Rising coal demand overshadows Southeast Asia’s transition to renewable energy in Commodity News 26/01/2026 Southeast Asia’s demand for coal is growing faster than anywhere else in the world, undermining efforts to lower carbon emissions that contribute to global warming. Regional coal demand will rise by more than 4% a year through the end of the decade, driven by rising needs for electricity as economies grow across the region of more than 600 million, according to a recent International Energy Agency report. Indonesia, a nation of about 285 million people, will account for more than half of that, followed by Vietnam. The trends raise questions over the $15.5 billion-dollar deals both countries signed in 2022 in Just Energy Transition Partnerships, or JETP, to help fund their renewable energy transitions. Moves under U.S. President Donald Trump to reverse policies meant to address climate change add to the challenges. The trends raise questions over the $15.5 billion-dollar deals both countries signed in 2022 in Just Energy Transition Partnerships, or JETP, to help fund their renewable energy transitions. Moves under U.S. President Donald Trump to reverse policies meant to address climate change add to the challenges. This is a decisive decade for Southeast Asia as the region bears much of the burden of extreme weather and other impacts from climate change. “We’re standing on two opposite grounds — wanting to build clean energy, but not letting go entirely of coal,” said Katherine Hasan, an analyst with the Centre for Research on Energy and Clean Air, a Finland-registered think tank. Coal emits more planet heating emissions than other fossil fuels like oil and gas when it is burned. Pollution from coal also adds to toxic haze that often blankets many Southeast Asian cities. Southeast Asia’s coal dependence lingers Coal supplies just over a third of Southeast Asia’s electricity, the IEA says, making it the third-largest coal-consuming region in the world after India and China. Global coal demand is expected to plateau as alternatives expand and major coal buyers like South Korea cut back. But Southeast Asia is headed in the opposite direction. The two main factors driving that trend are cost and energy security. “Nobody burns coal for fun,” said Paul Baruya of FutureCoal, a group backed by the fossil fuel industry, formerly known as the World Coal Association. “Coal still underpins a level of energy security that the region needs,” he said, noting that coal cutbacks would mean writing off billions of dollars’ worth of fossil fuel-related infrastructure including power plants and mines. A recent regional survey by Singapore’s ISEAS–Yusof Ishak Institute found a growing public preference for delaying giving up coal until 2030 or even 2040, as concerns over adequate power supplies and costs counter worries about climate change. Governments across the region are echoing that logic. “What is important is that our government is firm in its stance that there will be no phase-out of fossil fuels,” said Hashim Djojohadikusumo, brother to Indonesian President Prabowo Subianto and the country’s special climate envoy, last month. “We’ve rejected that; we’re sticking with a phase-down,” he said. “Indonesia’s economy, especially its industry and electricity sector, will continue to rely on fossil fuels.” Indonesia backtracks on coal phase out Indonesia is the world’s largest coal exporter and Southeast Asia’s biggest carbon emitter making it vital f