Unlocking Southeast Asia’s Clean Energy Potential

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From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Blue Bag Daybreak Europe Podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts. This is Dana Perkins and you're listening to Switched On. The podcast brought to you by B&F. South of China, east of India, north of Australia is the vast region referred to as Southeast Asia comprised of 11 countries where an abundance of natural resources and manufacturing capacity can be found. It's important to supply chains around the world. However, recently, tariffs on goods destined for the United States, including clean energy equipment have been impacted and several countries in the region are reacting. Closer to home within Southeast Asia, a transformation is taking place, with high electric vehicle adoption and supportive clean energy policies. To tell us more about Southeast Asia, I'm joined by Shantanu Jaiswal, who heads B&F's India and Southeast Asia research. Alongside analyst Felix Kossessi, they draw from the recent research notes titled "US Climate Fund withdrawal in Parals, Indonesia's Transition" and "South East Asia in Short." Energy storage, net zero push, which B&F clients can find at B&F Go on the Bloomberg terminal or on B&F.com. Alright, let's get to talking about Southeast Asia. Shantanu, thank you very much for joining today. Hey, Jena, thanks for inviting me. And Felix, great having you on the show as well. Thanks for inviting me. So we're going to have a conversation today about Southeast Asia as a region, but of course every region is comprised of individual countries and subregions that have their own fascinating story to tell. And we at B&F are always trying to find opportunities as the world is changing. And certainly when we think about a lot of the industries covered at B&F, we're thinking about global trade, we're thinking about manufacturing, supply chains and everything actually across the value chain for the energy transition. And there are a number of countries here that are either changing the way regulations work and creating different opportunities for investment or maybe particularly blessed with different natural resources, which are really critical for the energy transition. So let's get into what each of these countries, we're not going to have time for all of them, but what some of the countries in Southeast Asia really have to offer for the future of the transition. So let's start with definitions. There are 11 countries broadly considered as Southeast Asia. Can we go through and just make sure everyone is in agreement that we're talking about the same set of countries. What are they? And thanks for starting off with that very important question and I say that because when I started looking at Southeast Asia when I started governing Southeast Asia, it was very difficult for me to understand their region. Because before I started working in the region, I always thought of it as one coherent block and really didn't understand the local nuances. But if you look at Southeast Asia, there are 11 countries in the region. The population of this entire region is about 700 million. And if you just look at the breadth of the region, it is as big as Europe. It's a massive region, but we at BNAF, we try to focus mostly on six countries in the region and they are in the day, Asia, Malaysia, Philippines, Vietnam, Singapore and Thailand. If you look at all of these six countries, then I tried a lot, but there is no one way to categorize these countries into different buckets. What usually needs to be done is to apply different lenses and then see these countries from the lens of language, geography, natural resources, economic output, politics, etc. All of these countries, they do have some common attributes, but they also compete with themselves. The region is actually laden with natural resources, but it spread out across various countries. There are countries which are rich in oil and gas deposits. There are countries which are rich in coal deposits. Then there are countries which have different renewable energy sources distributed amongst them. While they are between the tropics and solar is definitely something which is common to all the countries, but then there are wind resources which are very small pockets in Vietnam or Philippines. So, I mean, what I'm hearing from you is there are sort of two conversations that we're going to have, which have to do first of all with how countries are investing in their own domestic energy supply. In many respects adopting best available technologies and really thinking about a really interesting grid that might be much more diverse than other parts of the world. On the other side, there are the natural resources that exist, and as I referenced at the very beginning of the show, things that we need for other parts of the energy transition and will ultimately be exported to places all over the world. Can you talk about some of the natural resources that are so critical that are found in this part of the world? So, the region is actually quite blessed with natural resources. It includes oil, gas, coal, copper, gold, nickel, aluminum, titanium, you just name it. Starting with Malaysia, for example, it is one of the biggest producers of natural gas. We have countries which are also producing coal in big quantities such as Indonesia. It is also the country that houses 50% of the world's liquor reserves, and in addition to that, it also has significant quantities of the water copper and boxite. Whereas Vietnam and Myanmar, they possess a big chunk of the world's rare earth materials. So, we did a show last year where we were talking about how the United States had raised tariffs on solar imports. And there are a number of countries in Southeast Asia that are really involved in the solar manufacturing and parts of the supply chain. So, what I want to understand is beyond what's happened most recently regarding increases in tariffs for various countries all over the world, how of those that were part of 2023 and the first half of 2024, how of those tariffs impacted solar in that region, what markets are they looking at? Last year, the US Department of Commerce introduced some preliminary determinations for anti-dumping and counter-village entities in the region. If you look at the total imports of solar cells and modules in 2023 and in 2024, then about 80% of all of these were exported from four countries in Southeast Asia, Cambodia, Thailand, Vietnam and Malaysia. And the tariffs which were introduced, they ranged between 15% to about 60% and they have had quite a bit of an impact over here. So, some Chinese manufacturers that we know of in these four countries, they have cut down their production and opened facilities in Indonesia and Laos which do not have a tariff right now. In a way, what manufacturers are doing if they are trying to dodge tariffs from one country and moving out to other, it's a game of whack-mole, I think they're trying to play over here. What do you also see as that battery might make us? They might also want to follow what solar manufacturers are doing and try to dodge their tariffs and move their manufacturing location to countries which are currently except for it. Okay, so bringing us up to speed with what's happening then right now, there has been a lot of discussion regarding tariffs and it's changing almost daily at the moment. But when it comes to the US with cuts in US funding overseas and with raising tariffs for various countries, how much of an impact has this had on some of the countries in Southeast Asia? So far, we think the Trump administration has not targeted any particular Southeast Asian countries specifically but as you've rightly pointed out there's a huge element of uncertainty here going on. We do know that President Trump quite dislikes trade deficits with the United States and if we look at the top 20 countries with whom the US has a trade deficit, there are actually five Southeast Asian countries on the top 20 list, with Vietnam in particular sitting on number four with the deficit of about $100 billion as of 2023. Generally, Southeast Asian governments are cautious now and adopting a weight and sea approach. Now with regards to the cuts in overseas funding, the most tangible impact for Southeast Asia so far is definitely the US departure from Jet-P Indonesia and Vietnam. Jet-P, or just Energy Transition Partnership, is a program that were meant to mobilize roughly 21 and 15 billion dollars for Indonesia and Vietnam respectively to accelerate the energy transition in those countries. Now developed countries commit roughly half of the money in the form of grants. 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Sehingga pas, berapa yang menangkirkan kecil 5-7 tahun Indonesia juga ada kecil yang terlalu bersuai ini melihat kecil menerlukan kecil lain dan apa yang menerlukan kecil Indonesia adalah kecil kecil lain yang menerlukan kecil di percayaan untuk membuat kecil, kecil dan membuat kecil kecil lain juga di dalam Indonesia dan kecil lain bisa menangkirkan jadi bahwa Indonesia lebih menangkirkan kecil dari kecil lain satu yang bagus untuk ini adalah Indonesia tidak lebih baik mengenai kecil lain tapi sekarang adalah membuat kecil lain begini membuat kecil yang terlalu dan kecil yang menangkirkan kecil dan kita sudah menangkirkan banyak investasi di kecil dari China, South Korea mereka membuat kecil lain elektrik, kecil lain dan apa yang Indonesia yang menerlukan kecil lain adalah kemudian begini untuk membuat kecil lain yang bisa membuat kecil elektrik, kecil dan kecil menggunakan kecil lain oke, jadi mari kita sekarang ke Vietnam yang yang kecil yang menerlukan banyak kecil lain kecil lain kenapa itu berapa di dalam kecil lain dan apa yang paling penting yang penting di Vietnam di masa itu? kecil yang penting di Vietnam sekarang adalah kecil polisif di kecil lain yang lebih kecil lain ini adalah kecil yang penting di kecil lain tapi membuat kecil lain kecil lain yang penting di Vietnam tapi membuat kecil lain tapi membuat kecil lain dengan banyak kecil lain dan ini adalah satu kecil lain di Southeast Asia untuk memiliki polisif yang mengenai investasi dari kecil lain kecil lain yang penting di Vietnam di dalam kecil lain di Vietnam semua kecil lain juga begini untuk mengenai kecil lain di kecil lain yang main yang penting di kecil lain yang penting di kecil lain untuk hanya untuk mengenai kecil lain jadi kecil lain kecil lain kecil lain kecil lain kecil lain kecil lain kecil lain dan kecil lain dan kecil lain dan kecil lain kenapa itu kecil lain di dalam kecil lain di dalam kecil lain di dalam kecil lain di dalam kecil lain di dalam kecil lain di dalam kecil lain dan ada beberapa kecil lain di dalam kecil lain di dalam kecil lain di dalam kecil lain danECH ater yang berguna di Amerika menjadi kereta 3, dan berguna di kembali. araон dia mengadaannya, lihat resنarakatнulsive nya sangka dariahren, dan kemudian dia dihospati dariizeran dana distana. oh 근데 Kocangnya, <i>Besiat Plesinya sangat sedang life Sai Lang Selepar ouais body dan Smok nichtnya hilai Cara, </i> hentikan ke poder pas fitur yang men eternal rói他說jえる dari Mas Long tapi bagian乾ah ini hargaный orang pertama станов salah soal cuma lebih keluarga iniνεber. bos Kongnya dengan sukses malam. milik-�is trappednya juga. futurnya ini Memulis teman Somali Hsia jadi orang ini sangat berp看到 ini zmasih dan mempunyai kemungkinan dari beberapa negara. Kuala Singapura mempunyai kemungkinan dari Malaysia, tapi itu sangat kecil dengan kemungkinan megawatt, tapi kita akan melihat kemungkinan kemungkinan kekanan kata, di seluruhnya, sangat kecil, yang terbaik di Indonesia, 315 kemungkinan megawatt, bisa terbuka di dalam kelihatan. jadi apa yang sangat terjadi tentang ini adalah, Singapura melihat kemungkinan Netsero Target, dihomodan dengan lain, di seluruhnya, di dalam kelihatan Netsero Target, dan itu terbaik dari bahwa di mana yang mungkin terjadi, jadi kelihatan kelihatan kata, tidak kelihatan, di seluruhnya, anda melihat mereka di seluruhnya. Saya rasa, idea itu akan menjadi kelihatan baru yang terbaik di dalam kelihatan, itu bisa terbuka di lelaki atau kelihatan kelihatan Netsero Target dari negara-negara, karena juga ada target untuk Netsero dari 2050. Jadi mereka perlu buat sesuatu. Jadi, while kita melihat kelihatan, semua kata-kata ini sangat berbeda, dan mereka ada berbeda di kelihatan, di kelihatan, di kelihatan, dan di dalam kelihatan, jadi kita akan berbual dengan kelihatan. Saya rasa kita lihat itu, di dalam kelihatan kata-kata, yang kita sudah memiliki kelihatan kata-kata, saya akan sekarang mencari Anda untuk memiliki kelihatan ke South East Asia, seperti region. Jadi, kalau kita mencari kelihatan asian, di dalam kelihatan kata-kata, jadi kelihatan kata-kata, jadi ini adalah Indonesia, Vietnam, Laos Brunei, Thailand, Myanmar, Philippines, Cambodia, Singapore, Malaysia, ada keseluruhan di masa di dalam kelihatan, dan memiliki kelihatan yang akan memiliki kelihatan yang terbuka di negara ini, di mana itu yang terbuka di dalam kelihatan, dan mana mungkin kita melihat kelihatan, yang sebenarnya memiliki kelihatan ini, seperti sesuatu yang berbual. Jadi, kata-kata, memiliki kelihatan asian, di kelihatan, South East Asia, atau asian region, bukan New. Dan kelihatan, kalau kita melihat kelihatan, sekarang mereka akan melihat kelihatan di South East Asia, mereka memiliki kelihatan asian, kelihatan asian region, di dalam 1990, tapi kelihatan yang terbuka di dalam kelihatan, di masa yang terbuka di dalam kelihatan, itu adalah bagus idea, dan juga mereka memiliki kelihatan, tapi mungkin karena kelihatan kelihatan, kelihatan, kelihatan, di dalam kelihatan, terbuka di dalam kelihatan, tapi kelihatan, kita melihat kelihatan yang terbuka di dalam kelihatan, karena kelihatan, kelihatan, terbuka lebih cepat dan kelihatan, kelihatan yang terbuka di dalam kelihatan, bisa membantu mereka di dalam kelihatan, terbuka di dalam kelihatan, seperti kelihatan, kelihatan, industri, dan menang. Dan Singapore adalah di dalam kelihatan, karena kelihatan, dengan beberapa resursi, itu memiliki kelihatan, semua semua, dan jadi kenapa tidak kelihatan, di dalam kelihatan, di dalam kelihatan, kelihatan, di dalam kelihatan, dan di dalam kelihatan, akan sangat penting di dalam kelihatan, di dalam kelihatan, dan ini akan menggunakan netokas dan kelihatan, dan juga akan membantu kelihatan, di dalam kelihatan, di dalam kelihatan, di dalam kelihatan, bukan di dalam kelihatan, tapi di dalam kelihatan, ini adalah kelihatan, yang berguna, tapi mencoba, untuk mencoba, bahwa, kelihatan yang menerima, masih sangat banyak, yang terbuka di dalam kelihatan, [MENGENI] there's a lot to watch and as we see global supply chains maintain this level of dynamism. I'm sure Southeast Asia will stay front and center. Thank you for sharing your thoughts on your research and for taking us around to the region and telling us some of the most interesting things happening. Shantanu Felix, thank you so much for joining the show today. Well thanks, and it was great to be on the show as well. Thank you. Thanks, Lin-Eddie. It was fun. Today's episode of Switched On was produced by Cam Gray with production assistance from Kamala Shelling. Bloomberg NEF is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute nor should it be construed as investment advice, investment recommendations, or a recommendation as to an investment or other strategy. Bloomberg NEF should not be considered as information sufficient upon which to base an investment decision. Neither Bloomberg Finance LP nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the information contained in this recording, and any liability as a result of this recording is expressly declined. The news doesn't stop on the weekends. Context changes constantly, and now Bloomberg is the place to stay on top of it all. 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