WHAT YOU NEED TO KNOW
  • U.S. President Donald Trump’s focus on energy dominance is reshaping the Indo-Pacific energy landscape, with heightened exposure to policy volatility and transactional negotiations. Governments will weigh deeper energy cooperation with Washington against the need to maintain resilience through diversified imports, especially for liquefied natural gas (LNG), renewables and critical minerals. They will look to accelerate regional energy interconnections to safeguard long-term energy security and decarbonization goals.
  • The U.S. critical minerals agreements with Australia, Japan and the Association of Southeast Asian Nations (ASEAN) member states mark a strategic push to secure clean-energy supply chains. One key implication for Asia’s energy and industrial policies is the development of a U.S.-anchored supply network that will redefine regional trade flows and investment incentives. These deals will prompt governments across the region to reassess sourcing strategies for battery, solar and hydrogen technologies while renewing focus on domestic mineral security, downstream investment and energy-transition manufacturing. Companies should expect to see intensified coordination between energy and industrial ministries as countries seek to balance strategic access, competitiveness and resilience.
ON THE HORIZON
  • The U.N. Climate Change Conference (COP30) in Belém, Brazil, delivered mixed but meaningful outcomes. Governments agreed to triple adaptation finance by 2035 and endorsed a new implementation accelerator focused on technology transfer, capacity building and climate resilience support for vulnerable countries. However, negotiators fell short of a binding road map to phase out fossil fuels, leaving mitigation progress largely to national policy. Looking ahead, Indonesia, Vietnam and India are expected to move forward with pragmatic transition strategies that protect energy security and industrial competitiveness. Rather than waiting on global mandates, they will rely on domestic tools including targeted financing, grid modernization and selective cross-border power trade to advance their 2030 targets.
  • Asian governments continue to prioritize LNG as a near-term anchor for energy security, grid reliability and renewable integration amid global fuel volatility. Japan and Korea are renegotiating long-term contracts to secure stable supply, while the Philippines and Vietnam are expanding regasification capacity to diversify away from coal. Renewed momentum in Alaskan LNG projects is drawing early interest from Asian utilities seeking flexible purchase options. LNG’s role in Asia’s power mix will remain robust, supported by new infrastructure, regional trade growth and evolving contract structures.

Sector Overview and Forecast


Macrotrend Monitor
Energy Transition Outlook

Asia’s energy transition is balancing energy security, industrial competitiveness and clean energy growth. Surging electricity demand driven by data centers and artificial intelligence (AI) is forcing governments to secure a reliable supply while advancing long-term decarbonization goals. Renewables are expanding, but uneven grid readiness, financing gaps and land constraints continue to slow integration, reinforcing short-term reliance on gas and limited switching from coal to gas.

Three dynamics will shape the regional outlook. First, grid and storage investment will be the main bottleneck. Countries with strong policy coordination, such as India and Japan, are leading with system upgrades and corporate clean power procurement. Second, cross-border electricity trade will expand as smaller markets such as Singapore and Thailand seek regional imports to meet clean demand. Third, industrial decarbonization will gain momentum through public funding and technology pilots in hydrogen; carbon capture, utilization and storage; and electrification. Carbon capture and storage development remains on policy agendas as a practical bridging technology, with Japan, Korea and Malaysia advancing pilot projects and carbon transport frameworks that could define ASEAN’s future for industrial carbon management without undermining energy reliability.

Emerging policies offer models for how to balance reliability with clean energy expansion. India’s grid-integration program marks a shift from capacity expansion to reliability, with new transmission corridors and storage tenders to stabilize more than 200 gigawatts of renewables by 2026. In Japan, new power-market rules now enable data centers and large corporates to sign long-term renewable power purchase agreements, accelerating private-sector clean-energy adoption across Asia.

Nuclear Energy Revival

Nuclear power is regaining momentum across the Indo-Pacific as a core component of energy security and decarbonization strategies. The U.S.-led push for a nuclear renaissance under President Trump is driving new investment interest and reshaping regional cooperation. The recent U.S.-Japan framework on nuclear collaboration, including next-generation and small modular reactors, anchors a broader strategy to expand reactor technology exports and financing partnerships across allied markets.

Japan’s decision to resume building new plants and restarting old ones, aiming for 20 percent of power generation from nuclear by 2040, underscores renewed policy confidence in the sector. Vietnam is following suit, amending its Atomic Energy Law in 2025 and reintegrating nuclear development into its Power Development Plan VIII, with the first plants targeted for 2030-2035.

Indo-Pacific governments are expected to intensify bilateral talks on nuclear technology sharing and financing. Countries with mature regulatory and safety frameworks, such as Japan and Korea, are positioned to lead in regional supply chains and project partnerships. Others, including emerging ASEAN markets, will look to leverage U.S. and Japanese support to close technology and financing gaps for nuclear energy.

Power Demand Amid Data Center and AI Growth

AI and data center expansion are transforming Asia’s energy landscape, reshaping power demand, grid investment and regional electricity trade. The U.S. Energy Information Administration projects data center power use to grow double digits annually through 2030, more than four times faster than overall electricity demand, with AI model training adding concentrated load in urban and industrial clusters. China maintains huge advantages in both clean energy manufacturing and AI but sees strains on transmission networks and regional power distribution, while U.S., Japanese, and Korean firms continue to lead in frontier AI-energy applications. Japan is advancing corporate renewable power purchase agreements to meet surging AI-related demand, a move expected to deepen Japan-ASEAN energy ties as regional power-import schemes expand. Singapore, limited by land and emissions caps, is piloting energy-efficient data centers and importing renewable electricity through the Laos-Thailand-Malaysia-Singapore connection — Southeast Asia’s first multilateral power-trade framework, which supplies up to 100 megawatts of renewable power to Singapore. Regionally, the AI-driven demand surge is forcing governments to adjust fuel mixes and grid strategies. For example, Vietnam’s national utility is developing hybrid solar-storage projects to meet peak load from industrial parks and data centers. Looking ahead, expect stronger policy coordination, more LNG-backed grid balancing and intensified competition for clean, reliable baseload power.

Subsector Highlight
Indo-Pacific Critical Mineral Strategy

The Indo-Pacific mineral landscape is moving rapidly from market talk to industrial policy. Recent U.S. mineral deals combine investment packages, supply-security frameworks and rare-earth cooperation, aiming to diversify supply away from China and expand allied processing capacity. Capital and technology will flow toward jurisdictions with stable regulations and export assurances. Policy terms and export rules will reshape negotiations and heighten competition with China-centric value chains. Geopolitical alignment will intensify, with countries adhering to U.S. frameworks gaining easier access to finance and markets, while others balance Chinese and Western offers.

Australia plays a critical role in U.S.-aligned mineral cooperation, anchoring new supply chain investments, rare-earth processing partnerships and defense-linked mineral flows. Japan is emerging as a close counterpart through its trade pact with Washington, coordinating on rare-earth refining and next-generation battery materials and reinforcing its role as both financier and technology provider. ASEAN countries are exploring bilateral U.S. cooperation with Vietnam as a secondary processing hub, the Philippines courting U.S. investment in nickel and cobalt mining and Indonesia negotiating to balance downstream policy with U.S. partnerships that respect domestic value-added ambitions. In addition to U.S.-led frameworks, Canada’s emerging role warrants closer attention. Ottawa’s efforts to elevate critical minerals as a Group of Seven priority, supported by deals with Japan and Korea, position Canada alongside Australia as key partners in building resilient, allied supply chains across the Indo-Pacific. These developments signal a gradual consolidation of a U.S.-anchored mineral bloc in the Indo-Pacific, reducing China’s processing dominance. A wave of memorandums, targeted financing and conditional investment offers is expected, as resource-rich Indo-Pacific states leverage competing suitors to extract higher local value, raising the stakes for supply chain diversification, project bankability and geopolitical alignment.

We will continue to keep you updated on developments in the energy, climate and resources (ECR) sector as they occur. If you have comments or questions, please contact BGA Director Chayamon “Amm” Srisongkram at csrisongkram@bowergroupasia.com.

Best regards,

BGA ECR Team

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Director

Amm is a service-driven professional who brings with her many years of consulting experience. Based in Bangkok, Amm first joined BGA as an analyst in BGA’s Thailand office before spending two years with the team in Washington D.C. In her current regional role, Amm provides policy support and helps clients foster engagements across BGA markets. Throughout her career, Amm has advised companies across multiple sectors, including fast-moving consumer goods, agriculture, energy and banking, and has supported firms in areas such as marketing, corporate governance and government relations. Prior to joining BGA, she was an account manager at Kantar, a consumer ... Read More