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By: Kathryn Gerardino-Elagio
ASEAN’s manufacturing sector is on a strong growth trajectory, driving GDP, exports, and employment across the region. But as industries scale up, the challenge of decarbonisation looms large. In an interview with International Metalworking News for Asia, Lin Daowei, Head of Northern Region at ENGIE Services Malaysia and Head of Regional Industry Solutions for ENGIE SEA, outlines why sustainable energy strategies are no longer optional — they are essential for competitiveness, regulatory compliance, and operational resilience.
Why Decarbonisation Can’t Wait
According to Lin, ASEAN manufacturing has reached a pivotal inflection point. “Future growth must be sustainable and scalable, or the region risks locking in decades of high emissions, rising costs, and regulatory penalties,” he says. In Malaysia, the Energy Efficiency and Conservation Act is already in effect, with a carbon tax set for 2026. Rising electricity demand — projected to grow 3.4% annually through 2026 — and recent tariff hikes add further cost pressures.
Beyond domestic regulations, global supply chains are enforcing strict Scope 3 emissions targets, pushing suppliers to prove low-carbon production. “Decarbonisation has become a market access requirement,” Lin explains. “ENGIE’s partner STMicroelectronics, for example, pursued renewable energy not just to meet ESG goals but to remain competitive in the global semiconductor market.”
ENGIE SEA helps manufacturers adopt integrated solutions — from solar and renewable energy procurement to advanced cooling, heating, and efficiency systems — without disrupting production. Done right, these measures reduce carbon emissions, improve energy resilience, and manage cost volatility. “We are seeing rising demand for onsite solar and decentralised energy solutions across the region,” Lin notes.
Overcoming Common Pitfalls in Multi-Site Sustainability
A frequent misstep, Lin says, is treating sustainability as isolated site-level initiatives rather than a coordinated business strategy. This approach often leads to inconsistent results, duplicated efforts, and missed economies of scale.
Other challenges include perceived high upfront costs, limited visibility into energy data, and concerns over operational disruption. Renewable intermittency and integration costs for battery storage also require careful planning.
ENGIE addresses these barriers through models like BOOT (Build, Own, Operate, Transfer) and UaaS (Utilities-as-a-Service), which remove upfront capital expenditure and centralise project delivery. The approach has yielded impressive results — such as for Mölnlycke, a global medical products leader, which partnered with ENGIE to power its Kulim, Kedah factory. Within two years, Mölnlycke reduced CO₂ emissions by over 50% in Malaysia without taking on financial or operational risks.
Turning Roadblocks into Results
ENGIE’s project portfolio across ASEAN showcases its ability to deliver measurable decarbonisation while safeguarding productivity:
- JTC Corporation (Singapore): ENGIE is developing a 30,000 RT underground District Cooling System for the Punggol Digital District, cutting carbon emissions by 3,700 tonnes annually and reducing energy consumption by up to 30%. The system, integrated with an Open Digital Platform, uses machine learning for optimal efficiency.
- UAC Berhad (Malaysia): Starting in 2018, ENGIE upgraded compressed air systems, improved energy efficiency by 18%, and reduced CO₂ emissions by 520 tonnes annually. Subsequent projects replaced oil boilers with natural gas systems, installed rooftop solar, and modernised steam infrastructure — collectively reducing over 13,000 tonnes of CO₂ annually.
- Filinvest (Philippines): ENGIE introduced the country’s first district cooling system in Filinvest City, achieving up to 40% energy savings. A combination of district cooling, rooftop solar (17 MW), and sustainable cooling capacity has significantly lowered emissions and operational costs.
Integrating Clean Energy Without Disruption
Operational continuity is non-negotiable in manufacturing, Lin stresses. ENGIE’s approach includes phased implementation aligned with maintenance schedules, parallel system installations, and rental systems for uninterrupted utility supply.
A recent example is ENGIE’s 15-year Cooling-as-a-Service contract with CapitaLand Investment in Singapore, where retrofits at Plaza Singapura and The Atrium@Orchard were carried out outside operating hours. Similarly, for Mölnlycke, ENGIE integrated efficient utilities during plant construction so systems were operational from day one.
Digital Tools for Predictive Energy Management
Digitalisation has shifted energy management from reactive troubleshooting to predictive optimisation. ENGIE deploys cloud-based analytics, real-time monitoring, and digital twins to give clients continuous visibility into asset performance.
“If a compressed air system in Penang shows abnormal consumption, it’s flagged immediately,” Lin explains. “This prevents weeks of wasted energy, cost, and emissions.” ENGIE’s Centralised Operating Command Centre offers 24/7 monitoring across asset portfolios, enabling condition-based maintenance and stronger operational resilience.
Energy Efficiency as a Competitive Advantage
Energy efficiency projects, Lin argues, should be positioned as drivers of operational competitiveness, not just sustainability measures. Efficiency upgrades at UAC Berhad boosted energy efficiency by up to 22% while cutting 13,000 tonnes of CO₂ annually.
In Singapore, ENGIE’s Centralised Utilities Building for a major pharmaceutical manufacturer provides seven utilities under a 15-year BOOT contract, avoiding over 9,000 tonnes of CO₂ annually and earning Green Mark Gold certification. “Efficiency strengthens a company’s competitive position in the market and enhances brand credibility,” Lin says.
Future-Proofing for ESG
To meet tightening ESG standards and investor expectations, Lin advises manufacturers to focus on three priorities:
- Energy Optimisation: Use data analytics for real-time monitoring and process efficiency.
- Decarbonisation: Deploy energy-efficient technologies and low-carbon practices to reduce emissions and mitigate carbon tax exposure.
- Renewable Integration: Leverage Virtual Power Purchase Agreements and Renewable Energy Certificates for flexible, traceable clean energy adoption.
Partnering with experienced energy providers ensures companies can adapt to policy and technology changes over the next 10–20 years.
What’s Next for ASEAN Decarbonisation
Over the next five years, Lin predicts battery energy storage systems will become game-changing, enabling manufacturers to store solar energy for peak demand. Carbon pricing, already planned in Malaysia and rising in Singapore, is likely to expand regionally.
“The winners will be those who move from one-off efforts to integrated energy strategies,” Lin concludes. “Early movers can turn compliance into a competitive advantage, building flexible, future-ready systems that enhance competitiveness, resilience, and brand value.”