Asia’s Green Transition Needs More Investment, Policy Support, Industry Leaders Say

Limited funding, insufficient government support, and shortcomings in carbon accounting are major obstacles hampering Asia’s climate efforts, according to industry leaders and experts at the Asia New Vision Forum 2025. The region is pivotal in the global fight against climate change as it includes the world’s largest carbon emitters, rapidly expanding economies, and highly vulnerable populations. However, progress on emissions reduction remains uneven amid mounting pressure from regulators and investors [para. 1][para. 2].

Dominic Barton, chair of Rio Tinto PLC and LeapFrog Investments, described the state of investment in Asia’s energy transition as inconsistent, sharing that in 2024 Southeast Asia represented about 5% of global energy demand and 9% of the population, but only received 2% of global clean energy investment. In contrast, China accounted for 27% of energy demand and 18% of the population but drew 33% of clean-energy spending, including the installation of 277 gigawatts of solar capacity in 2024—over half the global total [para. 3][para. 4].

This disparity underscores a significant challenge. Southeast Asian countries reportedly face a $50 billion annual investment gap to implement essential green initiatives. A Standard Chartered Bank report outlined three major solutions: building a sustainable bioeconomy, developing an advanced power grid, and expanding the electric vehicle ecosystem. The report estimates that these steps could halve the 2030 emissions gap for the region, create 900,000 jobs, and contribute $120 billion to the GDP annually by 2030 [para. 5][para. 6].

Nevertheless, financial and regulatory obstacles persist. Martin Yip of Standard Chartered emphasized that private investment alone cannot address the funding needs, urging for government-led regulatory frameworks to channel capital effectively. Julien Mialaret of Eurazeo SE argued that minor regulatory reforms could make a significant difference, as many Southeast Asian enterprises currently lack the resources to expand green technologies [para. 7][para. 8].

China, despite leading in investment, faces its own hurdles. Ma Jun of the Institute of Public and Environmental Affairs stated that China generates over 30% of global carbon emissions, with emissions from key sectors still rising. A major challenge is the mismatch between where renewable resources are—mostly the sparsely populated west—and energy demand centers in the industrialized east. Addressing this requires heavy investment in ultra-high-voltage transmission infrastructure [para. 9][para. 10].

Additionally, Chen Lihao from the Jiusan Society highlighted the need to update China’s carbon accounting methods. Currently, China uses a two-year annual average for electricity’s carbon intensity, which fails to capture daily fluctuations and the impact of expanded solar usage. He advocates for an “hourly-updated dynamic carbon factor” to improve emissions reduction and absorb surplus solar generation [para. 11][para. 12][para. 13].

The imminent enforcement of the EU’s Carbon Border Adjustment Mechanism, set for 2026, increases urgency. This policy will require non-EU exporters of carbon-intensive goods to pay a carbon fee. Chen believes the dynamic carbon factor could help offset these tariffs and is working with agencies to secure EU approval [para. 14][para. 15].

Despite the difficulties, experts see opportunities in renewable energy, mobility, and food and agriculture. Multinational companies are playing a crucial role as the largest purchasers of renewable power in Asia, helping to stabilize markets and spur grid expansion through long-term agreements. Barton asserted that sustainability is integral for long-term value creation and, with decisive action, Asia can turn present challenges into future opportunities [para. 16][para. 17][para. 18].