There is a clear need now for ASEAN to address its over-reliance on fossil fuels, particularly coal, for its energy needs, the EU-ASEAN Business Council has said.

In a recent report on Powering ASEAN’s Energy Transition, it calls on ASEAN governments to accelerate energy transition as a means of helping the region deal with climate change challenges and ensure the greening of supply chains while meeting rising energy demands.

The EU-ABC, which represents the interests of European businesses in Southeast Asia, has said in the report that ASEAN’s energy demands continue to increase but it remains heavily dependent on highly polluting fossil fuels, with around 80 per cent of its current energy mix coming from such sources.

Donald Kanak, chairman of the EU-ABC and chairman of Prudential Insurance Growth Markets, said: “This month the IPCC [Intergovernmental Panel on Climate Change] released its sixth assessment report dubbed code red for humanity because of the urgent and decisive action needed to decarbonise to avoid climate catastrophe.

“The EU-ABC believes that progress requires a mix of policies, finance and technology, with special assistance for developing countries. That means coming up with new practical, scalable solutions that can accelerate the energy transition, phasing out fossil fuel subsidies, and providing a just transition for affected workers and communities.”

One such solution that could potentially support ASEAN is an energy transition mechanism (ETM), a way to combine public and private finances to accelerate retirement of coal-fired power plants and significantly increase investment in renewables.

“The EU-ABC, with its members and other key stakeholders are supportive of the work being led by the Asian Development Bank to explore the feasibility of the ETM in several countries in ASEAN.”

Chris Humphrey, executive director of the EU- ABC said: “Tackling climate change in a just and affordable way should be the absolute number one priority for all of us.

“And driving energy transition forward should be at the top of the agenda for all governments in the region. As ASEAN continues to develop economically demand for power will increase, but we need to make sure that that increased demand is being met from less polluting sources, and that producers and manufacturers can continue to grow but do so using greener sources for their power needs.

“This will require shifts in policy thinking to adopt policies and processes that promote the transition away from high carbon-emitting solutions to lower carbon ones, and ultimately renewable energy solutions.”

Among other things the EU-ABC calls for is the development of a region-wide green finance taxonomy and enhanced de-risking instruments to aid the development of sustainable finance mechanisms in the region which could be used to help finance energy transition solutions.

It also calls for the phasing out of fossil fuel subsidies across the region with those monies being redirected to support energy transition. — VNS