One could say that Southeast Asia is entering a new era of “green ambition”. What was once defined by e-commerce and fintech booms, the region’s startup landscape is now being reshaped by an urgent, global race toward sustainability.
However, the question is, can the region scale green innovation fast enough? Short answer: Yes.
This is because the governments are pledging net-zero targets, investors are forming climate-specific funds and more consumers, particularly the region’s growing middle class, are demanding responsible and low-carbon solutions. Now, the result that we have is a green tech gold rush, where the majority of founders are competing both for market share and environmental impact.
We can all agree that the shift could not come at a more critical time. Southeast Asia’s energy and transport emissions are rising faster than almost any other developing region. For example, countries like Vietnam, Thailand and even Indonesia pledge steep reductions by 2050.
Can the region scale green innovation fast enough?
What makes this transition complex in and of itself and at the same time also ripe for innovation is the region’s heavy dependence on coal, rapid urbanisation and rising energy demand.
From fintech to climate tech: The new frontiers for Southeast Asian innovation
For years now, fintech has meant the region’s startup maturity, which includes vast addressable markets, strong government support and clear consumer demand. Today, we have seen firsthand that the same infrastructure is fuelling climate innovation. So, the parallels here are striking, founders are leveraging everything from data analytics, digital payment rails and mobile connectivity to build new ecosystems around clean energy, carbon markets and sustainable finance.
Let’s take a look at Singapore’s SunGreenH2, which has emerged as one of the region’s clearest proof points. SunGreenH2 is a startup backed by Mobility-as-a-Service and Monaco Hydrogen Alliance’s MH2 Fund. They are developing green hydrogen production technology that could significantly help cut costs in energy storage and transport.
Just recently, the company secured new investment to expand its modular electrolyser systems across Asia and Europe, which is a good sign that Southeast Asian clean-tech ventures can compete on a global stage.
Now, going across the Malacca Strait, we have Indonesia’s Xurya that is scaling rapidly as one of the country’s most active solar energy players. Xurya started as a rooftop solar leasing company and, since then, has evolved into a full-fledged independent power producer. They primarily focus on off-grid solar infrastructure for industrial and commercial clients. In addition to that, their expansion into off-grid projects directly supports Indonesia’s national energy transition plan, which aims for 23 per cent renewable energy by 2025.
Meanwhile, in Thailand, we have Banpu NEXT. They are basically a spinoff of the Banpu Group, positioning itself as a regional clean energy integrator. Recently, the company announced their ambitious plans to expand beyond Japan into Southeast Asia.
What they are offering here is interesting, including a diversified portfolio spanning electric vehicle charging, smart city solutions and energy storage. These moves in particular show a broader regional pattern, which is traditional energy incumbents collaborating with or acquiring startups to accelerate their own decarbonisation roadmaps.
Though it is important to remember that the story doesn’t just end with energy, across the region, there is a new generation of “climate-fintechs” emerging to help SMEs participate in carbon markets. They are helping to simplify aspects of reporting and credit purchases, carbon tracking, and functions that were deemed too complex or expensive for smaller companies.
Capital flows and policy momentum are aligning
The idea of private equity firms and venture capital treating climate tech as a niche play is old news and in fact, they are building dedicated “climate verticals” with long-term investment mandates.
For example, the MH2 Fund was launched in 2025 with a specific focus on hydrogen and green mobility solutions. Enterprise Singapore and SGInnovate are also following the footsteps of hosting accelerators and grants under the Green Economy framework, supporting startups in energy efficiency, carbon analytics and sustainable agriculture.
Perhaps the most important aspect is what and how the governments across Southeast Asia are setting clearer regulatory pathways and incentives for low-carbon transition.
Looking at Malaysia and Vietnam, for instance, both countries are expanding renewable energy auction schemes, while we see that Singapore’s carbon tax, already the highest in the region, provides a tangible price signal for heavy emitters to invest in decarbonisation. Thailand and Indonesia, on the other hand, are doing this through green bond frameworks and tax incentives and are directing capital into renewable and electric mobility projects.
Now, for founders, what this means is that the alignment between public policy and private capital creates fertile ground for experimentation. On top of that, climate-tech entrepreneurs are increasingly forming cross-border collaborations, including joint research initiatives on agritech resilience or EV-battery recycling.
The road to decarbonisation will define Southeast Asia’s next decade
Yes, there is always an opportunity that comes with challenges. Green tech is capital-intensive and policy-dependent and often quite slower in terms of pace to monetise than consumer internet ventures in general.
So, what founders must do is to navigate complex supply chains, long deployment cycles and fluctuating government incentives. At the same time, for investors, they are learning to adjust return expectations to match the “slower burn” of infrastructure-heavy innovation.
Yet this may be the very reason why Southeast Asia’s green tech ecosystem has staying power. Unlike the hyper-growth e-commerce rush or the subsidy-driven ride-hailing era, climate tech addresses structural, long-term needs, energy security, food resilience and carbon accountability that cannot be disrupted away. The region’s startup landscape is maturing and this new wave demands founders who can balance technological ambition with policy fluency and operational endurance.