Southeast Asia Startups Power Energy Efficiency and Sustainability in Manufacturing
Manufacturing is Growing Rapidly in Southeast Asia
Globally, Austrade said, manufacturing is responsible for about 20 percent of carbon emissions and 54 percent of energy consumption. While Southeast Asia has become a global manufacturing and industrial hub, that growth leads to serious concerns for sustainability, rising dependence on fossil fuel imports and increased energy-related CO2 emissions. Southeast Asia has accounted for 11 percent of global energy demand growth since 2010, the IEA said, and it is projected to contribute more than 25 percent of the growth from now until 2035. Enhancing the region’s advantages as a manufacturing hub will require a reduction in its emissions intensity through clean electrification and greater use of renewable energy or low-emissions fuels.
Global Efficiency Intelligence similarly noted that the manufacturing industry in Southeast asia is one of the top global emitters of greenhouse gas (GHG) emissions. Moreover, it accounts for 27-35 percent of total annual CO₂ emissions in Malaysia, Thailand, Indonesia, Vietnam, and the Philippines. Manufacturing is the largest consumer of energy among major economic sectors and is projected to remain the top energy consuming sector in the region in 2040. GHG emissions are projected to grow substantially.
In Vietnam, for instance, Tech Collective said manufacturing has been the primary driver of the nation’s economy for decades. The country has become a magnet for semiconductor and advanced electronics and will likely soon account for manufacturing of 65 percent of Apple’s AirPods, 5 percent of MacBooks, and 20 percent of iPad tablets and Apple Watches.
The Climate Impact is Growing Faster
While the ASEAN Centre for Energy noted that the manufacturing industry sector in ASEAN plays a pivotal role in economic development, generating employment opportunities and contributing to national revenue, it is also the most energy intensive. The industry’s energy demand is projected to quadruple by 2050, which will hinder ASEAN’s pursuit of Net Zero emissions. Only 15 percent of the industry’s energy consumption is derived from renewable sources. The energy intensity and usage patterns pose environmental challenges linked to climate change and air pollution, and it also jeopardises long-term energy security.
Three-quarters of the energy used in the manufacturing industry is in process heat, according to the IEA, with the rest used for mechanical work or day-to-day operational electricity. About 48 percent of the process heat is high-temperature, which is for material transformation processes. 30 percent of the process heat is low-temperature and 22 percent is medium-temperature. The sector’s reliance on high-temperature processes makes it particularly resistant to decarbonisation.
If ASEAN can take steps to reduce fossil fuel usage, it can reduce costs, enhance productivity and minimise downtime caused by equipment maintenance or inefficient operations. The US Department of Energy has found that businesses can save 30% on energy bills through energy-efficient measures.
Start-ups have Solutions
Manufacturers and their service providers in Southeast Asia are rising to the challenge by embracing AI and Machine Learning as well as other solutions to meet their ESG goals and to support sustainable growth, ABI Research found. In the automation industry, for instance, Schneider Electric is developing new technologies for electrification, automation, and digitisation by leveraging AI-driven analytics to optimise operations and increase efficiency.
Along with large companies such as Schneider Electric, a slew of start-ups and small companies are also developing solutions that help manufacturing firms reduce energy usage and increase efficiency.
In Singapore, for instance, Unravel says it provides manufacturing companies with reliable data on their global emissions so they can measure, reduce, and report them. Clients can streamline ESG data collection across production and procurement processes, make supplier engagement more effective and transition to sustainable manufacturing by modelling decarbonisation initiatives. Visualising the impact and ROI of these initiatives also supports capital planning and capital expenditure decisions.
Aleph Tech in Indonesia has developed an AI solution to optimise chemical manufacturing that it says improves energy efficiency by 28 percent and production efficiency by 30 percent.
Back in Singapore, SixSense, a cloud-based platform for defect analysis and visual inspection, has developed an AI-powered platform for the manufacturing industry that leverages technologies such as factory data analytics, computer vision, equipment monitoring and IoT analytics to predict and resolve defects and variability in product quality.
Avanseus uses cloud-based software with an AI interfaced business intelligence platform for predictive maintenance that provides solutions for image recognition and video analysis. It uses deep learning to provide insights, content and context behind the images, detect anomalies and analyse the impact.
Zuno’s carbon intelligence platform enables clients to understand their carbon emissions so they can optimise operations, reduce carbon emissions and report on their emissions data. While carbon accounting is a necessary first move, Zuno said it is carbon intelligence that provides actionable insights for carbon emissions reduction.
In Thailand, Bangkok Bank said, CarbiCrete aims to clean up the construction industry, which relies heavily on cement and is known to have a major environmental impact. CarbiCrete produces cement-free carbon-negative concrete using mineral waste and CO₂.
BIG, a climate technology company, partnered with Delta Electronics (Thailand) to advance the decarbonisation of Thailand's electronics industry. The collaboration introduces BIG's low-carbon nitrogen for the production of electronic components and parts.
While implementing solutions from these and other providers will take time and incur costs, these start-ups can enable clients to improve environmental sustainability and profitability in the longer term by reducing energy usage and waste, cutting costs and decreasing GHG emissions.
