Clean energy in APAC: balancing net zero, gas and nuclear

As global energy markets continue their net zero journey, Asia Pacific is at a crucial junction. The recent Singapore International Energy Week (SIEW) 2025 was a reflection of the great momentum for the energy transition the region has generated and the opportunities lying ahead.

However, it also underlined the geopolitical, investment, regulatory and innovation challenges APAC needs to master to both secure its energy security and successfully navigate decarbonization.

Asia Pacific in the global race to net-zero

Southeast Asia alone is projected to drive a quarter of global energy growth by 2035, fueled by economic and population growth, and expansion in manufacturing, cloud computing and AI.

Many countries are making significant investments in renewable energies in response. In Southeast Asia, clean energy is set to meet more than 35% of demand growth to 2035, driven by a rapid expansion of solar PV and wind.

As it does, gas will also have a key role, according to Takehiko Kikuchi, Chief Regional Officer, Asia Pacific & India, at Mitsubishi Heavy Industries. “Gas will be an important bridge in Asia’s energy transition as it provides reliable and affordable low-carbon power by helping to cut emissions in comparison to coal and keeping the grid stable when renewable energy is not available,” he explained.

“MHI is supporting this transition with efficient gas turbine technology, and our GTCC systems offer the highest thermal efficiency available today. Replacing a coal-fired power plant with a GTCC power plant can reduce CO₂ emissions by about 65%.”

Natural gas and APAC’s energy transition

There is a growing understanding of the continued role of natural gas as a transition fuel and a pragmatic solution to skyrocketing demand. Several countries are already boosting production levels to position themselves as regional natural gas hubs.

“We’re looking at a realistic energy transition these days. A couple of years ago, thermal power generation was essentially seen as decreasing relative to all the renewables coming in. We're now realizing that that's not really the case. Renewables and gas are truly very complementary and can support each other to become an affordable and sustainable energy mix,” Takao Tsukui, President and CEO, Mitsubishi Power, a power solutions brand of Mitsubishi Heavy Industries (MHI), told CNBC.

Natural gas will balance out the intermittency of renewable output, Kikuchi added. Given that Asia Pacific is the world’s largest logistics market, he also stressed the growing importance of LNG bunkering and of bio-methane, a low-carbon drop-in fuel for the shipping industry.

Alongside gas, countries in APAC are looking to nuclear as another option for reliable power, including in Southeast Asia, which currently has no operational nuclear capacity. There is "renewed interest in the technology across the region, according to analyst Wood Mackenzie.

A role for CCUS in APAC

With natural gas stepping up to meet growing power needs in APAC’s thriving manufacturing, industrial and data center businesses, CO₂ capture and utilization (CCUS) is expected to expand rapidly.

After trailing behind expectations for many years, cumulative investment across the value chain — capturing, transporting and storing CO₂ — is forecast to reach $622 billion across the region by 2050. Japan is set to become the regional leader thanks to early investments and cross-border collaboration agreements with Singapore, Indonesia and Malaysia on transport and storage.

A seat at the table for low-carbon fuels

Along with CCUS, green fuels and feedstocks including hydrogen and ammonia are slated as major contributors to decarbonization.

Mitsubishi Power has conducted a series of successful tests using a mix of natural gas and hydrogen as fuel for power generation. At Mitsubishi Power’s validation facility at Takasago Hydrogen Park, tests with 100% hydrogen firing are also being conducted.  Mitsubishi Power’s Tsukui told CNBC, “For now, all investments in data centers are expected to be 100% natural gas. But in the future, that’s convertible to hydrogen. When the time comes and the supply chain is ready, data centers will be using hydrogen-fired gas turbines.”

MHI’s Kikuchi expects clean hydrogen to be mainly locally produced and consumed, due to the difficulties of storing and transporting hydrogen. Even so, APAC needs to focus on building out its regional infrastructure for clean hydrogen. Countries like Australia are positioning themselves as future hubs for producing both green hydrogen and ammonia, a derivative.

Ammonia is mainly used in the production of fertilizers today. However, it can also serve as a fuel in its own right — for example in shipping — or as a carrier for hydrogen, simplifying its storage and transport from where it is produced to where in the region it’s needed.

Strengthening regional collaboration 

APAC needs to play its cards right to maximize the opportunities the energy transition offers. The biggest challenge will be bringing a very diverse region closer together, strengthening collaboration and regional integration.

“No single company or country can tackle the energy trilemma alone. Truly sustainable solutions require a shared commitment to invest in growth, adopt new technologies and make the right decisions to move forward,” said Mitsubishi Power’s Tsukui at SIEW.

“By combining ambition with practicality and innovation with partnership, we can create an energy ecosystem that is inclusive and secure for generations to come.”