Southeast Asia is facing a dilemma. The region knows it must phase out fossil fuels, but the roadmap to embark on it is full of trade-offs. A rushed and poorly managed phase-out could lead to rising energy prices and job losses. Moving too slowly risks increased climate change impacts and potential economic disadvantages in a world that is moving ahead.

At the same time, global geopolitics is shifting. The return of President Trump, ongoing U.S.–China tensions, and a fragmented global market are making it harder to cooperate, plan, and invest. These are some forces that the region could not control, but the impact will be felt directly, especially since the supply chains of critical minerals and technologies for clean energy becomes a geopolitical battleground.

These risks have already played out. This year, the U.S. imposed tariffs of up to 3,521% on solar panel imports from Southeast Asia, due to concerns over Chinese subsidies and unfair pricing. Battery investments in the region are also suspended. A South Korean consortium, led by LG, canceled a US$7.7 billion EV battery project in Indonesia, after the consortium viewed Indonesia as a no longer viable investment destination. In this climate, energy security is no longer just about generation capacity, but it’s about technological access, trade resilience, and strategic positioning.

There’s also a workforce challenge. Hundreds of thousands of people in the region are still working in fossil fuel-related jobs. According to a 2023’s report by Agora Energiewende, ICSC, and IESR, coal industries employ nearly a million people in Indonesia, Viet Nam, and the Philippines. While transition to renewable energy can absorb some of that labor and even open new job opportunities, the transition planning is lagging. Training programs are developed, and curriculums are being updated, but not yet at the pace and scale required. Without faster action, the energy transition could become a political flashpoint.

And then there is the region itself. As the association of countries in the region, ASEAN sees renewable energy as a critical driver of regional resilience, growth, and integration. This goal is expressed in the ASEAN Plan of Action for Energy Cooperation (APAEC), ASEAN Vision 2045, and the upcoming ASEAN Economic Community Strategic Plan 2026–2030. However, progress remains slow. Countries in the region still heavily rely on fossil fuels. The issue is not lack of vision but a lack of alignment among member states. Strengthening regional cooperation and developing a more integrated policy framework will determine whether Southeast Asia can move fast enough – together.

So, what needs to happen?

First, there must be an alignment between ASEAN’s commitments with national energy policies. ASEAN member countries must make sure that their renewable targets, green investments, and grid development road maps are designed to complement, not contradict, ASEAN’s goals for energy security and market integration. Policy misalignments, such as ongoing fossil fuel subsidies, can create friction that stalls cross-border collaboration.

Second, big investment in grid modernization and energy storage infrastructure is needed. Gaps in inter-island and cross-border transmission, outdated grid systems, and a lack of large-scale storage infrastructures are major bottlenecks. Without addressing these issues, increasing renewables installation in the region will remain a challenge. Governments must prioritize smart grid development, put investments in energy storage as high priority, and accelerate projects like the ASEAN Power Grid to ensure that clean energy can flow reliably and affordably across the region.

Third, ensuring a just energy transition in the region. Government needs to make sure that people in the coal-dependent regions are not left behind by providing them with means to re-train their skills. During the planning and decision-making process, government must also engage local communities. Additionally, green jobs must be made accessible at all levels, not just to engineers, but to technicians, drivers, farmers, and former miners. If the energy transition fails to deliver the benefit it promises, particularly to those most affected, there is a risk of social and political resistance.

Lastly, Southeast Asia must make sure its energy transition is resilience. The geopolitical and economic landscape will continue to shift. Supply chain disruptions are unavoidable. Therefore, ASEAN countries must ready and start to invest in distributed renewable energy resources, diversify supply chains, expand regional cooperation in clean technology manufacturing, and develop policy frameworks that can adapt to changing circumstances.

ASEAN’s success or failure in energy transition will shape global clean energy supply chains, economic competitiveness, and regional security dynamics. The tightrope is real, and the region has little time left to find its balance. ASEAN must move from vision to action – together, or not at all.

The Regional Energy Transition Dialogue (RETD) 2025, organised by CASE, was a high-level event designed to foster trust-building, shared learning, and real collaboration across Southeast Asia. It brought together delegates from Indonesia, the Philippines, Thailand, and Viet Nam to exchange policy experience, explore shared challenges, and identify strategic opportunities to strengthen energy security, enhance regional cooperation, and build domestic resilience in the energy sector.

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