Transport sector is the second largest final energy consumption in ASEAN after Industry sector. Without any mitigation measures applied, the share of energy consumption of transportation sector is projected to be 38% in 2050. Decarbonise transportation sector in the region is considered as one of key strategies towards carbon neutrality target in ASEAN under green value chain integration. Electric vehicles (EV) combined with biofuels are expected to bring a significant contribution to decarbonisation pathways in ASEAN. With its abundant availability, biofuels offer tremendous benefits for the region particularly as another valuable option of the EVs. The shift to electric vehicles (EVs) in the region might need longer times due to several key factors such as infrastructure requirements, cost, and grid flexibility. In other words, maintaining internal combustion engine (ICE) vehicles and switching to bioenergy in the ASEAN region, could be a more feasible and sustainable solution while the required infrastructure for EVs in the region is being further developed.  

The 7th ASEAN Energy Outlook estimated the average annual energy consumption growth of transportation sector in ASEAN from 2021-2050 is around 4.4% under the baseline scenario. Similarly, the total final energy consumption of transportation sector in 2050 is projected to increase by 2.7 times of the 2020 amount due to economic and population growth factors.  Moreover, oil products still dominated final energy sources of transport sector (91% share) in 2050. Under the regional target, deployment of EVs in 2050 is assumed to increase by 14 times of the baseline value, resulting in -73% decrease in oil consumption in transport sector. Thus, the utilization of biofuels combined with deployment of EV would contribute significantly to decarbonisation efforts in transportation sector in the region including to slower speed of oil import of the region. Under the cost optimisation scenario, the combination of biofuel and EV is projected to reduce energy consumption in transport sector by 53% in 2050.  

In other hand, the region also needs to speed the efforts towards energy intensity (EI) reduction, which is currently at 7% gap in meeting the regional target of EI reduction by 2025. Moreover, the speed of energy supply in 2050 is higher energy demand also indicates energy efficiency measures in the region need to be also strengthened. Therefore, the adoption of a dual approach strategy that emphasises both bioenergy and energy efficiency alongside EVs can be pivotal for several reasons: 

Firstly, transitioning to electric vehicles (EVs) is a complex endeavour, as such undertaking requires significant financial investment towards the development of charging infrastructure, improvements to the existing power grid, and establishment of facilities for battery production. For developing nations in the region already grappling with other urgent investment needs, such an effort might be unaffordable. However, adopting biofuels offers a compelling alternate path. Due to their compatibility with current fuel distribution systems, biofuels can be integrated smoothly, eliminating the need for costly upgrades to the infrastructure. 

Bioenergy has the additional advantage of being producible locally. This not only decreases the region’s reliance on imported petroleum, but also bolsters energy security. The AEO7 report indicates that raising the biofuel proportion in the transport sector to 10% by 2040 could curtail oil import dependency by 7%. Furthermore, biofuel production could be a potential boost to rural economies, as it can generate jobs within fields such as agriculture, forestry, and waste management, which can help alleviate poverty and foster sustainable development within rural areas. 

While it’s true that internal combustion engine (ICE) vehicles powered by biofuels continue to emit greenhouse gases, it’s noteworthy that these emissions can be significantly less than those produced by fossil fuels. This is particularly true when considering the entire lifecycle of the fuel. Moreover, bioenergy can achieve carbon neutrality if sustainable practices are applied during biomass production and conversion. According to the AEO7, under a sustainable scenario, biofuels could contribute to a 12% reduction in CO2 emissions from the transport sector by 2040. 

The results of the ASEAN Green Transport Rally held in August 2023 showcase the potential of biofuels as a complementary decarbonisation solution alongside EVs. The rally tested various passenger vehicles on a 1,250 km drive from Jakarta to Nusa Dua in Indonesia. While the battery electric vehicles (BEVs) had no direct tailpipe emissions, their overall CO2 emissions were 166-285 kg CO2eq when accounting for electricity generation. In comparison, the biodiesel vehicles emitted only 146 kg CO2eq each over the course of the rally. This highlights that sustainably produced biofuels like biodiesel can offer comparable or potentially lower lifecycle emissions versus BEVs in ASEAN’s current context. 

Table 1. CO2 Emitted Comparison (Kg CO2-eq), ACE 2023 

Biofuels also offer the advantage of being compatible with existing ICE vehicles with minimal modifications required. This enables a smoother and more cost-effective transition towards cleaner forms of transportation. Moreover, the introduction of energy efficiency policy measures, such as fuel economy standards, eco-driving practices, and the utilisation of energy-efficient vehicle technologies, can contribute to further reductions in energy consumption and emissions within the transport sector. This enhances the potential benefits of bioenergy, creating a comprehensive solution for sustainable transportation. 

While bioenergy offers a promising option in decarbonisation of transport sector, to optimise biofuels coupled with energy efficiency is not without challenges. Ensuring the sustainability of biomass production is crucial to avoid deforestation, land-use change, and competition with food production. Moreover, technological advancements are needed to improve the efficiency and environmental performance of biofuel conversion processes.

Therefore, to fully tap into the potential of bioenergy and energy efficiency in the ASEAN region, there are several strategies that governments and industry stakeholders must consider several ways. First is Bolster regional cooperation by collaborating with the relevant stakeholders in other ASEAN countries to exchange best practices, establish regional standards such harmonised fuel economy, and foster cross-border trade in biofuels and related technologies and pathways for decarbonisation pathways in transport sector. Second is repackaging several supporting policies and incentives in biofuel would be also critical to attract market demand for biofuel in transport sector.   

Third, the promotion of sustainable biomass production practices is critical. This can be achieved through regulations, certification schemes, and incentives designed to encourage responsible land use, protect biodiversity, and limit competition with food production. Finally, endorsing energy efficiency measures such as fuel economy standards, eco-driving practices, and incentives for purchasing energy-efficient vehicles can further diminish energy consumption and emissions in the transport sector.  

Collectively, these strategies can help navigate the challenges facing bioenergy in the region and unlocking its full potential. These are not easy tasks and would require a significant amount of financial support and the willingness from private sector to engage. Finally, a consistent and continuous monitoring to track its progress is needed to ensure the policy package and decarbonisation pathway of transport sector in ASEAN.