Singapore advances climate efforts as Southeast Asia green economy faces realisation gap

Grid delays, cancelled projects, and weak infrastructure are slowing regional green energy progress.

Singapore is advancing its climate targets as Southeast Asia faces a gap between announced and deployed green capital expenditure across the region's power and electric vehicles (EV) value chain, according to the Southeast Asia’s Green Economy Report 2026 by Bain & Company and Standard Chartered.

The report said that the country remains committed to achieving net zero emissions by 2050 and to reducing greenhouse gas emissions to 60 million tonnes of carbon dioxide equivalent by 2030. It has a Long-Term Low-Emissions Development Strategy in place, with a second Nationally Determined Contribution expected in 2025.

Per capita emissions were 12.5 tonnes in 2024–25, up 3.9% from the previous year, the report said. The share of renewable energy also remained unchanged at about 5%.

Electric vehicle adoption increased. EVs accounted for about 46% of new four-wheel vehicle sales in 2025, up from 34% in 2024.

Singapore has introduced mandatory emissions reporting for listed companies and is continuing to develop its carbon tax framework.

The report also noted participation in international carbon credit mechanisms under Article 6 of the Paris Agreement.

It added that SAFCo has been established to support the purchase of sustainable aviation fuel through a levy on departing flights.

Bain recommended continued increases in carbon taxes towards $50 to $80 per tonne by 2030, a gradual reduction in transitional allowances for emissions-intensive industries, and progress on regional power imports such as the Indonesia–Singapore power corridor.

Across Southeast Asia, the green economy has grown to about US$290b and is projected to reach $551b (US$430b) by 2030, the report said.

However, it identified a realisation gap of more than 35% between announced and deployed green capex across the region’s power and EV chains.

Of approximately $691b (US$540b) in announced green capex through 2030, around $403b (US$315b) is on a credible path to deployment.

The report noted that capital allocation is influenced by commercial demand, energy security, policy, and infrastructure readiness.

Between 2021 and 2025, the region deployed about $51.2b (US$40b) a year in green investments, with most flowing into power and grid systems and EV-related industries.

About 50 to 60% of renewable energy projects in Vietnam, Thailand and Indonesia were cancelled over the period, whilst 40 to 50% of nickel and battery projects also did not proceed.

It added that investment in transmission and distribution networks fell 3% between 2015 and 2025, even as electricity demand grew about 5% a year.

Demand from data centres, electric vehicles and industrial zones is expected to add more than 100 terawatt-hours of electricity use over the next few years, requiring more than $256b (US$200b) in investment.

About 90% of data centre operators cited grid connection delays as a key constraint, the report said.

Despite strong EV sales growth, Southeast Asia captures a small share of value.

Four ASEAN countries are amongst the top 15 global EV markets, but about 70% of EV value flows outside the region.

The region accounts for less than 2% of global EV and battery production.

The report said investment decisions between 2026 and 2028 will be critical in determining whether the region moves up the value chain or remains focused on assembly and consumption.

It estimated that closing gaps in power, grid and EV systems could unlock an additional $102.4b (US$80b) in green investment by 2030.

Financing tools such as blended finance and transition credits are useful, but require supportive policy, infrastructure and bankable projects to be effective, it added.