Why is coal demand growing in Southeast Asia?

Coal demand is rising in Southeast Asia due to increasing needs for electricity driven by economic growth and a focus on energy security.

What are the Just Energy Transition Partnerships (JETP) for Indonesia and Vietnam?

JETP are $15.5 billion deals signed by Indonesia and Vietnam in 2022 to help fund their transitions to renewable energy sources.

How does Southeast Asia's coal use compare globally?

Southeast Asia is the third-largest coal-consuming region globally, after India and China, with demand growing faster than anywhere else.

Home / Business and Economy / Southeast Asia's Coal Addiction Fuels Climate Crisis

Southeast Asia's Coal Addiction Fuels Climate Crisis

22 Jan

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Summary

Southeast Asia's coal demand outpaces global growth, endangering climate goals.
Indonesia and Vietnam's $15.5 billion green transition deals face coal challenges.
Rising coal use in Asia is driven by cost and energy security concerns.

Southeast Asia's Coal Addiction Fuels Climate Crisis

Southeast Asia is experiencing the world's most rapid increase in coal demand, jeopardizing efforts to curb carbon emissions. This surge is projected to continue at over 4% annually through 2030, fueled by economic expansion and growing electricity needs across the region. Indonesia and Vietnam are at the forefront of this trend, accounting for a substantial portion of the projected rise.

These developments cast doubt on the $15.5 billion Just Energy Transition Partnerships (JETP) signed by Indonesia and Vietnam in 2022. The agreements aim to fund renewable energy transitions, but the persistent reliance on coal, driven by cost and energy security concerns, presents a significant obstacle.

Coal remains a critical energy source for Southeast Asia, supplying over a third of its electricity. While global coal demand is expected to plateau, the region is moving in the opposite direction. This is partly due to a public and governmental preference for "phase-down" over immediate "phase-out" of fossil fuels, prioritizing energy security and economic stability.