Local content requirements in Asia’s Just Energy Transition: Neutralizing tensions with international economic law

Just Energy Transition Partnerships (JETPs) encourage coal-dependent emerging economies to phase out coal and transition to renewable energy. However, JETPs face significant obstacles, creating tensions with international economic law. Local content requirements (LCRs) represent a particularly problematic regulatory barrier to energy transitions. This article thus examines whether international economic law expedites or obstructs Asia’s energy transition, and whether LCRs are incompatible with international economic law. To answer these questions, this article juxtaposes LCR provisions in JETPs and domestic regulations in two case studies: Indonesia and Vietnam. It then contextualizes LCR costs and benefits before examining tensions with international economic law and potential state defences justifying LCRs. It culminates in suggesting how LCRs could be designed to neutralize such tensions. This article argues that international economic law complements, rather than collides with, energy transition goals and that LCRs are not anathema to international economic law, as long as they are designed and implemented in a non-discriminatory manner.