As the world accelerates toward a low-carbon future, Southeast Asia is not sitting idly by. Indonesia and Singapore have taken a bold step forward by signing three major Memorandums of Understanding (MoUs) that aim to transform how both nations produce, use, and share clean energy.
This agreement is more than bilateral, it reflects a growing momentum in the region to work together for a sustainable future.
Three Pillars of Clean Energy Collaboration
Signed in Jakarta on June 13, 2025, the three MoUs cover a broad yet interconnected set of priorities: cross-border electricity trade, carbon capture and storage (CCS), and the development of a Sustainable Industrial Zone (SIZ). These areas are key to decarbonizing not just national economies, but also the broader industrial and energy ecosystems of Southeast Asia.
Indonesia’s Minister for Energy and Mineral Resources, Bahlil Lahadalia, emphasized that this cooperation is built on the principle of mutual benefit.
“We are sending clean electricity to our friends in Singapore, while working together to build green industrial zones in Indonesia. This is a win-win model we hope will inspire others in the region,” he stated.
Cross-Border Clean Power
Under the MoU on electricity trade, Indonesia and Singapore will jointly create regulatory and business frameworks that allow renewable energy to flow across borders. The goal is to finalize these arrangements within 12 months.
For Singapore, which faces land limitations, importing clean energy is a vital step to decarbonize its economy. For Indonesia, it is an opportunity to monetize its abundant renewable resources, especially solar and hydropower.
Green Industry in Batam, Bintan, and Karimun
The second MoU focuses on establishing a Sustainable Industrial Zone (SIZ) across Batam, Bintan, and Karimun islands in Indonesia’s Riau Islands Province. These zones will host low-carbon industries such as battery manufacturing, clean logistics, and green data centers.
To implement this vision, both countries have formed a joint task force. Indonesia’s Ministry of Energy and Mineral Resources will serve as co-chair, ensuring local policy support. The SIZ is designed not just to attract green investment, but also to provide streamlined licensing and reliable infrastructure for long-term industrial success.
Capturing Carbon, Creating Trust
The third MoU addresses a newer but crucial aspect of climate action: carbon capture and storage. Indonesia has large underground storage potential in its depleted oil and gas fields, while Singapore needs space to store its emissions.
The cross-border nature of this initiative requires strong legal frameworks, which the two countries will develop together through a government-to-government agreement.
This MoU not only supports carbon management but also builds trust and technical alignment between the two nations. It aligns with international standards on carbon accounting and ensures transparency in emission reductions.
Regional Significance and Shared Prosperity
While this collaboration is bilateral on paper, its impact is regional. It sets a precedent for how ASEAN countries can align national interests with regional climate goals. Singapore’s role as a financial and technological hub complements Indonesia’s vast natural resources and workforce, creating a synergy that could become a model for other partnerships across Asia.
This effort also aligns with Indonesia’s push for downstream industrialization and Singapore’s climate neutrality targets.
Together, they show that clean energy cooperation can be about more than reducing emissions, it can create jobs, boost investment, and strengthen diplomatic ties.
Looking Ahead
As both nations begin implementing the terms of the MoUs, the region will be watching. If successful, this partnership could catalyze more cross-border energy projects, green industrial zones, and climate-smart investments in Southeast Asia.
By choosing collaboration over competition, Indonesia and Singapore are showing the region that sustainable growth is not just possible, it’s already underway.
