Executive summary

As demonstrated by the energy crisis resulting from the current conflict in the Middle East, the energy security challenge in ASEAN countries is intensifying as they experience growing energy demand, rising import exposure and more interconnected energy systems. Rapid economic growth, industrial development, urbanisation and rising living standards are driving strong increases in energy demand across Southeast Asia, up by almost 30% per capita over the last 10 years. At the same time, the region’s energy systems are more exposed to external fuel markets, strategic maritime routes, climate-related risks and the supply chains that underpin clean energy technologies. Energy security increasingly depends on the resilience of integrated systems, the ability to manage shocks and price volatility, and the capacity to align near-term security needs with longer-term transition objectives.

The region faces several interconnected risks. Oil demand continues to grow while regional crude production has fallen by 40% since its peak in the 1990s, increasing dependence on imported crude, which has risen by 30% since 2015, and refined products. Natural gas remains important for power generation and industry but rising LNG import needs expose several economies to regional and global gas market volatility and infrastructure constraints. Coal continues to support electricity security and industrial activity in many ASEAN member states, and transitions need to ensure adequate, affordable and reliable alternatives. Electricity systems face rising demand, the risk of fuel supply disruption, and increasing requirements for flexibility and grid investment as electrification and the share of variable renewable increases, alongside growing climate-related risks. Critical minerals and clean energy supply chains create new opportunities for ASEAN but also expose them to global supply-chain concentrations.

Looking ahead, these challenges are likely to intensify. Electricity demand in Southeast Asia is projected to expand at an average annual rate of around 5.4% during 2026-2030, driven by rising demand for cooling, data centres and industry. Coal demand is expected to continue growing at around 4.4% per year over the same period, the fastest increase of any region worldwide. Gas consumption in the region is projected to rise by more than 3% annually over the coming years. Finally, for the region’s most import-dependent fuel, ASEAN net oil product imports are expected to increase by around 5% between 2025 and 2031. These trends point to a clear need for timely action.

While the energy security risks differ by country and fuel, they point to the need for a common policy agenda centred on three broad reinforcing strategies: diversifying energy supply sources and routes, making greater use of domestically available energy resources; and accelerating electrification alongside efficiency improvements. A holistic systems-based approach is essential, recognising the growing interdependence between electricity, fuels and end-use sectors.

Regional co‑operation is central to this agenda and the ASEAN Plan of Action for Energy Cooperation (APAEC) 2026-2030 provides the strategic framework. In addition, energy co‑operation through the ASEAN Power Grid (APG), the ASEAN Memorandum of Understanding on the Trans-ASEAN Gas Pipeline Project and the ASEAN Framework Agreement on Petroleum Security (APSA) provides an important foundation for collective action. This review shows that these agreements should be further operationalised and strengthened to bolster regional energy security. A stronger regional approach would complement national resilience measures by helping ASEAN member states prepare for external energy market shocks, manage infrastructure and affordability risks, and share flexibility and emergency support across borders. The following recommendations capture the main actions needed to strengthen energy security across the ASEAN countries’ fuels, technologies and enabling systems.

Oil, petroleum products and liquid biofuels. The region’s oil emergency preparedness can be strengthened by further operationalising APSA and supporting the effective functioning of ACE as the APSA secretariat with guidance from ASEAN member states. A strengthened secretariat could support regular reviews of APSA procedures, enhance regional oil market monitoring and, subject to member states’ agreement, facilitate country-level reviews and assist with putting co‑ordinated emergency response measures into operation. The secretariat could also establish a liquid biofuel taskforce to support regional supply chain development, identify import and export opportunities between member states for these fuels, and collectively set sustainability criteria for an integrated regional market. Regular capacity-building activities, including regional oil emergency response workshops and exercises, would help test APSA’s strengths and limitations, identify gaps in national preparedness and build confidence in cross-border co‑operation during severe disruption.

At the national level, ASEAN member states can strengthen domestic oil resilience by building more robust stockholding policies, demand-side measures and clear crisis procedures, and by the development of sustainable liquid biofuel supply chains. Countries with domestic resources can consider how to increase domestic oil production by adopting fiscal regimes that are predictable and supportive of investment. Member states with high import dependence could assess whether existing commercial inventories are sufficient for severe supply disruption and, where needed, develop sustainable financing and governance models for strategic petroleum reserves. Member states - particularly smaller or highly import-dependent economies - could explore voluntary and commercially based regional stockholding and storage arrangements, to complement national systems. Longer-term, countries could consider supporting the expansion and upgrading of domestic refining capacity, thereby orienting strategic stockholding measures towards crude oil. For LPG, however, dedicated additional strategic storage may be a more appropriate solution. Leading liquid biofuel-producing member states could continue increasing sustainable production by leveraging commercial production pathways and developing new pathways to capitalise on non-traditional feedstocks. More nascent markets could leverage expertise elsewhere in the region to develop a domestic industry and reduce import dependence.

Natural gas and low-emissions gases. Regional co‑operation on gas security through APSA and collaboration with international partners can strengthen ASEAN member states’ gas resilience. A dedicated co‑ordinated emergency response mechanism for natural gas under the Coordinated Emergency Response Measures framework of APSA could help clarify roles, procedures, data collection and market monitoring during crises. Regional gas market integration should be pursued where projects have a positive cost-benefit case, including through infrastructure that improves interconnectivity and interoperability and allows ASEAN member states to share supply more effectively. Local biomethane production, supported through targeted policies, incentives and experience-sharing, could improve the regional gas balance where it is developed sustainably and at scale.

ASEAN countries could strengthen gas supply availability, flexibility and resilience by maintaining economically viable domestic production, expanding LNG import infrastructure where needed, and, where appropriate, improving pipeline connectivity and developing gas storage capacity. However, investment decisions will need to account for uncertainty over future gas demand, the pace of clean energy deployment and the risk of overbuilding infrastructure. These investments will be increasingly important as several economies become more dependent on LNG imports and more exposed to global gas market shocks. National planning frameworks can benefit from considering not only supply volumes, but also contract flexibility, appropriate infrastructure redundancy, storage options and the ability of gas systems to respond during disruption.

Coal and modern solid biofuels. The role of coal differs significantly between ASEAN member states depending on resource endowment, power sector structure, industrial demand and net zero ambitions. Overall priorities include strengthening regional co‑operation and transparency to support reliable coal trade and minimise unintended regional impacts of domestic market interventions. 

For member states that rely on coal for power generation or industry, their policy should focus on maintaining security of supply while preparing credible decarbonisation transition pathways. ASEAN member states that rely on coal for power generation can evaluate whether coal stockholding requirements are needed to strengthen power system resilience. Given the relatively low cost of coal storage, member states without stockpiling obligations could assess the benefits of minimum inventories for coal-fired power plants. For ASEAN member states with net zero commitments, coal transition roadmaps need to explicitly consider security of supply as well as decarbonisation considerations, including co-firing. These roadmaps should assess power system adequacy, the availability of replacement capacity, fuel switching to modern sustainable solid biofuels, grid readiness, affordability and the economic implications of early retirement, particularly in member states with young coal fleets.

Electricity and renewables. Electricity security should evolve to reflect the changing risk profile of power systems. Planning frameworks that integrate resource adequacy, flexibility, grid development, climate resilience, fuel security and affordability are better positioned to identify emerging vulnerabilities. As electricity grids are central to enhancing system resilience, grid infrastructure should be expanded and modernised to keep pace with demand growth and renewables deployment, while being more resilient to the effects of climate change.

Regional co‑operation through the APG can complement national investment by enabling ASEAN member states to share renewable resources, reserves, flexibility and emergency support across a wider geographical area. Realising the electricity security benefits of the APG will require participating countries to introduce enabling domestic conditions and effective co‑operation arrangements. The region’s diverse renewable energy resource potential, including solar, wind, hydropower, geothermal and modern sustainable biomass, can support greater diversification of electricity supply while reducing exposure to imported fossil fuels. As variable renewables expand, key measures to effectively integrate them include flexible power plants, enhanced grid capacity, storage deployment, demand-side measures, accurate forecasting, and improved system operation practices and market frameworks. Alongside renewables, the potential of nuclear to contribute to energy security should be explored.

Demand-side flexibility should become a standard component of electricity security strategies. Better visibility and understanding of demand patterns, rooftop solar PV, behind-the-meter resources, cooling demand, electric vehicles and new large loads will be essential as electrification accelerates. Policies and market frameworks including tariffs, incentives, technical requirements and aggregation platforms should enable demand response and distributed resources to support system reliability, resilience and affordability.

Energy efficiency and demand-side management. Energy efficiency is often the most cost-effective means of strengthening energy security because it reduces energy demand, lowers energy expenditure, and reduces the need for energy infrastructure investment and fuel imports. ASEAN can strengthen energy efficiency by enhancing regional co-operation on policy frameworks, target setting, updating energy efficiency plans and improving compliance monitoring and enforcement across all sectors. A co‑ordinated regional framework that supports fuel economy standards for light- and heavy-duty vehicles, vehicle labelling, electric vehicle regulations and interoperable charging infrastructure could accelerate progress in transport efficiency. For appliances and buildings, ASEAN can further harmonise and strengthen minimum energy performance standards and energy labelling, especially for air conditioners, refrigerators and lighting. Voluntary labelling and building certification schemes could progressively move towards mandatory approaches where appropriate, while building energy codes can be expanded in coverage and stringency.

ASEAN countries can strengthen industrial energy efficiency through energy management programmes, capacity building and incentives for using high-efficiency technologies such as industrial motors. Demand-side flexibility, enabled by measures such as smart meters and time-of-use pricing, can reduce peak demand, improve resilience and support more secure power systems. Greater transparency and more consistent data availability would support implementation and allow policy makers to track whether efficiency gains are reducing demand growth and import exposure. Sharing best practices on financing can help ASEAN member states improve access to finance for projects, replicate successful approaches and scale up investment in cost-effective improvements.

Critical minerals. The main security question on critical minerals for the region is how to capture more value from them while reducing the risk of exposure to concentrated global supply chains. Global processing remains highly concentrated, and recent export controls imposed outside the region have shown how quickly disruption can affect industries. These risks are especially relevant for ASEAN economies seeking to expand manufacturing and clean energy industries, since even resource-rich countries can depend on external suppliers for equipment, technologies, and components. ASEAN member states thus need to manage their reliance on using imported technologies, refined materials and specialised components. A more strategic approach could help ASEAN member states assess where domestic or regional capabilities can be developed, where diversification is needed, and where partnerships with external suppliers will remain essential.

A more integrated ASEAN approach to critical minerals would combine national industrial policies with stronger regional co‑operation. Priorities include improving geological data, developing shared standards, supporting responsible mining and processing, expanding recycling and circular economy measures, and identifying opportunities for regional value chains across mining, refining, manufacturing and end-use sectors. This would help ASEAN capture more economic value from its resource base while strengthening resilience to supply disruptions, trade restrictions and external technology dependencies.