Fossil fuel subsidies and unstable policies hinder Asia’s clean energy growth

Thu, Sep 11, 2025, 10:12 AM 2 min read

Industry executives have expressed concerns that Asia's push towards clean energy could falter without a reduction in fossil fuel subsidies, stable policy frameworks, and investments in grid upgrades, reported Reuters.

These factors are crucial for the region to keep pace with the increasing power demands, particularly from data centres.

At the Asia Pacific Petroleum Conference (APPEC) 2025 in Singapore, executives pointed out that the cancellation of renewable energy auctions and ongoing subsidies for fossil fuels are impeding the growth of green investments.

Countries, such as Indonesia and India, continue to support coal use, arguing that it helps to maintain affordable retail power tariffs. They also defend their reliance on coal by pointing to their lower per capita emissions.

Singapore-based Vena Group CEO Nitin Apte highlighted the company's plans to quadruple the construction of renewable energy projects in Asia to meet the rising demand. However, he highlighted that the main limitation is the policy, not technology.

Apte was quoted by the news agency as saying: "If we know a permit takes four years and the steps are clear, we can price that risk. The concerns come when you run an auction and then cancel it, or the power purchase agreement is not bankable."

Instances of policy unpredictability include Taiwan's revocation of two offshore wind generation licences and India's cancellation of 11.4GW of renewable energy tenders in the last two years, often due to high tariffs quoted.

Malaysia, a burgeoning market for data centres in Southeast Asia, is reportedly increasing its coal-fired power output and importing coal at record levels to capitalise on low prices.

EDP Renewables APAC chief financial officer Lawrence Wu said: "Coal continues to be subsidised and power and energy in general continue to be used as a political tool to win votes. And I think that's the biggest stumbling block."

Wu said that the company is "doubling down" on investments in Japan and Australia, citing the sustainable risks and high certainty in project development timelines in these countries as favourable for driving down financing and capital costs.

Both Apte and Wu mentioned that challenges such as permitting delays are leading to higher financing costs. They called for more predictable long-term policies and timelines to mitigate these issues.

"Fossil fuel subsidies and unstable policies hinder Asia’s clean energy growth" was originally created and published by Energy Monitor, a GlobalData owned brand.