Southeast Asia Shines as Chinese Clean-Energy Firms’ Traditional Markets Dim

Chinese clean-energy companies are encouraged to turn their attention to Southeast Asia for business opportunities, particularly in response to dwindling prospects in Europe due to stringent regulations. This sentiment was a focal point at the 2024 ESG and Sustainable Business Ecosystem Conference held in Beijing, where participants also examined the role of AI in advancing China's carbon goals [para. 1][para. 2]. According to Zheng Wendan from the advisory firm Alliance For Good, Southeast Asia boasts favorable demographics, ample natural resources, and potential in the electric-vehicle (EV) market, primarily comprised of motorcycles and bikes, indicating room for growth in the electric car segment [para. 3][para. 5]. Key countries such as Indonesia, Vietnam, and the Philippines play vital roles in the global battery supply chain with significant reserves of nickel and cobalt, essential for battery production [para. 4].

Cheng Zhendong of Gobi Partners highlighted that Chinese companies might find a more receptive environment in Asia compared to Europe or the U.S., citing Malaysia as an example where a significant Chinese community and government incentives to adopt ESG and advanced manufacturing technologies create favorable conditions [para. 6][para. 7]. The challenges in Europe arise from the European Union's stringent sustainability regulations, including carbon tariffs and the Batteries Regulation law, which make it difficult for Chinese companies to comply [para. 8]. These measures affect a broad range of industries, compelling Chinese firms to navigate a demanding regulatory landscape [para. 9][para. 10].

Despite the potential benefits, Southeast Asia poses challenges, too. Its geographic complexity makes establishing EV charging infrastructure difficult. Additionally, the adoption of solar energy is slow due to weak power grids, high storage costs, and policies in some countries that favor fossil fuels [para. 11].

AI has a considerable part to play in reducing carbon emissions, potentially more so than carbon trading markets. As cited by Zhu Xufeng from Tsinghua University, AI could help achieve up to 10% of the necessary carbon dioxide emissions reductions by 2030. He emphasized China's leadership in AI applications, advocating its utilization to meet emission peak targets by 2030 and carbon neutrality by 2060. AI could be deployed in various ways, such as providing technical solutions for carbon scenarios, reducing costs of carbon capture and storage, and assessing policy effects [para. 12][para. 13].

However, the energy-intensive nature of AI poses its own challenges; data centers consume substantial amounts of energy and contribute to electronic waste. Ji Weimin foresees that by 2027, many AI data centers may struggle with operational difficulties due to inadequate power supply. Chang Lin echoed these concerns, noting that while AI can aid carbon reduction, its large models pose new challenges [para. 14][para. 15][para. 16].

This summary reflects the viewpoints and discussions from industry experts and stakeholders at the conference, highlighting both the opportunities and obstacles for Chinese clean-energy companies in Southeast Asia and the potential of AI in carbon management.