Asian countries are rapidly increasing their use of coal to counter soaring energy prices and supply shortages triggered by the recent conflict between the US, Israel, and Iran. While the move is likely to boost greenhouse gas emissions in the short term, analysts say the crisis could ultimately accelerate the region’s shift toward renewable energy.
“The ongoing Iran oil and gas crisis highlights the importance of domestic energy sources that are insulated from global commodity markets, which coal can provide,” said Amy Kong, research analyst at Zero Carbon Analytics. She added that countries such as Vietnam, which have rapidly expanded solar generation, are better protected from rising import costs.
Asia is particularly exposed to the current energy disruption. Over 80 percent of crude oil and liquefied natural gas (LNG) transiting the Strait of Hormuz is destined for the region, according to the US Energy Information Administration. Countries including Pakistan, India, and Bangladesh rely heavily on LNG imports from Qatar, whose export capacity fell 17 percent last week following Iranian attacks. Doha has warned it may declare force majeure on some long-term LNG contracts for up to five years.
The situation is exacerbated by limited gas storage infrastructure in much of Asia, leaving nations vulnerable to price spikes. As a result, governments are turning to coal, which can be sourced domestically or regionally, to maintain power supplies and protect households from steep energy costs.
In South Korea, restrictions on coal-fired generation have been lifted, while Thailand is preparing to restart two coal plants decommissioned last year. In India, coal is increasingly being used as a substitute for cooking gas, and in the Philippines, Energy Secretary Sharon Garin confirmed plans to expand coal, domestic gas, and renewable generation. The surge in coal demand has also pushed global prices higher and sparked discussions of a windfall tax in Indonesia, which recently reversed a plan to cut production.
Environmental experts warn that the pivot to coal carries serious consequences. “The shift will impose substantial environmental and public health costs,” said Dinita Setyawati, senior energy analyst at Ember. Coal remains one of the largest contributors to planet-warming emissions and a major source of air pollution.
Analysts argue the crisis also exposes the limits of LNG as a “transition fuel.” While LNG plants can be cheaper upfront than renewables, the long-term costs and supply vulnerabilities are increasingly apparent. “The story of gas as a stable transition fuel is highly in question,” said Putra Adhiguna, managing director at the Energy Shift Institute.
He noted that while temporarily boosting coal capacity may be a short-term solution, financial institutions are hesitant to fund new coal projects due to the risk of stranded assets amid global climate commitments. This could shift policymaker focus back to renewables. “The security-of-supply issue is likely to override previous concerns about upfront costs for renewable energy,” Adhiguna said, adding that Southeast Asian countries are already showing signs of such a pivot.
The current energy crunch underscores a paradox: while coal use is rising temporarily, the crisis could ultimately strengthen the case for cleaner, more resilient energy systems across Asia.
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