Rethinking Green Industrial Policy in ASEAN Regionalism in the global dis-order

The report is based on the findings of a regional workshop on Green Industrial Policy in Southeast Asia, held on 25-27 August 2025, in Jakarta, Indonesia, organised by the Transnational Institute (TNI), The Legal Center for International Trade and Investment (LCITI) Faculty of Law, Universitas Indonesia, and Research Center for Macroeconomics and Finance – Research and Innovation Agency (BRIN). 

The mainstream discourse on Green Industrial Policy (GIP) has thus far been dominated by the perspectives of advanced industrialised countries, which tend to emphasise decarbonisation, carbon efficiency, and compliance with global environmental standards. Within this framework, LMICs are positioned as recipients of technology, objects of green investment, or suppliers of raw materials for the global energy transition. Consequently, GIP in the Global South often reproduces practices of green colonialism. 

ASEAN, as a region with diverse economic development trajectories, currently exhibits structural vulnerabilities and mounting tensions between national interests and global pressures. The region stands at a crossroads, confronting two major and simultaneous pressures, namely China’s dominance over green-technology production chains, and the US’s deployment of tariffs as an instrument to reshape global trade governance. Faced with these pressures, member states have tended to pursue bilateral pathways in search of short-term gains, which in turn weakens ASEAN’s collective position, deepens regional fragmentation, and ultimately contradicts several agreed regional agendas. ASEAN’s limited political cohesion and weak institutional mandate render the region structurally vulnerable to external pressures.

Strengthening regionalism is therefore an urgent and collective strategic imperative. Only by acting in concert can ASEAN enhance its bargaining power, secure the policy space necessary for a just green industrialisation and prevent new forms of dependency and resource exploitation that would reinforce green colonialism. Strong regionalism would enable ASEAN to position itself not merely as a market or resource supplier, but as an active and consequential participant in the restructuring of global production chains. This is not a defensive response to immediate crises; it is a long-term political project to build the foundations of sovereign, inclusive, and sustainable development.

Rethinking GIP in Southeast Asia from a Global South perspective, therefore, entails a twofold imperative: redefining developmental objectives, especially on regional integration, and identifying practical pathways for implementation. 

Effective GIP requires more than regulatory flexibility. It demands moving beyond ‘one-size-fits-all’ global templates towards regionally grounded strategies that prioritise structural transformation, technological learning, and inclusive development, while guarding against new forms of green dependency amid intensifying geopolitical rivalry. 

Therefore, the briefing paper shows the agenda to strengthen ASEAN regionalism for the GIP should be organised around four interconnected collective priorities: 

First, ASEAN needs to redefine GIP in order to restructure the industrial development pathways of each member state, directed towards a structural green economic transformation grounded in sovereignty, self-reliance, community-centred justice, and the strengthening of collective regionalism. This includes building a platform for economic and political cooperation based on the principle of South— South solidarity that opens equitable policy space for member states to achieve development equality, such as more substantive special and differential treatment rules for LMICs, including greater flexibility to implement industrial subsidies, local-content requirements, and technology-transfer policies.

Second, ASEAN needs to establish a collaborative upgrading framework for green industrial strategy. This requires shifting member states’ green industrialisation strategies from fragmented competition toward integrated cooperation, leveraging the region’s institutional diversity and complementary economic structures as the foundation of collective strength.

Third, it is important to institutionalize people-centred regionalism within ASEAN’s governance architecture. Realizing a just energy transition requires member states to commit to reforming ASEAN institutions so that the region moves beyond formal consultations toward genuine strategic negotiations that account for structural power asymmetries and protect local livelihoods.

Fourth, building a sovereign and equity-oriented green financing architecture for ASEAN is critical, given that the current global green finance landscape, characterised by high borrowing costs, private capital dominance, conditionality-laden concessional flows, and the governance structures of the multilateral development banks (MDBs), has reflected the interests of advanced economies. ASEAN should establish a dedicated green industrial financing facility, a collectively governed instrument that pools concessional resources, provides guarantees for early-stage green industrial investments, and offers longer-term patient capital suited to the timelines of industrial capability building. Moreover, ASEAN should also collectively advocate for debt-restructuring mechanisms that relieve the fiscal pressure constraining lower-income member states’ green investment capacity. 

The conclusions of this briefing point to the need for further studies aimed at reformulating GIP in ASEAN within the context of strengthening regionalism as a strategic response to the instabilities and inequities of the current global rules-based order. Such studies are necessary to provide constructive and critical interventions at a moment when ASEAN, having agreed upon the ASEAN Vision 2045 in 2025, is now moving towards implementation through the AEC Strategic Plan 2026–2030. 

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