Key facts
- Asian nations are increasing coal use and investment due to energy security concerns stemming from the Iran war.
- The conflict has led countries like South Korea, Japan, Thailand, Vietnam, and the Philippines to burn more coal.
- Global coal investment is projected to reach $180 billion in 2026, the highest level since 2012.
- Despite renewable energy growth, the Iran war has reinforced coal's importance for energy security in Asia.
- South Korea and Japan are also increasing nuclear power generation and restarting idled reactors.
- India plans significant investment to convert coal into industrial fuels and chemicals.
Asian nations are increasingly turning to coal and other fossil fuels to secure energy supplies amid price shocks and supply disruptions caused by the Iran war, potentially compromising their climate change commitments. While renewable energy deployment continues, the conflict has reinforced coal's role as a critical component of energy security in the region.
Countries in Southeast Asia, such as Thailand, Vietnam, and the Philippines, have increased their reliance on coal to power their grids, especially after the Strait of Hormuz closure disrupted oil and gas flows. This emergency response is leading to longer-term policies that extend the life of coal power. Global investment in coal is projected to rise significantly, reaching $180 billion in 2026, the highest level since 2012.
In East Asia, South Korea and Japan have burned more coal and are delaying the retirement of existing plants. South Korea is also increasing nuclear power generation and speeding up maintenance on offline reactors. Japan is continuing to restart nuclear plants idled after the 2011 Fukushima disaster. India plans substantial investment to convert coal into industrial fuels and chemicals, aiming to replace imported products.
Despite these trends, renewable energy still dominates growth in regional power generation. Indonesia, a major thermal coal exporter, is pursuing ambitious solar goals while also overhauling its trade rules and imposing new taxes on coal. Similarly, Vietnam and the Philippines are seeing record rates of rooftop solar installations, suggesting that the energy transition remains dynamic and contested, even amidst renewed focus on fossil fuels.