrial transformation and overall energy transition. Globally, electricity is increasingly driving industrial energy growth,25 signalling a structural shift from fossil-intensive production to power-based industrial systems. This forms a strong link between ASEAN’s energy transition and industrial transformation. To understand the role clusters will have to play, it’s crucial to understand these transformations at regional and national levels, and the unique challenges they face. The region’s progress in energy transition and industrial transformation is deeply rooted in a network of collaborative frameworks that align policy, infrastructure and energy transition priorities to enable a low-carbon, resilient future. The ASEAN organization, comprising 11 member states operating under the principles of consensus collectively known as the “ASEAN Way”, lies at the heart of these efforts. Figure 1 illustrates a number of key enablers driving ASEAN’s initiatives on regional integration, industrial transformation, climate action and inclusive energy transition.Building on its broader vision of regional integration, ASEAN’s Economic Pillar places the energy transition at the centre of its agenda. This effort is guided by APAEC, the region’s principal blueprint for energy collaboration. Figure 2 illustrates ASEAN’s energy transition priority areas and the institutional mechanisms that deliver them.2.1 ASEAN – the region’s energy transition and industrial transformation enabler65% energy demand rise expected by 2050 from 2023.Examining the factors shaping ASEAN’s energy transition highlights what influences progress and enables cluster development. ASEAN’s Economic Pillar places the energy transition at the centre of its agenda. This effort is guided by APAEC, the region’s principal blueprint for energy collaboration. 7 Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration7