Malaysia and Japan to lead ASEAN’s next energy transition chapter

As Malaysia prepares to take over the ASEAN Chair in 2025, it has announced a strategic clean energy initiative in partnership with Japan. The two countries plan to establish a cross-sectoral energy cooperation center in Malaysia, designed to support regional technology integration and accelerate decarbonization goals across Southeast Asia.

The proposed center reflects Malaysia’s intent to solidify its leadership in ASEAN’s energy transition efforts. With mounting pressure to meet net-zero targets and decarbonize key sectors, the region requires coordinated strategies that blend policy reform, financial investment, and advanced technology.

Prime Minister Anwar Ibrahim outlined this proposal during a recent international summit, highlighting it as a milestone in Malaysia’s broader commitment to sustainable development. The center is expected to act as a platform for knowledge exchange and pilot initiatives, with Japan offering technical and research backing. It also represents an extension of Japan’s ambitions in Asia to strengthen clean energy infrastructure while supporting its economic partners.

The Asia Zero Emission Community and Japan’s regional ambitions

At the heart of this collaboration lies the Asia Zero Emission Community (AZEC), a platform developed by Japan to foster multilateral cooperation on carbon neutrality. Comprising 11 partner countries, AZEC supports the alignment of national policies, infrastructure integration, and low-emission technologies throughout Asia.

During the most recent AZEC ministerial gathering, Japan signed 70 memorandums of understanding on energy transition with partners in the region. These agreements focus on facilitating the development of hydrogen and ammonia markets, strengthening inter-regional power grids, and providing technical assistance for emissions reduction.

For ASEAN countries, Japan’s engagement via AZEC provides an external anchor to their climate agendas. Through this center, Malaysia is positioned to serve as a nexus of these interactions, leveraging Japan’s support to build scalable clean energy models that other ASEAN members can adopt.

Malaysia’s National Energy Transition Roadmap in action

Launched in July 2023, Malaysia’s National Energy Transition Roadmap outlines a multiphase transformation plan aimed at reducing carbon emissions, stimulating investment, and future-proofing its energy infrastructure. The roadmap is central to the proposed collaboration with Japan.

Phase 1 of the roadmap introduced 10 flagship catalytic projects, targeting investments from both local and international players. Collectively, these initiatives are expected to cut annual emissions by more than 10 million metric tons and create thousands of jobs. By aligning the center’s mission with these priorities, Malaysia can offer partners a clear investment narrative and a regulatory environment conducive to clean technology deployment.

The roadmap’s design covers a range of focus areas, including hydrogen, green mobility, energy efficiency, and digitalization. Its flexible structure allows for cross-border engagement, which makes it highly compatible with regional integration plans such as the ASEAN Power Grid, a project aimed at connecting national grids to promote electricity sharing across borders.

Opportunities for technology, carbon capture, and renewables

Among the most promising aspects of the Malaysia-Japan energy center are its potential technology streams. Japan has consistently led global innovation in hydrogen fuel cells, ammonia co-firing, and carbon capture, utilization, and storage. These technologies are vital to helping ASEAN economies decarbonize hard-to-abate sectors.

Malaysia has already signaled its intent to lead in sustainable aviation fuel, with production scheduled to begin in 2027 at a volume of one million metric tons annually. With Japan’s collaboration, this production could benefit from process efficiencies and access to broader regional markets.

By integrating Japan’s technological expertise with Malaysia’s policy momentum and industrial base, the center could act as an incubator for next-generation energy solutions. This includes pilot projects in bioenergy, digital grid infrastructure, and energy storage systems.

For ASEAN, the center represents a tangible step toward achieving its collective sustainability objectives. It also aligns the bloc with global standards without compromising local development needs. The emphasis on regional energy hubs, facilitated by international partners, could be replicated in other domains like mobility, manufacturing, or carbon trading.

Sources
Energy Monitor