As competition heats up in the renewable energy sector, China, Japan, and South Korea are intensifying measures to strengthen their influence in Southeast Asia’s green transition.

China emerged as the largest financier of clean energy investments in the region between 2013 and 2023, channeling up to US$2.7 billion into renewable energy projects across five key Southeast Asian countries: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

This finding is highlighted in a new report by Zero Carbon Analytics (ZCA), titled “The race to invest in Southeast Asia's green economy”. The report analyzes the flow of clean energy investments and the strategic policy engagement of China, Japan, South Korea, and Australia in shaping Southeast Asia’s green transition.

“While China still dominates investment and clean technology trade, South Korea has carved out a niche in battery component exports, and Japan leads in solar energy investments. These countries have promising opportunities to expand their clean energy footprint in the region,” Yu Sun Chin, a researcher at ZCA, said as quoted in a statement on Tuesday, May 20, 2025.

Japan plays a leading role in energy transition financing frameworks in the region, notably through its co-leadership of the US$20 billion Just Energy Transition Partnership (JETP) in Indonesia and its support for Vietnam’s JETP. In 2021, Japan was also committed of US$25 million through the Energy Transition Mechanism (ETM) to accelerate coal plant retirements in Indonesia, the Philippines, and Vietnam.

Japan is also the largest investor in solar and geothermal energy in the five countries, with investments totaling US$1.3 billion in 2013 and US$142 million in 2023. Additionally, it is the top supplier of electric buses and vehicles in the Philippines.

Meanwhile, South Korea is the leading exporter of battery components to Malaysia (US$143.37 million) and Indonesia (US$52.99 million), and ranks second behind China in electric vehicle battery exports to Indonesia.

Australia, on the other hand, is investing in regional electricity transmission projects, such as the Australia-Asia Power Link, which aims to export solar energy to Singapore via Indonesia.

ZCA notes that Southeast Asia’s rapid economic growth and geopolitical importance make it a highly attractive region for investors. China, for instance, has identified electric vehicles, lithium-ion batteries, and solar technologies as new pillars of growth, viewing clean energy as a strategic economic driver.

As renewable energy becomes the cheapest source of electricity in much of Southeast Asia, investment-receiving countries are well-positioned to accelerate their energy transition. By expanding regional demand and green markets, ASEAN nations can ensure energy security and support their fast-paced economic development − while also signaling to investors that the region is ready to absorb the US$180 billion needed to reach ASEAN’s renewable energy goals.

“Renewables are rapidly becoming the lowest-cost source of electricity across Southeast Asia,” Amy Kong, another ZCA researcher, said. “This presents a key opportunity for ASEAN to secure affordable energy, drive economic growth, and deepen regional cooperation in the face of global geopolitical tensions.”

The report was released ahead of the 46th ASEAN Summit in Malaysia, where regional cooperation on clean industry resilience is expected to be a key topic − particularly in light of recent U.S. tariffs on clean energy products.