Powering ASEAN's sustainable manufacturing future

ASEAN's manufacturing sector is on a strong growth trajectory, driving GDP, exports, and employment across the region. But as industries scale up, the challenge of decarbonisation looms large. In an interview with International Metalworking News for Asia, Lin Daowei, Head of Northern Region at ENGIE Services Malaysia and Head of Regional Industry Solutions for ENGIE SEA, outlines why sustainable energy strategies are no longer optional — they are essential for competitiveness, regulatory compliance, and operational resilience.

- By: Kathryn Gerardino-Elagio

WHY DECARBONISATION CAN'T WAIT

According to Lin, ASEAN manufacturing has reached a pivotal inflection point. "Future growth must be sustainable and scalable, or the region risks locking in decades of high emissions, rising costs, and regulatory penalties," he says. In Malaysia, the Energy Efficiency and Conservation Act is already in effect, with a carbon tax set for 2026. Rising electricity demand — projected to grow 3.4% annually through 2026 — and recent tariff hikes add further cost pressures.

Beyond domestic regulations, global supply chains are enforcing strict Scope 3 emissions targets, pushing suppliers to prove low-carbon production. "Decarbonisation has become a market access requirement," Lin explains. "ENGIE's partner STMicroelectronics, for example, pursued renewable energy not just to meet ESG goals but to remain competitive in the global semiconductor market."

ENGIE SEA helps manufacturers adopt integrated solutions — from solar and renewable energy procurement to advanced cooling, heating, and efficiency systems — without disrupting production. Done right, these measures reduce carbon emissions, improve energy resilience, and manage cost volatility. "We are seeing rising demand for onsite solar and decentralised energy solutions across the region," Lin notes.

OVERCOMING COMMON PITFALLS IN MULTI-SITE SUSTAINABILITY

A frequent misstep, Lin says, is treating sustainability as isolated site-level initiatives rather than a coordinated business strategy. This approach often leads to inconsistent results, duplicated efforts, and missed economies of scale.

Other challenges include perceived high upfront costs, limited visibility into energy data, and concerns over operational disruption. Renewable intermittency and integration costs for battery storage also require careful planning.