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Rising Coal Demand in Southeast Asia Challenges Clean-Energy Goals
MLN -22 JAN 2026: Southeast Asia’s need for coal is growing faster than anywhere else in the world, threatening efforts to cut carbon emissions and transition to renewable energy, according to the International Energy Agency and regional officials.
Regional coal demand is projected to increase by more than 4 percent annually through 2030, driven by rising electricity needs as economies expand, the IEA said. Indonesia and Vietnam are expected to be the largest contributors to the growth, with Indonesia accounting for more than half of the increase.
The continued reliance on fossil fuel energy complicates implementation of Just Energy Transition Partnership agreements worth $15.5 billion signed in 2022 to support clean energy initiatives, according to energy analysts familiar with the data. Persistent use of coal also raises questions about meeting climate goals set under international frameworks.
Despite significant investments in solar capacity in some nations, record-high coal imports were recorded in 2025, reflecting concerns about energy security after past power shortages, the IEA said.
Indonesia, the world’s largest coal exporter, has backtracked on its pledge to phase out coal by 2040 and is considering new coal power plants to meet demand, the report showed. Vietnam’s increasing solar capacity has not yet offset its rising coal imports.
Affordability and reliability of coal power, combined with political resistance to phasing out fossil fuel infrastructure, continue to support the region’s dependence on coal despite long-term climate objectives, the agency added.
Coal supplies just over a third of Southeast Asia’s electricity, making the region the third-largest coal consumer globally after India and China, according to the IEA.
The trend comes as countries worldwide pursue renewable energy expansion and reduce greenhouse gas emissions, but Southeast Asia’s growing coal use could slow progress toward shared climate targets.
