1、1SOUTHEAST ASIAS GREEN ECONOMY 2024MOVING THE NEEDLE2The information in this report is provided on an“as-is”basis.This document was producedby Bain&Company,GenZero,Standard Chartered,and Temasek(“the authors”)as of the date of writing and is subject to change.This document has been prepared solely f

2、or informational purposes over a limited time period and for providing a perspective on the market.Projected market and financial information,analyses,and conclusions contained herein should not be construed as definitive forecasts or guarantees of future performance or results.The authors or any of

3、 their affiliates and any third party involved make no representation or warranty,either expressed or implied,as to the accuracy or completeness of the information in this report and shall not be liable for any loss arising from the use hereof.Inclusion of companies featured in this report does not

4、indicate endorsement in any shape or form from the authors of this report.Copyright in the materials,text,articles,and information created by third parties and the rights under copyright of such parties referenced in this report are hereby acknowledged.Copyright in all other materials not belonging

5、to third parties and in these materials as a compilation vests and shall remain,at all times,as the copyright of the authors of this report,and should not be reproduced or used except for business purposes on behalf of the authors or with the express prior written consent of an authorized signatory

6、of the authors.ReferenceThe information included in this report should be sourced as“Bain&Company,GenZero,Standard Chartered,and Temasek Southeast Asias Green Economy 2024 Report:Moving the needle.”Disclaimer&Reference3Authors&AcknowledgmentsWe would like to thank the team who has worked tirelessly

7、to develop this report:GenZeroHui Qing Soh,Chief of StaffChloe Lim,Assistant Vice PresidentStandard CharteredEvonne Lee,Co-Head,CIB Marketing,Asia and Sponsorships,SingaporeChristina Soon,Director,Communications andBusiness Content Gladys Goh,Associate Director,Brand&Marketing Phyllis Goh,Associate

8、Director,CommunicationsTemasek Anh Vu Nguyen,DirectorKeith Lin,DirectorAllan Arthur Leyeza Cabrera,Vice PresidentRemus Tan,Assistant Vice PresidentGladys Tan,Assistant Vice PresidentThe insights and content of this report also benefited from the wisdom of more than 50 leading industry experts across

9、 SEA and beyond.The richness and clarity of thought in this report would not have been possible without the input from these individuals.To all who answered our call or wrote a thoughtful emailwe owe you our deepest thanks.Bain&Company Gerry Mattios,Expert PartnerGwyneth Fries,Senior ManagerJongmin

10、Park,ManagerJinwoo(Mark)Jang,ConsultantBerlinda Lim,Senior Associate ConsultantJaeeun Kil,Associate ConsultantSeunghyun Jang,Associate ConsultantJessy Chua,Director,SEA Market ReputationMichele Koe,Manager,SEA Market ReputationYan Xin Tay,Manager,SEA Market ReputationAcknowledgmentsThe“Southeast Asi

11、as(SEA)Green Economy 2024 Report:Moving the needle”is jointly produced by a collaboration between Bain&Company,GenZero,Standard Chartered,and Temasek.Contributing authors are as follows:AuthorsDale HardcastleGlobal Sustainability Innovation Center Director and Partner,Bain&CompanyYukiko TsukamotoPar

12、tner,Bain&CompanyBerakah Hyunbin LeeSenior Manager,Bain&CompanyKyung-Ah ParkHead,ESG Investment Management&Managing Director,Sustainability,TemasekKimberly Tan Head of Investments,GenZeroTracy Wong HarrisHead of Sustainable Finance Asia,Standard CharteredJustin MaExecutive Director,Standard Chartere

13、d4PageIntroduction5State of Play20Investable Ideas46Accelerators70Policies and Incentives75Innovative Finance Mechanisms91Scaling Corporate Investment108Cluster/Pilot Development115Regional Collaboration120Conclusion126Country Insights133Indonesia134Malaysia139Philippines144Singapore149Thailand154Vi

14、etnam159TABLE OF CONTENTS5Introduction6Foreword byBain&CompanyThe past 12 months have reinforced the need for concerted global action on climate change,and specifically for greater urgency and commitment from governments across the world.This has been equally true across Southeast Asia where,encoura

15、gingly,there has been a steady uptick in commitments from all stakeholders.Four countries in ASEAN have raised climate commitments,and seven are now considering carbon pricing measures to promote action.There has been a four-fold increase in corporate commitments to set science-based targets,and man

16、y leaders have outlined ambitious multi-billion-dollar investment programs to decarbonize their businesses.Yet in climate action,as in business and life,the real test of a strategy is not the targets we set,but the concrete steps we take to accelerate progress and deliver the impact we have committe

17、d to.The green transition in SEA is at a tricky juncture where bold ambition is meeting the realities of the day.Southeast Asia governments are grappling with the challenges of rising energy demand(that will grow by nearly 42%over the decade to 2030),a burgeoning middle class,strong pressure not to

18、increase energy and electricity prices,and the need to deliver just and equitable growthbefore even considering ambitious plans to decarbonize and build the industries of tomorrow.Corporates and investors are keen to play their part.Yet uncertainties about the transition path and supporting regulati

19、on and policies(central to any translation of climate commitments to reality)make it difficult to take decisive action at scale and invest the billions of dollars that are needed to ensure a speedy and effective transition.To break this logjam,the largest corporates and investors,including the multi

20、lateral financial institutions,need to act with urgency and conviction to lead the way.Despite the uncertainties,there is much that can be done in the“here and now.”There are several actions that are“no regrets”moves and tap proven levers for decarbonization across various industries.Similarly,there

21、 are policies that governments can implement to address nature loss and protect carbon sinks that dont require difficult trade-offs.This years Green Economy report speaks to both the challenges on the road to net zero and the immediate actions we can take today to accelerate the transition.While the

22、 challenges are considerable,there is much room for optimism,as at least the first wave of available levers can meet much of the regions decarbonization commitments to 2030 if executed with collective commitment and collaboration.In parallel,a focus on defining longer-term solutions that governments

23、,corporations,and investors align on will deliver just and sustainable growth in this dynamic region.We invite all stakeholders to work together to reaffirm their commitment to the green transition and take action today.Satish ShankarRegional Managing Partner,Asia-Pacific,Bain&Company7Foreword byGen

24、ZeroKimberly TanManaging Director and Head ofInvestment Group,GenZeroAs a decarbonization-focused investor located in Singapore,GenZero is deeply committed to deploying capital to bridge the gap between Southeast Asias Net Zero ambitions and concrete achievement.We believe that an acceleration of ef

25、fort by countries,corporates and investors is imperative as Southeast Asia remains woefully off-track despite significant progress in 2023.Emissions increased by 13%or 400 MtCO2e in 2023 and will continue to increase as primary energy consumption increases alongside GDP growth.Renewable energy inves

26、tment in Southeast Asia increased by 9%in 2023.However,renewable energy constitutes less than 10%of electricity generation in the region.Total green investment increased by 20%from$5.2 billion to$6.3 billion in 2023 but remains far short of the$1.5 trillion needed to fund the Southeast Asias transit

27、ion by 2030.It is therefore critical that all stakeholders act collectively and decisively to drive the system-level change required to accelerate and scale decarbonization across Southeast Asia.We remain optimistic about the region as a destination for green investment given the ample headroom for

28、increased deployment of commercially ready and cost-effective technologies from low penetration levels today.We believe this could unlock incremental annual revenues of$300 billion by 2030 and present a meaningful opportunity to invest into companies with fit-for-purpose technologies and business mo

29、dels which could become the new market leaders in the green economy.However,capital flows have been hampered by the overall lower bankability of Southeast Asian projects,greater offtake risk and lack of political commitment to long-term policies which hinder investor willingness to take long-term be

30、ts.We believe that governments must develop more coherent policies and frameworks and more targeted incentives to allow Southeast Asia to compete globally for finite investment dollars amidst robust industrial policy by other markets.GenZero is a double bottom-line investor.The success of our invest

31、ments is not measured solely in terms of financial returns but also in terms of the positive climate impact we generate.It is with this mindset that we invested into Rize.Farm alongside Temasek,Breakthrough Energy Ventures and Wavemaker Impact.Rize.Farm is a technology-enabled platform that reduces

32、methane emissions in rice cultivation by providing the right economic incentives across the value-chain,from input financing to market aggregation,to drive the adoption of sustainable cultivation techniques by smallholder rice farmers.We believe that Rize.Farms use of finance and technology to scale

33、 the dissemination and implementation of better agronomic practices will improve the likelihood of smallholder farmers while also reducing greenhouse gas emissions,and is a good example of a business where financial success and positive climate impact are deeply intertwined.To further fuel the shift

34、 towards clean energy and sustainable fuel projects across the region,we signed a Memorandum of Understanding with Keppel Limited at COP28.The partnership aims to explore opportunities to drive the early retirement of coal-fired power plants,and to advance Southeast Asias transition to renewable alt

35、ernatives like solar and geothermal energy.As a financial investor,we are acutely aware that commercial acumen and capital is not enough and must be married with operating capability and know-how to drive real change in Southeast Asias transition.GenZero also recognizes the potential that carbon mar

36、kets have in channeling financing to support the scaling and adoption of sustainable solutions and practices in Southeast Asia.We are heartened by the steady progress made by Southeast Asian countries in establishing national carbon markets and registries,as well as the related policy frameworks and

37、 infrastructure to support trading and investment.We believe this will enable the scale up of nature-based solutions projects in Southeast Asia,and constitute the foundation for the use of carbon credits within blended finance models to create additional revenue streams that can lower the cost of fi

38、nancing the transition.The report goes beyond a description of the current state of play,to offer a proposed path to action and specific initiatives for countries,corporates,and investors.We hope that this catalyzes concrete action that can bend the emissions curve for Southeast Asia to get to Net Z

39、ero by 2050.8Foreword byStandard CharteredPatrick LeeCEO,Singapore and ASEAN,Standard CharteredWhat will it take for a nation to reach net zero?Rather than a singular effort,its increasingly clear that a collective determination to navigate complexity and build shared action towards a green and sust

40、ainable economy is the way forward.This ambition is what brings us together,alongside our partners,to develop this Green Economy report,as we explore what a just transition truly looks like on the road to a net-zero future.The report seeks to offer knowledge and insight to propel us towards sustaina

41、ble goals and shine a light on opportunities and progress across public,private and regional pathways.The report identifies a list of market-ready,high-impact investable ideas that currently hold momentum,of which further uptake can bring clear advantages to the region and build scalable,long-term s

42、olutions for the future.As a region,ASEAN is the fourth largest energy consumer in the world.Energy demand in ASEAN has increased on average by around 3%a year over the past two decades,and this trend is set to continue up until 2030,according to the International Energy Agency.Governments across AS

43、EAN have set out long-term plans for a more secure and sustainable future,with many having already announced net-zero emissions and carbon neutrality targets,which will help propel energy efficiency improvements and the transition to a clean energy economy.But to accelerate progress,we need to move

44、further and faster.This will require bold action,knowledge of the market and stakeholder support from government,philanthropy and the private sector.For Standard Chartered,sustainability is a core part of our strategy,echoed through the Banks commitment to supporting the transition across ASEAN.With

45、 a long-standing presence in parts of the world where sustainable finance can have a significant impact,we facilitate the movement of capital to where it is needed most.We apply our knowledge across our market footprint and the innovative mindset of our teams to create financial solutions that help

46、to address challenges and support sustainable growth.Were committed to mobilizing$300 billion of sustainable finance and continue to make progress towards our goal of achieving net zero in our operations by 2025,and in our financing by 2050.These ambitions aim to catalyse finance to scale impact and

47、 climate solutions where they are most needed.In collaboration with the Singapore governments Green Plan 2030,Standard Chartered has actively contributed to multiple initiatives in the countrys sustainable finance ecosystem,including supporting the development of carbon markets as well as sustainabl

48、e trade and data solutions through initiatives such as Climate Impact X,Transition Credits Coalition(TRACTION)and SGTraDex.Across the rest of the region,we also work with governments in Indonesia and Vietnam on the Just Energy Transition Partnership(JETP)to help deliver on collective ambitions to re

49、ach net zero by 2050.With Singapores growing leadership in green finance,the role the nation plays as a connector for the region is crucial,with great strides to come with the nations plans to become a blended finance hub,which will help to lower the cost of capital for energy-transition projects by

50、 leveraging a mix of grants,concessional loans and commercial capital,to achieve substantive and inclusive outcomes.As the only international bank present in all 10 ASEAN markets,Standard Chartered is well positioned to leverage its network from Singapore as an Asia super-connector,to provide the ne

51、cessary expertise and help catalyse available capital to drive climate action.Transformation will not happen overnight,but if we work together and adopt a different lens to find breakthrough opportunities and solutions,we can accelerate the transition towards a sustainable,thriving future.9Foreword

52、byTemasekKyung-Ah ParkHead,ESG Investment Management&Managing Director,Sustainability,TemasekThe global community has made notable progress on climate action in the past year,with unprecedented collective commitment to transition away from fossil fuels and more than 110 governments pledging at the U

53、nited Nations COP28 climate summit to triple the worlds renewable energy capacity and double energy efficiency by 2030.Yet,the pace and scale of climate action is still wholly insufficient.2023 left its mark as the hottest year on record,with carbon emissions from fossil fuels hitting a new high and

54、 a record 63 number of billion-dollar weather disasters costing over$300 billion in the same year.Southeast Asia has an outsized role to play in the global net zero ambition and decarbonization.Many communities across Southeast Asia today continue to lack access to clean and reliable energy.On the o

55、ther hand,the regions biodiversity and abundance of natural resources as well as strategic importance as an industrial hub allows it to leverage nature-based solutions and new technologies for a once-in-a-generation opportunity to ride the green growth wave.As an investor seeking to deliver sustaina

56、ble returns over the long term,Temasek has stepped up to deploy capital towards companies with pivotal technologies or innovative nature-based solutions that support the regions journey towards net zero.For example,we worked with Breakthrough Energy Ventures,GenZero and Wavemaker Impact last year to

57、 establish Rize.Farm,an agri-tech startup that aims to decarbonise rice cultivationthe regions leading source of methane emissionsstarting with Indonesia and Vietnam as its first two markets.Rize.Farm is building a platform that will identify and implement the most effective strategies to reduce gre

58、enhouse gas emissions in rice cultivation and the right economic incentives to drive the adoption of sustainable cultivation techniques.Southeast Asia faces the dual,often conflicted challenge of addressing the rising need for affordable and reliable energy while simultaneously cutting emissions.Alo

59、ngside the development of green solutions,accelerating the green transition in Southeast Asia will require financing mechanisms for both the managed phaseout of coal and adoption of new technologies in hard-to-abate sectors.A key part of this puzzle is the deployment of accelerators,including enabli

60、ng policies and strong public-private partnerships,that can unlock green investment and transition financing.Temasek is a knowledge partner of the Transition Credits Coalition(TRACTION)launched by the Monetary Authority of Singapore(MAS)to study the early retirement of coal-fired power plants in Asi

61、a through high-integrity transition carbon credits.We also signed a Memorandum of Understanding with Allied Climate Partners,International Finance Corporation and MAS,as part of the Financing Asias Transition Partnership(FAST-P),with the intent to establish a green investments partnership to address

62、 climate finance gaps and increase the bankability of green and sustainable projects in Asia.Pentagreen Capital,our joint venture with HSBC focused on debt financing,has started to catalyse financing for sustainable infrastructure projects in the region.In September 2023,it signed its first transact

63、ion with Citicore Solar Energy Corporation,structuring a$100 million mezzanine construction green loan with an initial$30 million committed for a portfolio of six solar power projects with gross capacity of 490 MW across the island of Luzon in the Philippines.Amidst the challenges the region faces i

64、n its decarbonisation journey,we believe that there are also tremendous opportunities in its green economy that can be seized by leveraging the right levers,tools and partnerships.We hope this report will provide useful insights into the very concrete and investable opportunities in Southeast Asia t

65、hat can drive immediate progress for the regions green economy,as well as the areas where policies,innovative solutions and collaboration can help to unlock these win-win opportunities to accelerate Southeast Asias just and inclusive transition.We invite you to be part of this endeavour to support,c

66、atalyse and grow the regions green economy opportunities,so that every generation prospers.10The 2024 Green Economy Report is the 5th report in this seriesDevelop a collective action plan for SEA to capture economic opportunitiesOpportunities on the road to net zero2021Year of transition and climate

67、 action(Intro)Defining the road to net zeroCatalyzing the journeyUnlocking capital for sustainabilityLeading by doing(Conclusion)Identify investable opportunities to accelerate the net zero transitionInvesting behindthe new realities2022Moving from promises to action(Intro)Where to investThe current

68、 disconnectRecommendationUnderstand SEAs progress vs.climate commitments and how to unlock its potential in energy transition and natureCracking the code2023Progress towards decarbonizationAccelerating the energy transitionValuing nature for impactRecommendation and call for actionIdentify actionabl

69、e and investable business opportunities and acceleratorsMoving the needle2024Progress towards decarbonizationTop decarbonization ideasAccelerators to further unlock the full potentialAssess SEAs green economy potential and strategic pathwaysSEAs Green Economy PotentialDeep Dive:5 SectorsDeep Dive:6

70、CountriesPathway to full potential202011State of PlayIWhere do SEA countries stand in meeting their climate commitment?Are we on track for 2030?Investable IdeasIIWhat decarbonization ideas today offer the greatest impact,deployability and investability?What accelerators can we act onto unlock the po

71、tential of ideas sooner?AcceleratorsIIIThis report answers key questions about Southeast Asias green transition and trajectory Country InsightsIVWhat actions should each country take given different environments,competing priorities,and readiness?1220,50017,500While SEA only accounts for 7%of global

72、 emissions,its emissions are steadily increasing,and are expected to rise rapidly unless steps are taken to reduce its emissions intensityNotes:1)Actual GHG emissions data used until 2020;2)Primary energy consumption and CO2 emissions in 2030 refers to stated policies scenario from IEA;primary energ

73、y consumption in 2022 for Brunei,Cambodia,Laos,and Myanmar was calculated by multiplying YoY between 2021-22 of ASEAN6|Sources:Climate Watch;Our World in Data;IEA;IHS Markit;Bain analysisEmissions of SEA are still rising as primary energy growsSEA needs to bend the emissions curveYearSEA annual gree

74、nhouse gas emissions1(MtCO2e)SEA primary energy consumption2(TWh)SEA CO2 emissions2(Mt)SEA GDP(USD B,Real GDP,Base:2010)SEA primary energy consumption(TWh)Path to 205013SEA faces unique challenges that will need a systems level change to decarbonize and transitionNote:1)Coal plants under 20 years So

75、urces:IMF;Global Energy Monitor;Expert interview;Lit.search;Bain analysis Dual need to balance growth and transitionLegacy fossil fuel dependenceUneven opportunities&limited cooperationOften limited incentives for carbon reductionInadequate access to financingGDP per capita is low at$6K in 2023(vs.$

76、63K in N.America)Growing economies&middle class will need 50%more power demand in 2040About 60%of coal power stations are young1Just transition to ensure access to clean and affordable energy for all stakeholdersEconomy is 35%dependent on energy-intensive sectors Fossil fuels continue to provide aff

77、ordable access to baseload power(75%of power sector dependent on fossil fuels)Grid constraints hinder ability to leverage solar/wind60M employment in energy-intensive industriesMismatch due to geographical dispersion of renewable resource potential vs.demand Lack of cross regional grid connections a

78、nd cooperative mechanismsContinued incentives favoring fossil fuels by most governmentsInvestor pressure across SEA is lackingCurrent policy incentives insufficient Complex,fragmented ecosystem of playersInsufficient returns for investment with higher perceived risks(e.g.,currency fluctuation,regula

79、tory)Majority state-owned grid infrastructure limits private sector participationStructural constraints&challenges hinder the pace of progress14Just Transition|SEA needs to consider all stakeholders as it transitions to a green economyProvide access to affordable and reliable clean energyMinimize jo

80、b displacement and support reskilling and redeploying workers(e.g.,JETP1 could create potential 383K jobs in Indonesia from 2023 to 2030)Ensure inclusive community decision-makingFocus on nature and biodiversity co-benefitsNote:1)Just Energy Transition Partnership Source:Comprehensive Investment and

81、 Policy Plan 2023,Lit.search;Bain analysis 15Decarboni-zationEconomic growthTransition potential|SEA has a clear opportunity to leverage the coming transition for competitiveness and economic growthnot just decarbonization Note:1)Greenhouse gasAs-isTensionbetween growth and costs of just transitionT

82、o-beBalanced ecosystem aligning economic growth with just transition goalsInvestable IdeasAcceleratorsGreen fuel sourceProcess optimizationImproved farming practicesNature-based solutionsGreener transportEnergy efficient buildingsPolicy&incentivesCluster/pilot developmentRegional collaborationLow GD

83、P per capitaAddress poverty and job security(job losses/transition concerns)Rising GHG1 emissionsAchieve net-zero targetsReduce GHG emissionsEconomic growth including new revenue pool and job creationDecarboni-zationEconomic growthInnovative finance mechanism Private corporate investment16=Size of p

84、rize|Unlocking the regions green economy could be worth another$300B annually by 2030Notes:1)Gross new revenue updated the size of prize data from 2020 and 2022 report;OthersCarbon trading market;annual gross new revenue does not include economic losses from green transition such as job losses,busin

85、esses shut down from coal plants phase-out,or economic losses of decreasing sales of ICE vehicles|Sources:IEA;OECD;IRENA;BNEF;MAS;Climate Watch;Lit.search;Bain analysisSoutheast Asia Green Economy revenue pool by 2030$300B15%of 2030F SEA GDP$30B$40B$60B$70B$90B17Key RecommendationsNote:1)Ring-fenced

86、 green investment targeting industrial zones(e.g.,Samalaju Industrial Park in Bintulu,Malaysia)Advance country and regional plans for the transition pathInvestors want certainty on the next wave of transition and how industries will evolve;certainty backstops investment ideas and greater focus on wh

87、at we can do today is an imperative to accelerate actionFocus attention on investable decarbonization ideasInvest behind proven ideas with high impact(abatement potential)and deployability(scale and time to impact/decarbonization)Scale up policies and incentives to enable corporate actionAccelerate

88、policies like carbon pricing,clusters for green transition1,disclosure,and regional collaboration;actively promote interoperable frameworks that support cross border finance and capital at the lowest costPromote innovation in finance to catalyze investmentScale innovative finance mechanisms(e.g.,ble

89、nded finance,carbon credits,project financing)to ensurevarious investors have sufficient drive/business cases to invest 18Why Now?|SEA has a window of opportunity that it needs to seize todayTime is short to deliver 2030 commitments First steps known and achievableOpportunity to ride growth wave wit

90、h green solutionsGeopolitical and corporate tailwinds favor action in SEA Achieving NDCs1 requires action now,given lead times(e.g.,to upgrade transmission&grids,build renewables),and requires new financing solutionsNo new technologies or solutions required to decarbonize as SEA is still early in it

91、s decarbonization journey(e.g.,focus on renewables and energy efficiency)the easiest emissions to tackleRegion is today experiencing economic expansion with new investments and infrastructure,presenting an opportunity for green solutionsUSA,EU,and China all seek to influence pace of change;SEA to em

92、erge as a center for green exports,markets&investmentsNote:1)Nationally determined contribution 19Key numbers of this reportNotes:All dollar amounts are quoted in USD;SBTi=Science Based Target initiativeTodayBy 2030countries have shown progress on taxonomy,emissions reporting,or carbon marketsgrowth

93、 per annum in SEA companies who committed or set SBTi targetsPrivate green investments in SEA vs.$5.2B in 2022Rising commitments unconditional reduction in emissions from forecasted level in 2030$1.5Testimated cumulative investment needed to meet 2030 targetsSignificant,consistent investment is need

94、ed up to 2030Material action neededcountries net-zero roadmaps are conditional on securing fundingof the top emitting corporates have announced corporate level roadmapsof power sector still dependent on fossil fuels for generationReality on the groundPath ahead with benefits beyond decarbonization13

95、top investable ideas identified$300Badditional annual new revenue from green economy by 2030$150Badditional annual new revenue from top investable ideas by 20306 out of 105 out of 1020 out of 10075%2x$6.3B2.4 GtCO2e20State of Play21SEA has a critical role to play in global climate action and decarbo

96、nization Notes:1)Comparing primary energy(energy available as resources before it has been transformed)consumption in 2022 in ASEAN6 with other individual countries in the world,accounts for 5%of the global primary energy consumption;2)In 2022;3)in 2020;4)Electricity generated by coal,natural gas,oi

97、l,and other non renewables in 2021;5)In 2022,33 units of motorcycle out of 100 people;6)Refer to land with=30%canopy density cover;GHG=greenhouse gasSources:Euromonitor;Our World in Data;World Bank;Climate Watch;IRENA;Global Forest Watch;Asia Automotive Analysis;Lit.search;Bain analysisMany levers r

98、eady to drive impactful decarbonizationMajor contributor to global GHG emissions7%largest energy consumer in the world14th increase in GDP vs.global increase of 4%27%contribution to global emissions from land use change and forestry3 55%of electricity derived from fossil fuels475%automobiles for eve

99、ry 100 people511of land area is forest,declining 1%annually in last five years660%22GHG emissions in SEA region(GtCO2e)SEA has committed to cut emissions by 32%by 2030urgent need for accelerated action to shift trajectoryNotes:1)Projected emissions level should there be no significant change in tech

100、nology,economics,or policies such that historical trends continue;2)Emissions level committed by SEA countries that can be reached with own resources and capabilities and without international support;3)Emissions level committed by SEA countries that can be reached subject to international support a

101、nd/or other conditions;GHG=greenhouse gas;NDC=Nationally Determined Contributiona countrys official commitment to greenhouse gas emissions reduction as submitted to the UNFCCCSources:UNFCCC Country NDCs;Climate Watch;EU EDGAR;Bain analysis Unconditional NDC2Conditional NDC3Business-as-usual12.4Gtgap

102、 in 20304.93.9Emissions outlookCurrenttrajectorySEA needs to deliver a material reduction vs.business-as-usual32%reduction in emissions is required by 2030 to meet NDC target;more need to start today to deliver a successful outcome with only five years to goLeading indicators in 202223 emissions sug

103、gest further riseNational emissions data is limited by multi-year lag;however,trajectory of industrial emissions level,regional energy consumption,and GDP growth all suggest little change in emissions trajectory23SEA renewed its commitments at COP28 and pushed for greater global support for transiti

104、onNotes:1)Seven years earlier than planned;2)Energy Transition Mechanism;3)Asian Development Bank;4)United States Agency for International DevelopmentSources:ADB;Lit.search;Bain analysisExamples not exhaustiveKey SEA commitments in COP28Accelerating energy transitionReaffirmed commitments to renewab

105、le energySought solution for early coal phase outSingaporeLaunched blended finance initiative,Financing Asias Transition Partnership(FAST-P),which will aim to mobilize up to$5BPhilippinesADB3 announced to allot$10B(20242029)and Canada committed on climate finance(run until 2026)ASEANThe USAID4 Partn

106、erships for Asias Green Investment(PAGI)activity announced to mobilize$160M for emissions reduction in SEAIndonesiaAgreed to early retirement1 of 660 MW coal-fired power plant Cirebon-1,under ETM2 program of ADB3CambodiaClosed 700 MW Botum Sakor coal fired power project,which received$1.5B in fundin

107、g,and replaced with 800 MW LPG factoriesCambodiaAnnounced to increase the use of renewable energy to 70%by 2030up from 52%in 2022MalaysiaHighlighted the goal to elevate the share of renewable energy in power installed capacity from 50%to 70%in 2050Upgrading climate financeNew funding commitments and

108、 initiatives from both domestic/foreign investors24SEA countries maturity towards transition evaluatedDimensionsSize of green investmentNational sector-level roadmapCorporate roadmapTarget cascadingRegulatory frameworkFinancial prerequisitesInfrastructure and technologyEmissions level and decarboniz

109、ation leversKey questions for each SEA countryWhat is the total size of investment to green economy by category,investor type,and country?Where is it headed?Do clear short-term and long-term sectoral roadmaps exist to reach target?Do top emitting corporates have roadmaps to achieve targets?Is there

110、a net zero target?Is it legally binding?Is it sufficient to hit 1.5C?Are the targets cascaded to each sector?To leading corporates?Are there necessary standards and regulations in place?Are there necessary taxes,incentives,and carbon pricing mechanisms?Are the existing infrastructure and implemented

111、 technology sufficient?What is the current state of emissions levels?What level of progress has been reached across each major lever?(Energy,Nature,Agriculture)05Investment03Roadmap01Target-setting and qualityAmbition04Accelerator02Progress25Scope:Our assessment covers 10 SEA countries,100 corporate

112、s across 3 major emission sectorsNotes:1)Timor-Leste is not covered due to low GHG emissions level(less than 5 MtCO2e);2)6 corporates were examined for Vietnam and 5 corporates for Myanmar,Cambodia,Laos PDR,and Brunei due to the limited number of corporates officially disclosing their emissions leve

113、ls;3)Latest GHG emissions data available;GHG=greenhouse gas|Sources:Climate Watch;Lit.search10 corporates2 in each country with high GHG emissionsEnergy,nature,and agriculture sectors10 SEA countries are covered1 BruneiCambodiaIndonesiaLao PDRMalaysia MyanmarPhilippines SingaporeThailandVietnamTop 1

114、0 corporates with high reported GHG emissions levels in each country90%of emissionsCountriesSectorsCorporates2020 SEA326Assessment resultsOverallAssessmentSignificant progress in defining“what needs to be done”as more countries established roadmaps Yet,“how to get it done”still unclear due to insuff

115、icient regulations and incentives to facilitate the implementation of plansAmbitionProgressRoadmapAcceleratorInvestment7/10 of the countries showed progress in one or more of the following dimensions:adopting renewable energy and electric vehicles,preserving forestland,and enhancing health of cropla

116、nd soilAdditional 15 of top 100 emitting corporates set new net zero/emissions reduction target in 2023.Now more than half of the 100 companies have a target All country level targets have remained the same as the previous year,resulting in no country having targets sufficient for 1.5Ahead of COP28,

117、5/10 of the countries updated sectoral roadmaps,emphasizing“energy transition”and specific KPI1 targets and milestonesMost newly announced roadmaps rely on catalytic capital from foreign investors to realizeOnly 20/100 of the top emitting corporates announced corporate level roadmaps6/10 of countrie

118、s have shown progress on taxonomy,emissions reporting,or development of local and regional carbon marketsOnly 1/10 of the countries has sufficient regulatory framework,including legal mandates to promote renewable energy investmentGreen investment increased by 20%versus 2022 levels in 2023($6.3B)Inv

119、estment amount from domestic investors took over that of foreign investors in 2023Overall investment amount still too small to achieve targets Contribution from corporate investments are larger while investments from PE/VCs2 decreasedProgress made is still insufficient.Renewable energy is still less

120、 than 10%of installed capacity in most countries+Note:1)Key performance indicator;2)Private equity/venture capital27Introducing the SEA Green Economy Index and progress matrix What is it?How to interpret?1.Index of decarbonization maturity2.Assessed across five different dimensions:Ambition/Progress

121、/Roadmap/Accelerators/Investment1.Provides how each country is performing year on year and relative to peers on decarbonization maturity2.Clarify potential areas of improvement for each country1.Heatmap assessment of status of decarbonization progress towards 2030 NDC targets2.Assessed across five d

122、ifferent dimensions:Ambition/Progress/Roadmap/Accelerators/Investment1.Provides year-on-year progress of the country in effective delivery of climate targets 2.Clarifies potential areas of improvement for each countrySEA Green Economy IndexSEA Progress Assessment Matrix 282024 SEA Green Economy Inde

123、x:ASEAN countries have made varying degrees of progress over the last 12 months;Singapore and Vietnam leading the way with the most progressNote:Progress,Roadmap,Accelerators are assessed based on relevant indicators at both country and sector levelSources:Country NDC;LT-LEDS;Climate Watch;BMI;IRENA

124、;BNEF;FAO;Global Forest Watch;Euromonitor;AVCJ;S&P Capital IQ;Preqin;Pitchbook;Industry participant interviews;Lit.search;Bain analysisMethodology is illustrated in detail in the Appendix(pg 166)24vs.2324vs.2324vs.232424vs.2324vs.23+4+2+2+2+3+3+5+2-+2+3+1+1-+2+4+7+1-+1-+1+3+1+8+8+4-+19+6+8+18-+5+1-3

125、-1-1-1+3+3-2-+12-6+1-OverallIndexAmbitionProgressRoadmapAcceleratorsInvestmentSingaporeMalaysiaIndonesiaThailandPhilippinesCambodiaVietnamLaos PDRMyanmarBruneivs.23292024 SEA Progress Assessment Matrix:Most countries are focused on cascading targets to sector-level plans and developing financing opt

126、ions Notes:Progress,Roadmap,Accelerators are assessed based on relevant indicators at both country and sector level;1)Significant changes are highlighted in red even if the final assessment result for each dimension did not change;2)Emissions Trading SystemsSources:Country NDCs;LT-LEDS;Climate watch

127、;BMI;IRENA;BNEF;FAO;Global Forest Watch;Euromonitor;AVCJ;S&P Capital IQ;Preqin;Pitchbook;Industry participant interviews;Lit.search;Bain analysisMethodology is illustrated in detail in the Appendix(pg 166)Significant change since previous year1Overall assessmentTarget-setting and quality Target casc

128、ading AmbitionCurrent stateProgressNational sector-level roadmapCorporate roadmapRoadmapSize of green investmentInvestmentRegulatory frameworkFinancial prerequisitesAcceleratorInfrastructure&technologyOn track to deliver targetLikely on track to deliver targetUnlikely on track to deliver targetWork

129、required to deliver target2324232423242324232423242324232423242324BruneiCambodiaIndonesiaLao PDRMalaysiaMyanmarPhilippinesSingaporeThailandVietnamKey observationsNew corporate targets towards net zero seen in 6/10 countries1Indonesia emissions from nature have continued to drop due to reduced defore

130、station5/10 countries have updated national roadmap at sector level that is conditional on securing catalytic capitalCorporates in 3 countries(Indonesia,Philippines,Singapore)have shown progress in establishing roadmapsMinor progress from financial prerequisites(e.g.,ETS2)made in 3/10 countriesInves

131、tment began to rise again($6.3B 2023 vs.$5.2B 2022)But all SEA countries still has big gap between the required and the actual amount of investment($1.5T required investment until 2030 to fund the transition)2345612345630More high-GHG emitting corporates have set net-zero targets across 6 SEA countr

132、iesNotes:Scope of emissions,baseline year:Jardine Cycle&CarriageScope 1&2,2019;SBS TransitScope 1&2,2022;YTLScope 1,2010;IndocementCO2,1990;Astra,United TractorsScope 1&2,2019;Gulf Energydefinition not found;Ratch Groupscope 1&2,2014;AcenScope 1,2021;VinamilkScope 1&2,2021;1)Top 10 emitting corporat

133、es 2)6 corporates were examined for Vietnam due to the limited number of corporates officially disclosing their emissions levels;3)By 2025Sources:Lit.search;Bain analysisPROGRESS ASSESSMENT01AMBITION2022 Sustainability report“In alignment with the Singapore Green Plan 2030,we establish sustainabilit

134、y goals and targets in emissions,energy,and resource efficiency.”2022 ESG Report“We have set a high-level target for our Group in line with the Malaysian Governments goal.”2022 Integrated report“Our pivot towards renewables galvanizes our position as a formidable regional player as the world takes u

135、rgent action to achieve a cleaner energy ecosystem.”Emissions reduction target305030%N/A20%Net zero60%Net zero65%N/A30%73.6%Net zero15%Net zeroN/ANetzero70%3Carbon neutralSingaporeMalaysiaIndonesiaThailandPhilippinesVietnamCorporates1with target9/107/106/107/105/103/62Newly added in 2022+2+2+1+2+1+1

136、Unlikely to be sufficientLikely to be sufficientSBS TransitYTL Power YTL GROUPACENSBS TransitJardine Cycle&CarriageYTL Power YTL GROUPAstraINDOCEMENTRATCH GROUPGULFACENVinamilkEST 197631Emissions:Final data for 2020 quantify stable or rising emissions in most countries;further rising afterNotes:GHG=

137、greenhouse gas;EV=electric vehiclesSources:Climate Watch;EU EDGAR;Lit.search;Bain analysisKey takeawaysThe overall emissions level in the region is showing consistent and predictable growth(GHG emissions,MtCO2e)72306443338792386544944272286445145803001,5001,8002,100B

138、runeiCambodia Indonesia Laos PDRMalaysiaMyanmar Philippines SingaporeThailandVietnam1,6411,9141,476201820192020Percentage of EVChange in tree coverPercentage of renewablesNutrient use efficiencyGHG emissionsEmissionSectorPROGRESS ASSESSMENTPROGRESS021Excluding emissions from nature,emissions level s

139、howed a rising trend of 2%and 5%in 2021 and 2022,respectivelyEven Indonesia,which had a significant decrease in emissions in 2020,demonstrated a significant increase with a CAGR of 6%in 2021-20221The current emissions level in the region is highly likely not on pace to meet the 2030 reduction target

140、As per the 2020 official data,a few countries including Indonesia showed a temporary decrease,but they seem to have rebounded since 2021All other leading indicators for emissions in the region show a steadily rising trend,thus the latest data for up to 2023 is certain to show increasing emissions32K

141、ey takeawaysShare of renewable energy:SEAs solar and wind generation remain low at 4%;only Vietnam shows material increaseNotes:1)Share of total renewable energy of installed capacity includes installed capacity of solar,wind,hydro,geothermal,and biomass;GHG=greenhouse gas;EV=electric vehicles Sourc

142、es:IRENA;BNEF;EMBER;Lit.search;Bain analysisEmissionSectorPercentage of EVChange in tree coverPercentage of renewablesNutrient use efficiencyGHG emissions35015IndonesiaMalaysiaPhilippinesThailandVietnam020022The impact of renewable energy is expected to be offset by

143、the continuous increase in energy demand,more readily supplied by fossil fuels,in the region11(Percentage of solar and wind energy in electricity generation,%)PROGRESS02PROGRESS ASSESSMENTMost countries are slow to increase share of renewable energyIn contrast,Thailand shows no clear upward trend du

144、e to low feed-in-tariff and limited potential in wind energyVietnam only shows significant growth due to high feed-in-tariff and favorable climatic conditions characterized by abundant sunlight and strong wind speedsShare of installed capacity1 from solar and wind energy(2022)1%5%7%8%29%33Notes:Elec

145、tric 2W shows faster market penetration compared to 4W in most ASEAN countries%of electric 2W in total 2W sales in Indonesia,Malaysia,Philippines,and Vietnam in 2022 is 1-7%p higher than that of 4W shown in the graph(e.g.,%of E2W in Vietnam in 2022 reaches 10%);1)Not including plug-in hybrid cars;2)

146、Data for the Philippines unavailable,but highly likely to be lower than 0.01%when considering trajectory;3)Singapores Urban Redevelopment Authority and Land Transport Authority awarded a pilot tender for 600+EV charging points in public car parks in 2021 and uncertainties in EV tax breaks could also

147、 have affected the increase of EV registration as EV Early Adoption Incentive was announced to end in Dec 2023,and incentives for cleaner commercial vehicles were halved in April 2023;4)Incentives for EV production result in$4.3B investments from Japanese automakers;5)Chinese manufacturers could off

148、er a low price as they could access the market duty-free due to China-ASEAN free trade agreement;GHG=greenhouse gas;EV=electric vehicles|Sources:BMI Fitch;BNEF;Marklines;Lit.search;Bain analysisEV penetration:Takeoff in EVs spotlights potential,importance of government incentives and infrastructureP

149、ercentage of EVChange in tree coverPercentage of renewablesNutrient use efficiencyGHG emissionsEmissionSectorKey takeawaysSingapore experienced a temporary dip due to insufficient infrastructure but began to stabilize from 2022,with the implementation of more charging stations3Has been providing inc

150、entives for EV production4 and offering wide options of affordable EVs from Chinese car makers5380%increase in battery EV sales in Thailand in 20232Share of EV in total fleet(2022)0.06%0.01%0.01%20.98%0.28%0.70.40.21.10.12.50.21.30.12.92810120IndonesiaMalaysiaPhilippinesSingaporeThailandVietnam0.0 0

151、.00.0 0.0 0.00.00.0 0.03.7 11.67.90.0 0.00.0120.28%20022(Percentage of battery EV1 in annual 4W passenger car sales,%)PROGRESS021PROGRESS ASSESSMENTEV market continues to grow across all countries34EV penetration:A significant opportunity for 2-wheeler EV adoption in SEANotes:1)Absence of

152、 data for 2022 and 2023,but noted decline in electric 2W sales following reduction of government incentives;2)Reference developing Asia sales given limited data from 2015 to 2021;EV=electric vehiclesSources:Euromonitor;IEA;Marklines PROGRESS02PROGRESS ASSESSMENT2-wheeler is the major passenger vehic

153、le use2-wheeler EV penetration has headroom to grow in SEA Share of passenger vehicles in use by vehicle type(%)88%49%63%18%69%96%020406080100IndonesiaMalaysiaPhilippinesSingaporeThailandVietnamPassenger cars(4W)Motorcycles and mopeds(2W)Electric 2W sales share(%)00200182019202

154、0202120222023ChinaIndonesiaMalaysiaPhilippinesThailandVietnam3574.57.429.896.8EV67.022.3134.089.4ICE208.5 K312.7 K(-33%)12.75.115.918.4EV12.712.728.615.9ICE52.1 K69.9 K(-25%)16.912.721.121.1EV14.816.925.316.9ICE71.7 K73.9 K(-3%)24.911.113.923.6EV19.427.755.418.0ICE73.4 K120.5 K(-39%)17.71.624.216.1E

155、V20.94.068.418.9ICE59.6 K112.3 K(-47%)EV penetration:From a consumer point of view,the total cost of ownership of EV 2-wheelers is already cheaper than ICE,presenting a business case to transition to EV modelsNote:The ICE 2W uses Yamaha Y15ZR equivalents in each market while EV uses EGAT model in TH

156、,Scorpio model in SG,Dat Bike model in VN,Eclimo model in MY and Gesits model in ID.The model assumes 100%battery swapping/out-of-home charging,if home charging was assumed the parity to ICE would be more favorable;EV=electric vehicles;ICE=internal combustion engine|Source:Lit searchPROGRESS02PROGRE

157、SS ASSESSMENT2-wheeler total cost of ownership analysis(USD)IndonesiaMalaysiaSingaporeThailandVietnamFinancing and insuranceMaintenanceFuel costPurchase priceEV/ICE purchase price premium(%)Indonesia:16%Malaysia:25%Singapore:8%Thailand:31%Vietnam:-15%36Deforestation:Almost all countries across SEA a

158、re seeing steady reduction in deforestation due to effective policiesNotes:Tree cover loss in the chart includes=30%canopy density threshold;1)Calculated by(the amount of tree cover loss in a specific year)/(the amount of tree cover loss in 2018)1;2)Vietnam Forests and Deltas,payments for forest env

159、ironmental services;3)Covers 66 million hectares;4)Includes market-based Forest Carbon Offset mechanism;GHG=greenhouse gas;EV=electric vehiclesSources:Global Forest Watch;Lit.search;Bain analysisPROGRESS ASSESSMENTPROGRESS02Key takeawaysDeforestation continues but the rate of forest loss is slowingV

160、ietnam continues to implement regulations2 for forest conservation1Indonesia has announced permanent moratorium on the conversion of forest and peatlands3 to other uses in 20192Malaysia has established Malaysia Forest Fund in 2021,which implemented REDD+Finance Framework43Percentage of EVChange in t

161、ree coverPercentage of renewablesNutrient use efficiencyGHG emissionsEmissionSector(Amount of tree cover loss compared to 20181)SingaporeThailandCambodiaMyanmarLaos PDRBruneiPhilippinesMalaysia3Indonesia2Vietnam1Further deforestation in the Philippines due to continued commodity-driven forest loss f

162、rom mining,forestry and other urbanization activities4437Key takeawaysNo improvement in the overall soil health in SEACambodia emphasizes the importance of preserving soil and water in recently announced sectoral roadmap21Philippines Rural Development Project significantly enhanced farm and fishery

163、productivity3 by supporting smallholders from 1,200 projectsUnder the Organic Agricultural Act,the Philippines provides tax incentives to organic agriculture entities and explicit support for the deployment and development of organic fertilizers2Soil health:No clear improvement in soil health,signif

164、ying importance of alternative farming methodsNotes:Nutrient use efficiency(nutrient output divided by nutrient input)indicates cropland nutrient deficits that limit crop production or nutrient excessiveness that leads to more pollution from leaching/runoff;1)The difference between each efficiency v

165、alue of cropland nitrogen,phosphorus,and potassium and the optimal state of 100%were calculated,and then calculated the average of these differences;2)Circular Strategy on Environment(2023),Roadmap for sustainable consumption and production(2022);3)Actual amount of productivity enhancement in the ta

166、rget area is disclosed in Philippines Rural Development Project Implementation Status&Results Report;GHG=greenhouse gas;EV=electric vehicles|Sources:FAOSTAT;World Bank;Lit.search;Bain analysisPROGRESS ASSESSMENTPROGRESS02(Nutrient use efficiency,1 100 point score)Percentage of EVChange in tree cover

167、Percentage of renewablesNutrient use efficiencyGHG emissionsEmissionSector300100BruneiIndonesiaLaos788686 907580676746494862675666675667373687777755971VietnamCambodia46ThailandSingaporePhilippinesMyanmarMalaysia200212138Five countries made progress in net-

168、zero roadmap;Delivery will be conditional on securing fundingNote:1)Mainly includes greenhouse gas emissions abatement potential and cost effectiveness Sources:Expert interviews;Lit search;Bain analysisPROGRESS ASSESSMENT03ROADMAPWhat works wellDefines“energy transition”as key intermediate state of

169、decarbonization with more practical solutionsRegards renewable energy as the most critical power source,not just as one of manyHeightens validity of proposed initiatives by presenting prioritization criteria1Enhances achievability of goals by setting KPI targets and milestones,and assigning responsi

170、ble champions for each initiative in many countriesIncrease the potential for attracting investment by presenting financing objectives and plans after recognizing the crucial need for investmentWhat could be challengingWhile“transition”has become a key concept in the region,some countries still lack

171、 roadmaps explicitly addressing itTop priority is boosting renewable energy capacity,which overshadows prerequisites in the grid and tariffsSome countries still lack targets and milestones for NDCsMost plans rely on funds from external investors for material challenge to resolve to deliverKey takeaw

172、ays from national sector-level roadmaps announced in 2023Emergence of“energy transition”roadmapIndonesiaFinancing target and planMalaysiaPrioritized initiatives based on specific criteriaIndonesiaSpecific targets and milestones for each initiativesIndonesiaMalaysiaMalaysiaMalaysiaVietnamVietnamVietn

173、amThailandSingapore39Details are illustrated in Country Insights section(pg 133)More concrete and feasible financing needed to make plans realisticNotes:1)Comprehensive Investment and Policy Plan;2)Report in the progress of drafting;3)Power Development Plan 8;4)Just Energy Transition Partnership Res

174、ource Mobilization Plan;5)National Energy Efficiency policy;6)Roadmaps related to energy transition in Singapore have limitations as they are predicated on collaboration with other countries in SEA and other regions;7)Alternative Energy Development Plan|Sources:UNFCCC;Lit.search;Bain analysisEvaluat

175、ion of energy roadmapsKey ElementsEmergence of“energy transition”roadmapHas energy transition roadmapNo roadmap for energy transition but for REOnly high-level power/energy planPrioritized initiatives Prioritized initiatives with concrete criteriaPrioritization made,but criteria unclear or only for

176、certain sub-sectorOnly a long list of initiatives includedQuantified targets,milestones for all initiativesQuantified targets,milestones partially setLimited coverage of targets and milestonesSpecific targets and milestonesFinancing target/plan for all types of investorsTarget without further plans;

177、target/plan for limited types of investorsOnly high-level plans without quantified targetsFinancing target and planCambodiaDefined for energy efficiency in NEEP5(2023)Defined for energy efficiency in NEEP5(2023)BruneiOnly a list of initiatives without prioritiesNo quantified target/milestonesVietnam

178、PDP83,JETP RMP4(2023)JETP RMP4(2023)PDP83,JETPRMP4(2023)Financingplans from foreign catalytic funds in JETP RMP4(2023)ThailandNatl Energy Plan(20232)Recommendations drawn from analysis in Clean Energy Transition(2023)Targets set for%RE in multiple sectors but not for initiatives in AEDP7(2018)Only f

179、ew finance initiatives without quantitative measuresSingaporeOnly high-level power/energy planEnergy Story(2019)Green plan6(2021)Hasinvestment targets in Green Finance Action Plan(2019)PhilippinesNatl.Renewable Energy Program(2022)Mandatory/voluntary pathway separately presented in roadmap above(202

180、2)Targets set for RE capacity,FIT in roadmap above(2022)Onlyhigh-level strategic financing plans in roadmap above(2022)MyanmarOnly high-level power/energy planOnly a list of initiativeswithoutprioritiesNo quantified target/milestonesNoquantified target/milestonesMalaysiaNatl.Energy Transition Roadma

181、p(2023)Natl.Energy Transition Roadmap(2023)Natl.Energy Transition Roadmap(2023)Natl.Energy Transition Roadmap(2023)Lao PDRRenewable Energy Development Strategy(2011)Only a list of initiatives without prioritiesTargets for a few initiatives&qualitative milestones in roadmap above(2011)Hasinvestment t

182、argets for each sector in roadmap above(2011)IndonesiaJETP CIPP1(2023)JETP CIPP1(2023)JETP CIPP1(2023)Financingplans from foreign catalytic funds in JETP CIPP1(2023)Only high-level power/energy planNo financing target/plan for energy sector setN/AN/AN/AN/AN/APROGRESS ASSESSMENT03ROADMAP40Progress ma

183、de in policy,finance,and infrastructure enablers to accelerate pace of transitionNotes:1)Monetary Authority of Singapore;2)Brunei Darussalams National Climate Change Committee;3)CFPP=coal-fired power plant;4)Singapores index score remains the same as it already had carbon tax;5)Department of Climate

184、 Change;6)Comprehensive Investment and Policy Plan;7)Just Energy Transition Partnerships;8)Energy Generating Authority of ThailandSources:Expert Interview;Lit.search;Bain AnalysisPROGRESS ASSESSMENT04ACCELERATORInfrastructure Carbon pricing IndonesiaMinistry of Energy newly launched mandatory Emissi

185、ons Trading System for power sector in 2023MalaysiaStarted to review carbon pricing instrument in 2023 and plans to complete reviewing process by 2024SingaporeIncreased carbon tax from S$5/tonne to S$25/tonne from 202425Allow 5%of emissions to be offset with international carbon credits VietnamDCC5

186、announced that development of carbon pricing instrument and Emissions Trading System has begun and will be operational by 2028Progress on carbon tax and ETS seen in 4/10 countries4 New initiatives in place to improve grid capacity in 4/10 countriesIndonesiaAnnounced transmission lines and grid deplo

187、yment as an investment focus area in CIPP,6 recently unveiled roadmap of JETP6ThailandEGAT,8 Thailands state power company,developed new centers that can support additional 8 MW renewable energyLaos PDRThe World Bank approved Power Distribution Improvement Project to increase capacity and efficiency

188、 of domestic electricity gridVietnamAnnounced plans to develop grid infrastructure for renewable energy usageDisclosure and standardsUpdated version of ASEAN taxonomy was announced including new assessment method of economic activitiesBruneiBNCCC2 issued directive on mandatory GHG emissions reportin

189、g for government department and private companies starting from 2023SingaporeMAS1 launched Singapore-Asia Taxonomy for Sustainable Finance to establish a framework for CFPPs3 phase-outPhilippinesAdditional annual report on sustainability,including GHG emissions reporting,is mandatory for all publicl

190、y listed companies starting from 2023Regional taxonomy being updated or newly launchedEmissions reporting mandatory for 6/10 countries,with 2 starting from 202341Investments by theme:Power remains the largest emissions category across the region;wind power,alternative fuels,and green data centers sh

191、ow significant increase YOYNotes:Figures include private sector deal transactions which are categorized as“closed”and“effective”and$10M in size,including private placements and excluding IPOs.Used allocation methodology from the previous report.Amount not representative of overall private sector inv

192、estment;Of the total investment of$692M for the Monsoon Wind Power Project in Laos PDR,$300M is duplicated in data for 2022 and 2023;Transactions tagged as Other account for 9%of the total investment;1)Alternative protein;2)Malaysia:passed Energy Efficiency and Conservation Act requiring mandatory a

193、udits and energy saving measures to companies with certain amount of energy consumption,Singapore:launched Built Environment Industry Transformation Map(ITM)and planning to introduce Mandatory Energy Improvement(MEI)regime by the end of 2024,including building energy efficiency requirements,led by T

194、he Building and Construction Authority|Sources:AVCJ;S&P Capital IQ;Preqin;Pitchbook;Lit.search;Bain analysis 05INVESTMENTSPrivate green investments in SEA countries(USD B)CAGR21222223214%250%1,106%5%-14%-14%-22%-18%-86%2,079%PROGRESS ASSESSMENTInvestment increase in agricultural productivityE.g.,$20

195、0M investment in eFishery,which provides services to increase efficiency in fishingNature/agriculture EV continue to be attractive,mostly in SGE.g.,$50M Ilectra Motor group invested by venture capitals and a corporate TransportIncrease in investments for green data centers driven by release of energ

196、y efficiency regulation1 in Malaysia and SingaporeE.g.,$530M investment in Nusajaya and Kulai data center in MalaysiaE.g.,$402M acquisition in PT Teknologi Data Infrastruktur by Singtel BuildingsInvestments in waste management increased with efforts toward water treatment and plastic recyclingE.g.,$

197、682M Three-River System Wastewater Project in the PhilippinesE.g.,$60M Central Java PET Recycling Facility in IndonesiaIndustrial/wasteThe biggest category in SEAMore opportunities pursued around wind power systemsDue to geological limitation of solar power system,shift from solar to wind is seen in

198、 the region(e.g.,$692M Monsoon Wind Project in Laos PDR)Power6.342Investments by country:Indonesia and Philippines 50%of investment;largest growth in MalaysiaNotes:Figures include private sector deal transactions which are categorized as“closed”and“effective”and$10M in size,including private placeme

199、nts and excluding IPOs.Used allocation methodology from the previous report,calculating the investment size of a country based on where the target company of the deal is operating.Amount not representative of overall private sector investment;Of the total investment of$692M for the Monsoon Wind Powe

200、r Project in Laos PDR,$300M is duplicated in data for 2022 and 2023;1)Power Development Plan 8;2)Asian Development Bank;3)Japan International Cooperation Agency|Sources:AVCJ;S&P Capital IQ;Preqin;Pitchbook;Lit.search;Bain analysis 05INVESTMENTSPROGRESS ASSESSMENTVietnamDue to wait for PDP81 and clar

201、ity on the pricing mechanism,no large-scale investment in renewable energy in 2023,unlike the past years with big solar and wind projectsThailandAlthough the number of investments decreased,large-scale investment($350M)in the wind sector has been made,maintaining a similar level as last yearLaos PDR

202、A large-scale project to unlock Laoss renewable potential is being carried out by foreign investorsE.g.,$692M Monsoon Wind project invested by ADB2,JICA3,and 8 othersMalaysiaShowed significant increase by attracting large-scale($530M)green financing for data centers in Johor and KulaiSingaporeShowed

203、 decrease as there were no large deals$100M,and many of the companies invested in operations outside of SingaporePhilippinesInvestments toward infrastructure for green energy by domestic investors are brisk,leading to an increase in investmentsE.g.,$682M Three-River System Wastewater project investe

204、d by Manila WaterIndonesiaSteadily growing in investments whereas rest of the region experiencing fluctuations driven by large,one-off dealsE.g.,$60M investment in Central Java PET Recycling Facility by ALBA Group491%28%-67%57%-31%-21%98%326%N/A126%299%8%58%-79%Private green investments in SEA count

205、ries(USD B)CAGR212222236.343Investments by investor:Domestic corporates and investors playing a larger role;climate funds also growingNotes:1)(Investor type)Corporates invest in more large-size deals compared to other investor types,and more investment in green start-ups is led by the growth of clim

206、ate funds(e.g.,$200M investment in eFishery,an aqua-tech start-up);2)(Investor origin)Increase in the share of domestic investments is aligned with national and corporate level green targets and roadmaps,and investments from foreign countries continue to decline Sources:AVCJ;S&P Capital IQ;Preqin;Pi

207、tchbook;Lit.search;Bain analysis 05INVESTMENTSPROGRESS ASSESSMENTPrivate green investments by investor type1Private green investments by investor origin2Majority of green investments are made by corporatesMore domestic investments within SEA region while consistent decline in foreign investmentsCAGR

208、21222223-13%40%-52%73%43%-55%494%210%15%-62%CAGR21222223146%75%60%-23%-57%-16%USD BUSD B%SWF/gov.affil.9%5%7%Privatefunds18%27%13%Corporate%Domestic73%69%80%16%42%61%6.36.344ASEANs first cross-border,largest wind project launched in 2023,offering 600 MW capacityGenerated electricity will be exported

209、 to Vietnam for 25 years Expected to reduce 27%of carbon emissions in Vietnam by 2030Notable new investments in 2023Notes:1)DC West,DC Kim Chuan;2)Building and Construction AgencySources:AVCJ;S&P Capital IQ;Preqin;Pitchbook;Lit.search;Bain analysis 05INVESTMENTSPROGRESS ASSESSMENTSolar Power New Ene

210、rgy Corp.(SPNEC)Spearheading the nations energy transition by building the worlds largest solar project$286 millionControlling stake of SPNEC acquired by Meralco 50.5%of the shares acquired by MGen,Meralcos renewable energy development armPhilippinesGreen Loan financing for Singtel data centersAdvan

211、cing digital sustainability and energy efficiency in green-certified data centers$401 millionFive-year loan secured,coordinated by 4 domestic investors 4 investors are all corporateSingaporeMonsoon Wind ProjectAccelerating the regions energy transition by unlocking the potential of Laoss wind power$

212、692 millionFinancing package provided by 10 foreign investors Comprises loan A and B(36%),catalytic financing(7%),parallel loans(55%),grant(1%)Investors include 4 corporates,3 state-owned banks,2 infra funds,and 1 climate fundLao PDRTwo data centers1 of Singtel secured green loan to support the oper

213、ations and refinance borrowings Both are on the way to implement liquid cooling and AI for energy efficiency Could attract the fund as they have acquired the highest level of green building certification by BCA2Meralco,an electricity distributor,invested in SPNEC,a developer of solar farmsSPNEC will

214、 be used to carry out the largest solar project in the world The planned solar project in Luzon is expected to develop 3500 MW of solar panels and 4000 MWh of BESS45Recommendations going forwardCountries and companies need concrete plans to deliver on 2030 commitmentsTo scale investment,a robust eco

215、system with demonstrated success stories is neededInvestment needs to be mobilized via enhanced collaboration between public&private sectorsPolicies and incentives that are catalytic and fit-for-purpose need to be more clearly defined,addressing the regions unique challenges and focusing incentives

216、where we can deliver impactWe need to better define the“how”and build the ecosystem to close the investment gap46Investable Ideas47Investing where it counts in 2024ImpactfulPotential to reduce carbon emissions above 100 MtCO2e/year at steady state for entire value chainAddressableTechnically feasibl

217、e and market ready with immediate emissions returns possible within the next 12 months Sweet spotSEA needs to identify these opportunities and act now48While long-term impact is critical,SEA should prioritize investment today that can deliver meaningful near-term impact and immediate emissions reduc

218、tions Note:Regulatory and finance mechanisms are excluded and covered in accelerator sectionWhat is aninvestable idea?How do we define a short-termcatalytic idea?How can we interpret the short list of prioritized ideas?Technological innovation that can be implementedSolution that brings about concre

219、te emissions reductionTechnically feasible;has been tested or implemented in the marketImmediate emissions returns within the next 12 monthsBrings desirable abatement potential of more than 100 MtCO2e,which accounts for 3%of SEA emissionsOffer a comprehensive view on attractive ideas that can be inv

220、ested todayEncompass various sectors with no specific ranking amongst top 13 investable ideas1.2.1.2.3.1.2.49We assessed 100 decarbonization investable ideas for SEA by abatement impact and deployability Source:Project Drawdown 6 decarbonization opportunities94 investable ideas13 priority ideasEnerg

221、y efficient buildingsImproved farming practicesNature-based solutionsGreenfuel sourceProcess optimizationGreener transportStep 2:Create long list of investable ideas within the 6 prioritized opportunity areas and populate 94 ideas Step 3:Assess and quantify abatement potential and deployabilityStep

222、4:Prioritize high-impact and high-deployability ideas Step 1:Identify and prioritize decarbonization opportunities for SEANature and Agriculture:Improved farming practices;livestock management;nature-based solutionsNature and Agriculture:Improved farming practicesAlternate wetting and drying(AWD)for

223、 rice cultivationBamboo productionOrganic soil restorationPrecision agriculture practiceRegenerative agriculture practiceScale green(low-carbon)fertilizer productionVertical farming AWD for rice cultivationPrecision agriculture practiceRegenerative agriculture practice Example(non-exhaustive)50The i

224、nvestment attractiveness was assessed on abatement potential and deployability Abatement impact DeployabilityEmissions reduction potential(%)Current emissions scope(tCO2e)DeployabilityAbatement potentialHighLow3001000PriorityAbility to address deliver impact today vs.tomorrowtime value of carbonExpe

225、cted net financial benefit to reduce a unit of emissionPRIORITIZATIONATTRACTIVENESS AND DEPLOYABILITY FRAMEWORK51Prioritization:100 investable ideas assessed based onabatement potential and deployability,leading to short listof 16 with top 13 investable ideas prioritizedNote:1)Including additional t

226、echnologies in combination with captive solar;2)vPPA=virtual power purchase agreementAbatement potential(MtCO2e)Short list of ideasDEHCFGIJLNBOKAMPEnergy efficiency improvements for data centers Low-carbon transition fuels for maritime AWD for rice cultivationElectric passenger vehicles and charging

227、 infrastructureCaptive solar+1vPPA2 and bilateral grid interconnectionsTransmission and distribution(T&D)infrastructure expansion Precision agriculture practiceRegenerative agriculture practicePeatlands conservationUtility-scale solar and wind energyForest conservationWaste stream for biofuels produ

228、ctionBlue carbon mangrove restorationOptimization of“subcritical”coal plants during transitionEnergy efficiency improvements for buildingsHighLow52Nature and AgricultureRegenerative agricultureDPowerUtility-scale solar/windCAlternate wetting and dryingET&D infrastructure expansionFPrecision agricult

229、ureHCaptive solar+1GForest and peatlands conservationK/MvPPAs2 and bilateral connectionsITransportElectric passenger vehicles and charging infrastructureAgricultural waste stream for biofuels productionJLBuildingsEnergy efficiency improvements for data centersEnergy efficiency improvements for build

230、ingsAB$150B size of prize if all 13 investable ideas are implemented in SEA by 2030$150BSize of prize by 2030Note:1)Including additional technologies in combination with captive solar;2)vPPA=virtual power purchase agreement53Nature and Agriculture industry landscape Ideas could be implemented togeth

231、er as part of a comprehensive approach to sustainable agriculture and nature conservationIdeas contextRecent developmentsPotential acceleratorsPilot AWD project in Mekong Delta region was initiated by university researchers in collaboration with local farmers in line with master plan created by the

232、government in 2022 for the Mekong Delta to cut greenhouse gas emissions and improve efficiency while diversifying productionPhilippine Rural Development Project Scale-Up initiative approved by World Bank to scale infrastructure investment in irrigation systems for smallholder farmersVietnamPhilippin

233、esPartnerships to drive broad-based change:Provide training and technical assistance to upskill farmers,improve technical know-how,and bring subsequent behavioral change with introduction of smallholder financing solutions Incentives to unlock financing:Revenue incentive mechanisms through carbon cr

234、edits generation as hedge against higher up-front costs and less-certain long-term upsideStandards to scale adoption:Promote policies and guidelines to incentivize sustainable agriculture practices and conservation Potential wild cards to considerClimate variability:Climate change has led to shiftin

235、g seasons and erratic weather patterns,which can affect land viable for agricultural use,reduce productivity,and further deforestationMarket dynamics:Shift in consumers demand or economic fluctuations can influence farmers decision to switch and adopt sustainable practicesAlternate wetting and dryin

236、gForest/peatlands conservationPrecision agricultureRegenerative agricultureEK/MDHAWD and precision agriculture+regenerative agriculture enhance the ecological resilience of operations and improve crop productivityRegenerative agriculture+nature conservation within a landscape restoration framework e

237、nhance soil health,water resources,and carbon sequestration DEEP DIVENATURE AND AGRICULTURE54Assumes improved soil health and fertility would lower synthetic fertilizer usageRegenerative agriculture practiceNote:1)Investment potential is calculated based on additional revenue potential by 2030Transi

238、tion barriers to be addressedProject developers with solutions or technology to increase uptake/lower the cost for farmers adopting regenerative agriculture techniques(e.g.,project aggregators,end-to-end solutions)Micro-financing platforms/start-ups to support loans to smallholder farmersNon-governm

239、ental organizations(NGOs)or societal institutions to educate and support farmers on regenerative agriculture techniquesFinancial:Undesirable unit economics,yielding highly limited investor returns;limited credit availability for farmers to transition/manage riskSocial:Lack of awareness and skepticis

240、m of efficacy among smallholder farmersContext:Vietnamese coffee industrial partners invested$625,000 in a project to enhance access to regenerative agriculture for sustainable coffeeImproved farming practicesSize of prize($B)16.4Emissions(MtCO2e)CAGR(%)Case study:Sustainable coffee productionResult

241、s:Aim to support 10,000 households and influence industry shifts toward sustainable practices within the coffee sectorWhy it works:Strategic partnership fosters acceptance of sustainable practicesEmissions reduction potentialmidtermPotential ways to investCurrent state of playLevers to improve capit

242、al flowsDEEP DIVENATURE AND AGRICULTURE48247148102.0004.0001%2018-2%20192%202016%2030E2.12220%Range of farming techniques like cover crops,crop rotation,nutrient management,and no or reduced tillage Aim to improve soil health,sequester carbon in soil,decrease fertilizer use,and reduce cropland burni

243、ng14%of total SEA emissionsRepresents SEAs agriculture emissions481 MtCO2eD55Assumes only half the progressive farmers would adopt AWD practices in the midtermAlternate wetting and drying for rice cultivationNotes:1)Investment potential is calculated based on additional revenue potential by 2030;(2)

244、nonprofit organizationsSource:FAOSTATTransition barriers to be addressedCarbon market development with established additionality standards to stimulate local demand,leverage international demand,and increase offtake prices for sustainable riceMeasurement,reporting,and verification(MRV)systems and ed

245、ucation/technical assistance to strengthen farmers ability to generate value from carbon creditsTrials/pilots with rice corporations directly or via NGOs2 to build the evidence base for AWD and demonstrate to farmers the limited risks of this techniqueFinancial:Limited economic incentives to adopt A

246、WD practicesSocial:Lack of awareness of AWD;inability to independently incentivize adoption without involving all stakeholders across rice value chainContext:Rice is a staple crop,but production forms the bulk of SEAs methane emissions,which is 28 times more potent than carbon dioxideImproved farmin

247、g practices6.4Case study:Rize.Farm decarbonized rice cultivationResults:Rize.Farm is an agritech start-up building platform that can identify and implement best practices for reducing GHG emissions in rice cultivation while offering farmers economic incentives to adopt such techniquesWhy it works:By

248、 optimizing strategies based on local farming practices and providing tailored incentives across value chain for all stakeholders,it improves yield and soil healthEmissions reduction potentialmidtermPotential ways to investCurrent state of playLevers to improve capital flows40%24923824027502004001%2

249、018-4%20191%20201%2030EWater management technique with scheduled draining practices that allows soil to dry between irrigation cyclesReduces the amount of time the field is flooded to mitigate methane-producing microbial activity and emissionsDEEP DIVENATURE AND AGRICULTURE7%of total SEA emissionsRe

250、presents SEAs rice cultivation emissions240 MtCO2eEmissions(MtCO2e)CAGR(%)ESize of prize($B)156Assumes optimization lowers agricultural inputs,such as fertilizers,pesticides,and seedsPrecision agriculture practiceNotes:1)Investment potential is calculated based on additional revenue potential by 203

251、0;2)Encompass emissions related to crop residues,manure applied to soils,manure left on pasture,manure management,rice cultivation and synthetic fertilizers;3)Nongovernmental organizationsSource:FAOSTATTransition barriers to be addressedMechanization platforms that own and lease machinery to smallho

252、lder farmers to allow the cost of equipment to be amortized across many individual farmsPilots directly or via NGOs3 to build the evidence base for precision agriculture practice and demonstrate to farmers that it can generate additional income for the farmFinancial:High up-front costs that do not g

253、uarantee an income for farmers Social:Varied tech savviness of operators;lack of awareness and skepticism of efficacy among smallholder farmersContext:A multiservice platform raised$3.5 million during fundraising from elea Foundation,a Swiss impact investment firm and Sojitz,a Japanese conglomerate,

254、to support development of agritech in weather analysis,satellite technology,and crop yield modelingImproved farming practices6.4Case study:Ricult ThailandResults:Ricult has over 400,000 Thai farmers on its platform and is recognized for improving farming productivity by at least 20%Why it works:Real

255、-time agronomic advice to support queries from farmers;assistance with loan applications with preferential rates through partnerships with institutionsEmissions reduction potentialmidtermPotential ways to investCurrent state of playLevers to improve capital flows20%SEAs average nutrient use efficien

256、cy of 57%lags the worlds average of 70%and can be improved through adoption of advanced technology to optimize farming practicesTechnologies include data collecting devices and data analytics on soil composition,pH,nutrients,fertility,etc.DEEP DIVENATURE AND AGRICULTURE37636237079902004006008000%201

257、80%20190%20208%2030E11%of total SEA emissionsRepresents SEAs cropland management,fertilizer usage,and irrigation practices2 370 MtCO2eEmissions(MtCO2e)CAGR(%)HSize of prize($B)157Forest and peatlands conservationNotes:1)Investment potential is calculated based on additional revenue potential by 2030

258、;2)Southeast Asia Climate and Nature-Based Solutions CoalitionSource:Landscape Approaches ReportAssumes conserving peatlands holds 42%potential while forest conservation contributes 18%potentialTransition barriers to be addressedRegional developers to build capabilities and scale high-quality projec

259、t development through direct investments or long-term offtake agreementsNature-based solutions(NBS)tech start-ups to improve understanding of practices and benefits of NBS,such as agroforestry and land restorationIncubators to help build the capabilities of local stakeholders/Indigenous groups to de

260、sign and execute repeated nature projectsContext:Coalition with nonprofits in SEA to accelerate high-quality NBS with$1 million grant from Googles philanthropic arm to develop the NBS toolNature-based solutions20.0Case study:SCeNe2 CoalitionResults:Aim to map key geographies with high-impact NBS opp

261、ortunities in an open platformWhy it works:Collective action across regional stakeholders who bring shared expertise and resources to direct climate finance and meet current demand for carbon solutionsEmissions reduction potentialmidtermPotential ways to investCurrent state of playLevers to improve

262、capital flowsFinancial:Nascent carbon markets result in long lead time to revenue generationMarkets:Development of high integrity regional carbon markets at scaleTechnical:Shortage of high-quality developers with a track record60%88673602.00026%201827%2019-35%20207%2030E1.1241.421Conservation of 1)t

263、ropical forests,which are the most biodiverse area globally and largest form of ecosystem in SEA;2)peatland(wetland)ecosystem,which is a crucial carbon sink and plays a vital role in mitigating floods DEEP DIVENATURE AND AGRICULTURE22%of total SEA emissionsRepresents SEAs land-use change and forestr

264、y emissions736 MtCO2eEmissions(MtCO2e)CAGR(%)K/MCOVID impactSize of prize($B)158$165 million acquisition of Super Energys solar businessCME Solar secures$20 million from responsAbility climate fund in support of commercial and industrial solar projects New long-term strategy for environmental protec

265、tion emphasizes renewablesIn 2023,amended its Renewable Energy Act to allow full foreign ownership of renewable energy(RE)projectsAlso established“Green Lanes”to expedite processes to obtain licenses and permitsRenewable energy industry landscapeIdeas contextVietnamPhilippinesRecent developmentsT&D

266、infrastructure expansionvPPAs and bilateral connectionsCaptive solar+Utility-scale solar/windFICGPotential wild cards to considerAccelerators to considerNew regulatory frameworks to ensure predictable investment environment:Facilitate coordinated efforts through credible and transparent power sector

267、 planning to ensure an attractive environment for investorsTransition finance to support power reform:Develop a climate framework to recognize the positive contribution of banks in taking on and transitioning brown assets to secure greater capital flow into power projectsClusters to create progress/

268、optionality:Foster a cohesive internal marketplace that gives renewable players the option to sell energy generated to corporations within industrial clusterClimate variability:RE sources like wind and solar depend on favorable weather conditions,which can be unpredictable and can affect energy reli

269、ability,unlike traditional sourcesOil market dynamics:A major drop in oil prices by major suppliers could disrupt the current cost parity dynamics favoring RE advancementGeopolitical influence:Balancing challenges related to potential protectionism and disruptions to energy trade,which can impact en

270、ergy stability and trade dynamics for interdependent neighboring states,is keyRenewable power is proven and is transforming grids in much of the world today,but penetration is limited in SEADiscrete opportunities exist even though scale adoption of solar and wind is limited by structural facts that

271、will take time to resolveDEEP DIVEENERGY59Utility-scale solar and wind energyNote:1)Investment potential is calculated based on additional revenue potential by 2030Potential ways to investCurrent state of playLevers to improve capital flowsTransition barriers to be addressedUtility-scale solar and w

272、ind investments hold substantial potential to generate electricity at a large scale and can be achieved through multiple stakeholders supportRooftop solar infrastructure generation via a combination of equity investment by developers and project financing by banks will allow businesses flexibility i

273、n their access to REDirect corporate purchase of RE from generators will provide a predictable revenue stream for project developers and drive growth in RE consumptionGreen fuel sourcesPolitical:Weak support for private market participation constrains investment opportunitiesInfrastructure:Slow appr

274、oval for grid upgrade projects leads to severe curtailment issuesBusiness:Limited incentives to transition from fossil plants create stranded costs for investorsContext:MGen acquired SPNEC through a$285 million investment to fund construction of 3.5 GW solar energy farm and 4.5 GWh battery projectCa

275、se Study:Meralco Powergen(MGen)acquisition of SP New Energy(SPNEC),Philippines Results:Acquisition aims to align with MGens RE goals to be coal-free before 2050Why it works:Joint venture with SPNEC enhances market credibility to scale with shared resources,funds,and co-sharing of risk,further suppor

276、ting expansion of RE projects that align with Renewable Portfolio Standards mandate for utility players to acquire specific percentage of supply from RE9049599432,05002,0004,0009%20186%2019-2%20208%2030EAssumes switch from fossil to renewables brings 75%reduction potential,with actual potential swit

277、ch-out to solar/wind in SEA at 20%18.1Emissions reduction potentialmidterm28%of total SEA emissionsRepresents SEAs power emissions943 MtCO2eEmissions(MtCO2e)CAGR(%)15%Utility large-scale generation of renewables is proven globally and has seen falling cost over the yearsHowever,roadblocks remain(e.g

278、.,grid congestion,slow permitting)and hinder SEAs ability to scale Progress in SEA has only been observed for selective projects;many stalled because of multiple factorsDEEP DIVEENERGYCSize of prize($B)160Transmission and distribution infrastructure expansionNote:1)Investment potential is calculated

279、 based on additional revenue potential by 2030Potential ways to investLevers to improve capital flowsTransition barriers to be addressedContext:National Power Transmission Corp.has received a$675 million loan for construction of a 500 kV transmission line to address grid congestion from rapid RE dev

280、elopment in recent yearsGreen fuel sourcesCase Study:Quang Trach-Pho Noi Transmission Line Project,VietnamResults:Aim to strengthen North-Central transmission grid capacity Why it works:Supportive government oversight to push project progress through investment and permitting approvalPolitical:Most

281、grid infrastructure is state-owned leading to limited interest from private developers to invest in grid upgrade projectsInfrastructure:Slow approval for grid upgrade projects leads to severe curtailment issuesBusiness:Continued fossil fuel subsidy leads to artificial prices that hinder REs competit

282、iveness Private participation via Build,Own,Operate,Transfer(BOOT)model for a specific duration before transferring back to the government to bridge financing gap with private capital and scale investment in gridsPrivate participation via long-term concession model to manage and operate existing tra

283、nsmission assets and oversee grid expansion in area of operation brings potential to attract more private investment 11.29049599432,05002,0004,0009%20186%2019-2%20208%2030EEmissions reduction potentialmidterm28%of total SEA emissionsRepresents SEAs power emissions943 MtCO2eEmissions(MtCO2e)CAGR(%)5%

284、Current state of playExpansion of energy T&D networks through alternate partnership model is crucial to enhance the efficiency and reliability of the power grid,which currently causes severe curtailment issues“No regrets”move to find development and financing models with private sector while market

285、reform is consideredAssumes grid upgrade could increase power capacity investment by up to 30%Assumes switch brings 75%reduction potential,with only 20%potential to solar/wind in SEADEEP DIVEENERGYFSize of prize($B)161Captive solar+Note:1)Investment potential is calculated based on additional revenu

286、e potential by 2030Potential ways to investLevers to improve capital flowsTransition barriers to be addressedPriority investments around microgrids with storage systems in industrial parks to support localized,self-sufficient energy solution to enhance reliability;needs new policy frameHybrid solar

287、projects with storage system allow flexibility for optimization of energy usage and contribute to bankability of the projectReuse of solar panels that are meant to be disposed of to extend life span and reduce cost of installation in developing marketsGreen fuel sourcesPolitical:Lack of net metering

288、 and other solutions to resell self-generated power back to grid undermine viability business caseContext:Banpu NEXT expanded its RE generation capacity and acquired Durapower for$70 million to scale its battery-based clean energy opportunities Case Study:Banpu acquisition of DurapowerResults:Implem

289、ent 1 MWh BESS at a captive solar-powered mining site in IndonesiaWhy it works:Extension of storage offerings to commercial and industrial operators improves business competitiveness and supports growthCurrent state of play9049599432,05002,0004,0009%20186%2019-2%20208%2030EAssumes potential for 6%ad

290、ditional RE usage with decentralized system and 2%additional from use of stored REEmissions reduction potentialmidterm28%of total SEA emissionsRepresents SEAs power emissions943 MtCO2eEmissions(MtCO2e)CAGR(%)8%4.3Captive self-generation of solar with storage has worked in high renewables penetration

291、 markets globallyThe main potential in SEA is confined to only countries that require backfill of curtailment,backup power for data centers,and markets with emerging demandDEEP DIVEENERGYGSize of prize($B)162Virtual power agreements and interconnectionsNote:1)Investment potential is calculated based

292、 on additional revenue potential by 2030Potential ways to investLevers to improve capital flowsTransition barriers to be addressedGreen fuel sourcesPolitical:Inadequate government-to-government support and protectionist stance of countries will limit the opportunity to inject additional capital that

293、 can be crucial for RE expansionContext:With the launch of a National Energy Transition Roadmap and lift of Malaysias RE export ban,it provides opportunity to provide additional revenue above existing market rates with neighboring countries like Singapore;Memorandum of Understanding signed between t

294、he two countries to explore infrastructure development of a second interconnectorCase Study:Singapore-Malaysia cross-border arrangementResults:Potential to boost investment and for Sarawak to export 1 GW of hydropowerWhy it works:Allows market-driven development with regional funding sources;green-l

295、it self-contained RE systems enable private participation9049599432,05002,0004,0009%20186%2019-2%20208%2030EEmissions reduction potentialmidterm28%of total SEA emissionsRepresents SEAs power emissions943 MtCO2eEmissions(MtCO2e)CAGR(%)6%Current state of playAssumes vPPA could increase power capacity

296、investment by up to 40%Assumes switch brings 75%reduction potential,with only 20%potential to solar/wind in SEA18.1Corporate vPPA is a financial contract that allows trading of RE across borders without physical delivery;buyers typically receive Renewable Energy Certificates which allow them to make

297、 claimsConnecting developers and offtakers in countries with limited RE capacity can bring stable new revenue stream DEEP DIVEENERGYEnergy companies participation in regional electricity trade to create demand,facilitate sale and purchase of electricity,and enhance power grid connectivity in differe

298、nt regionsPublic infrastructure development to enhance the capacity and reliability of the power grid for smooth transmission flow between regionsISize of prize($B)1Regulatory:Corporates who have signed up to RE100 initiatives can only accept cross border VPPAs from within the same market boundary63

299、Transport industry landscape Notes:1)Civil Aviation Authority of SingaporeIdeas contextAgricultural waste stream for biofuels productionElectric passenger vehicles(EVs)and charging infrastructureLJRecent developmentsDEEP DIVETRANSPORTIn 2022,Thailand initiated a subsidy program for EVs,ranging from$

300、2,000 to$4,000 per unit and provided tax incentives for EVsIn 2022,BYD invested$500 million to set up a new facility in Thailand for passenger car productionEV registration has increased 380%in 2023 compared to 2022ThailandPotential wild cards to considerAccelerators to considerSubsidy to stimulate

301、financing:Funding from government to prioritize purchase and installation of EV/biofuel production infrastructure in accordance with commitments to encourage regional investmentsStandards through gradual bans to support transition:Strengthen business case to attract more capital flow into power and

302、charging infrastructure development to alleviate range concerns and promote widespread EV adoptionGlobal market dynamic:Rapid growth in Chinese EV and biofuels industry and its relevant export strategies increases competition,which can impact profitability and potentially strain production capacity

303、utilizationMinerals supply chain security:Accelerated electrification of vehicles means demand for lithium and other metals is growing at a fast pace to support battery production,heightened supply chain risk given that production of critical minerals is dominated by a select number of countriesIn 2

304、023,Indonesia Investment Authority initiated a special EV Ecosystem Fund with Chinese battery supplier Contemporary Amperex Technology,with$15 billion in deals signed since 2020 to support the battery and EV industryIndonesiaIn 2023,SIA,CAAS1,and GenZero completed a 20-month pilot that tested the po

305、tential of SAF creditsSingapore64Electric passenger vehicles and charging infrastructureNote:1)Investment potential is calculated based on additional revenue potential by 2030Potential ways to investLevers to improve capital flowsTransition barriers to be addressedGreener transport modePursue advanc

306、ements in battery technologies to improve vehicle performance,increase energy efficiency,and reduce costs to lower barriers for switching to EVExpand charging network and battery swapping system to support widespread adoption of EV and address consumers range anxiety Localize production facilities t

307、o develop EV manufacturing capability in the region and reduce cost to purchase an EV locallyBusiness model:High up-front costs to switchInfrastructure:Slow installation of charging infrastructure and transmission capacityCustomer:Concerns and resistance from operational change and power price volat

308、ilityContext:90%of personal use vehicles in Vietnam are two-wheelers,and EVs are at purchase price parity with ICE vehicles.VinFast,the largest EV manufacturer in Vietnam,invested$213 million(Q4 2023,CapEx)to develop new EV models and charging stations to scale infrastructure development at speedCas

309、e study:VinFast Group,VietnamWhy it works:Government reduced excise tax for EVs to 2%3%(from current 15%)and issued an exemption on EV registration fees in 2022,bringing certainty to consumers with preferential financing schemes to support EV growthCurrent state of playAssumes switch from internal c

310、ombustion engine vehicles to avoid fossil fuel usage Emissions reduction potentialmidterm10%of total SEA emissionsRepresents SEAs transportation emissions for light-duty vehicles 358 MtCO2e66%30.34824714811,98002,0001%2018-2%20192%20206%2030EElectrification of vehicles,especially two-and three-wheel

311、ers,which are the most common form of personal transport in SEA and require much less involved charging(e.g.,largely in private homes)Potential charging solutions like network of fast charging stations and battery swapping networkEmissions(MtCO2e)CAGR(%)DEEP DIVETRANSPORTJSize of prize($B)165Size of

312、 prize($B)1Agricultural waste stream for biofuels productionNotes:1)Investment potential is calculated based on additional revenue potential by 2030;2)Civil Aviation Authority of Singapore;3)Roundtable on Sustainable Biomaterials Potential ways to investLevers to improve capital flowsTransition barr

313、iers to be addressedGreener transport modePhysical:Feedstocks not available at scaleBusiness:Difficulty accessing substantial funding to build out system across geographiesInfrastructure:Absence of global frameworkfor book-and-claim system makes funding riskyCurrent state of playContext:Nov.2023 SIA

314、,CAAS2,and GenZero completed a 20-month pilot that tested the potential of SAF creditsCase study:Singapore Airlines(SIA)SAF pilotResults:SIA generated 1,000 book-and-claim SAF credits for sale to corporations and air cargo companies,providing a successful use case in a voluntary market that is still

315、 nascentWhy it works:Partnership reduces market risk and cost premiums;collaboration with global RSB3 Book&Claim System tested the potential of SAF credit market in SEAAssumes 2G biofuels offer emissions reduction typically 70%90%compared to 35%50%for 1G42.0Emissions reduction potentialmidterm8%of t

316、otal SEA emissionsRepresents SEAs air transportation and bunker fuels emissionsEmissions(MtCO2e)CAGR(%)80%Use and convert agricultural waste streams into second generation(2G)biofuels for use as sustainable aviation fuels(SAF)and low-carbon transition fuels in maritimeSEA has an abundance of feedsto

317、ck from agricultural waste streams33232727544205002%2018-1%2019-16%20205%2030E275 MtCO2eRethink agricultural waste collection infrastructure as agricultural waste is collected at mill level(with huge expansion potential in Malaysian and Indonesian agriculture market)to be reprocessed into biofuels f

318、or transport industryAggregate medium and small-sized mills via a joint venture or merger and acquisition to gain scale in the current fragmented market and accelerate scaling potential of agricultural waste processingDEEP DIVETRANSPORTL66Buildings industry landscapePotential wild cards to consider$

319、270 million investment by GDS and four mandated lead arrangers in Nusajaya Tech Park data center$250 million investment by YTL Power International,etc.in Kulai data centerEnergy Efficiency and Conservation Act mandates audits and energy-saving measures for companies consuming over 21,600 GJMalaysiaR

320、ecent developmentsDEEP DIVEBUILDINGS$400 million investment by Singtel in PT TeknologiData InfrastrukturAuthority raised minimum energy performance requirements,requiring new buildings to be 50%more energy efficient than 2005 level SingaporeIdeas contextEnergy efficiency improvements for buildingsEn

321、ergy efficiency improvements for data centersBAAccelerators to considerStandards to drive upgrades:Enforce green building codes with mandatory efficiency guidelines to promote best practicesPartnership through integrated parks to unlock capital flow:Collaboration with major industry players can stim

322、ulate demand,promote adoption of scalable technological solutions,and facilitate financing flow by establishing clear and long-term purchase agreementsData localization potential:Regulatory shifts that mandate storage and processing of data within national borders can impact the location,design,and

323、operational landscape of data centersDisruptive new technologies:The readiness of existing buildings to seamlessly integrate new technologies becomes crucial as the industry evolves with new advancements,such as immersion cooling and server densification67Energy efficiency improvements for data cent

324、ers(DCs)Notes:1)Investment potential is calculated based on additional revenue potential by 2030Potential ways to investLevers to improve capital flowsTransition barriers to be addressedEnergy efficient buildingsInvest in DC above Tier 3 certification to ensure compliance with standards to increase

325、reliability,uptime,and energy optimization,directly promoting improved energy efficiency Infrastructure ownership to fund construction of new DC capacity and encourage adoption of energy-efficient technologies within operations Leverage project financing for hybrid DC development with developers and

326、 operators to facilitate cost sharing,resource pooling,and expertise exchange to optimize energy consumption through collaborationBusiness model:Substantial cost required to retrofitTechnology:Limited clear green data center guidelines can hinder new technology adoptionCustomer:Lack of confidence in

327、 technologys benefit given limited proof pointsContext:Chinese developer and operator GDS raised$270 million green loan in Malaysia with four mandated lead arrangers,including Standard Chartered as Joint Green Loan Coordinator to develop a 70 MW DC that adopts liquid-cooling technology to improve ov

328、erall energy efficiency Case study:Nusajaya Tech Park Data CenterResults:Aim to complete Phase 1 of project within 14-month time frameWhy it works:Strategic position of DCs within the SIJORI region(Singapore,Johor,and Riau Islands in Indonesia)to match digitalization demand;green design attestation

329、with GDS receiving LEED Gold Certification for several of its overseas DCs;industrial community of MNCs3 and enterprises within parkCurrent state of playAssumes latest technology for efficient building design(e.g.,insulation,air tightness,and solar shading)brings an average 15%energy savingsEmission

330、s reduction potentialmidterm3%of total SEA emissionsRepresents a portion of SEAs building and electricity/heat emissions107 MtCO2e15%5.8DCs are one of the fastest-growing sources of emissions and forecasted to grow 11%CAGR in Asia-PacificImplement energy-efficient technology and measures like effici

331、ent cooling and building automation systems to reduce energy usage while concurrently increasing clean energy power mix805008%20187%2019-3%202016%2030EEmissions(MtCO2e)CAGR(%)DEEP DIVEBUILDINGSASize of prize($B)168Energy efficiency improvements for buildingsNotes:1)Investment potential is

332、 calculated based on additional revenue potential by 2030;2)Environmental,social,and governancePotential ways to investCurrent state of playLevers to improve capital flowsTransition barriers to be addressedEnergy efficient buildingsInvest in buildings above industry energy efficiency standards to en

333、sure compliance with standards to increase reliability,availability,and energy optimization,directly promoting improved energy efficiencyEncourage real estate ownership to support construction of new buildings and integration of energy-efficient technologies and practicesLeverage project financing for collaborative developments with developers and operators to facilitate cost sharing,resource pool