The Asia Zero Emission Community (AZEC), led by Japan, held a ministerial meeting in Indonesia on August 20 and 21. During the meeting, 70 cooperation memorandums were signed to actively promote energy transformation in Southeast Asia. Toyota Tsusho and Indonesia's state-owned oil company Pertamina have committed to jointly developing biofuels and green hydrogen, strengthening Japan's green influence in the Asia-Pacific region.

Japan focuses low-carbon energy as investing Southeast Asia

Toyota Tsusho, a trading company under the Toyota Group, aims to develop green energy to benefit its logistics business. The company plans to provide renewable energy at Patimban Port and the surrounding industrial park in West Java, with infrastructure expected to be operational by 2026 and the overall project commercialized by 2028.

Indonesian coordinating minister for economic affairs Airlangga Hartarto stated that the cooperation focuses on enhancing regional power grids, investing in new energy sources such as hydrogen and ammonia, and adopting "new generation vehicles" and sustainable fuels.

Prime Minister Fumio Kishida proposed the concept of AZEC in 2022, and it was established the following year with the participation of 11 partner countries, including Japan, Australia, and nine ASEAN member states excluding Myanmar. The platform aims to serve as a framework for cross-national policy making, coordination, and regional decarbonization cooperation.

Japanese Minister of Economy, Trade, and Industry, Ken Saito, mentioned that out of the 70 cooperation memorandums, 14 projects have been funded with 1 billion USD through a project in partnership with global South support scheme.

He noted that AZEC is currently working on establishing a sustainable fuel market for the transportation industry to achieve energy transformation in Asia. The official details of all the cooperation memorandums have not been disclosed.

Japan proposed AZEC to decarbonize Asia

Many Japanese companies are already engaged in cross-national renewable energy development in Southeast Asia. For example, the general trading company Sojitz is collaborating with Indonesia's largest rooftop solar developer Energi Mitra Investama. This partnership includes installing solar panels for Aeon's first location in Indonesia and exploring energy storage batteries and zero-carbon fuels.

Kyudenko, a subsidiary of Kyushu Electric Power, is developing renewable energy in Indonesia to replace expensive diesel power in remote islands. This project, along with Kansai Electric Power’s cross-island infrastructure, is reportedly supported by the Japanese government.

Sumitomo Corporation, which is developing urban projects in Hanoi, Vietnam, plans to use its industrial park's renewable energy and technology to create energy-efficient housing. Additionally, it is collaborating with Japanese oil company Eneos and Sarawak State Government in Malaysia to jointly develop green hydrogen, with plans to export it back to Japan to achieve the government's hydrogen goals.

Nikkei Asia believes that the rise of China has weakened Japan's influence in Southeast Asia. Therefore, Japan's initiation of sustainable and decarbonization organizations to facilitate cross-national cooperation will help Japan maintain its voice and expand its market presence in Southeast Asia.