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With the United States under President-elect Donald Trump expected to pivot away from renewable energy and sustainable investments, Asia will soon find itself at a strategic crossroads.
A Republican-controlled US government under the new president, according to renewables, energy and natural resources sector data provider Wood Mackenzie, is expected to shift energy policy away from net-zero goals. Looser emission regulations, protectionist trade policies and a potential withdrawal from the Paris agreement could signal a sharp divergence in priorities.
While bipartisan support for the Inflation Reduction Act and strong renewable energy economics will sustain some energy transition momentum in the US, Asia’s growing expertise, knowledge and determination to lead in sustainable infrastructure offers the region a unique opportunity to seize global leadership in renewable energy innovation and implementation.
Asia’s momentum
Today, Asia stands as both the world’s largest producer and consumer of energy, and is still relying heavily on coal and fossil fuels to power its sprawling megacities and industries.
Yet, the region now also boasts vast renewable energy resources, among them, solar in the deserts of India, wind along the coastlines of China, South Korea, Taiwan and Japan, and hydropower potential in Southeast Asia’s rivers.
Led by heavyweights like China, Japan and India, the timing could now be apt for Asia. The move towards global leadership though would not just be a response to the potential changing of US energy policies but, in reality, would be an essential move for a region that has to increasingly balance economic growth, environmental challenges and the preservation of an immense and unique natural biodiversity.
Shifting US policies
Recent reports highlight the urgency for Asia to act. In his latest report, Lombard Odier’s CIO, John Woods, emphasizes how US financial and trade policies will ripple through Asia, presenting challenges as well as opportunities for the region to pivot towards sustainable investments.
Donald Trump’s return to the White House will also bring added complexity for Asia’s renewable energy ambitions, according to Selena Ling, chief economist and head of global markets research and strategy at OCBC in Singapore. The Trump administration’s threats of elevated tariffs on Chinese exports, including a proposed 60% levy, Ling notes, could disrupt global trade dynamics.
While such measures may export inflation and constrain monetary easing policies across Asia, they also amplify the urgency for the region to embrace renewable energy as a counterbalance to fossil fuel-driven geopolitical risks.
This urgency is noted by a recent UOB Asset Management ( UOB AM ) report, which highlights China’s resilience through its “growing manufacturing capability in renewable sectors, such as electric vehicles ( EVs ), EV batteries and solar panels”, which can drive exports and economic recovery despite trade tensions.
Against this backdrop, Asia’s rapid advancements in renewables make the region a natural contender to be the global renewable energy leader.
Renewable energy future
Undoubtedly, China has emerged as the global heavyweight in renewable energy. With a commanding lead in solar panel production and investments in wind energy, the country is already a renewable energy superpower. Its Belt and Road Initiative ( BRI ) has also integrated green financing and renewable energy projects, extending China’s influence across Asia and beyond.
The country’s leadership is visible in its commitment to ambitious targets: achieving carbon neutrality by 2060 and building 1,200 gigawatts ( GW ) of renewable capacity by 2030. These commitments are backed by massive state-led investments and incentives to foster private sector participation.
India, with its own robust energy demand, has ramped up renewable energy projects to meet its climate goals. The International Solar Alliance, spearheaded by India, underscores the nation’s leadership in mobilizing global efforts to harness solar energy.
India’s recent auctions for solar and wind projects have attracted record-low tariffs, making renewable energy increasingly competitive against coal. This shift aligns with the country’s objective of installing 500GW of non-fossil fuel energy capacity by 2030. However, challenges like grid stability and financing will need strategic interventions to maintain momentum.
While Japan lacks the vast landscapes of China and India, it compensates with innovation, technological expertise and financial heft.
The Japanese government’s push towards achieving carbon neutrality by 2050 includes significant investments in offshore wind projects and international collaborations to develop green hydrogen. As a leader in energy storage and hydrogen technology, Japan is pioneering new ways to store and distribute renewable energy effectively with Asian partners. All of these initiatives position Japan as a critical player in Asia’s renewable energy ecosystem.
Asia’s megacities like Tokyo, Shanghai and Mumbai are not just huge energy consumers but also innovation hubs. Initiatives like urban solar rooftops, electric mass transit and smart-city programmes highlight the potential of these and other Asian cities in driving renewable adoption.
Equally vital, however, is preserving the region’s rich biodiversity, and this is still being worked out. Asia urgently needs to implement how leveraging ecosystem services through carbon credits and biodiversity-focused investments can balance energy development with ecological preservation.
Hurdles, challenges
However, despite the justified optimism, Asia still faces hurdles in its renewable energy journey such as:
Geopolitical shift
A second Trump administration prioritizing fossil fuels and isolating US climate commitments will open a power vacuum in global renewable leadership. Asia is poised to, and can, fill this gap, leveraging its scale, resources and innovation.
The transition isn’t just about energy, it’s a statement of geopolitical intent. As Asian nations invest in renewables, they solidify their positions as leaders in the global green economy and, in turn, can influence international standards and policies.
Asia’s path to renewable energy dominance isn’t without challenges, but the stakes couldn't be higher. As the US retreats from sustainable leadership, Asia has the opportunity, and perhaps the responsibility, to redefine the global energy landscape.
Through coordinated efforts, technological innovation and visionary policies, the region can not only meet its energy needs but also inspire a global shift towards a sustainable future.
“China’s manufacturing strength in renewables like EV batteries and solar panels,” the UOB AM report aptly observes, “can help the nation not only counter US tariffs, but also secure its place as a leader in the global energy transition”.
The time for Asia to take the lead and create a renewable and sustainable Asia is now.
