Rethinking coal phase-out in Asia and beyond - The Business Times
Published February 27, 2026
Rethinking the Coal Phase-Out in Asia and Beyond
The global energy landscape is undergoing significant changes as nations strive to meet climate goals and transition towards sustainable energy sources. Despite these efforts, the role of coal in the energy mix remains a contentious issue, particularly in Asia. The region continues to rely heavily on coal for electricity generation, prompting discussions about the pace and strategy of coal phase-out initiatives.
According to the International Energy Agency (IEA), coal remains a dominant source of energy in Asia. In 2021, coal accounted for approximately 53% of the total electricity generation in the region. This reliance on coal is driven by several factors, including energy security, economic development, and the availability of domestic coal resources. Countries like China, India, and Indonesia are among the largest consumers of coal, and their energy policies reflect a complex balancing act between economic growth and environmental sustainability.
China, the world’s largest coal producer and consumer, has made commitments to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. However, the country is also expanding its coal capacity. In 2021, China approved new coal power projects totaling 43 gigawatts (GW), indicating a continued investment in coal infrastructure. This expansion raises questions about the feasibility of China's long-term climate goals and the implications for global efforts to combat climate change.
India, the second-largest consumer of coal, faces similar challenges. The country’s energy demand is expected to rise significantly in the coming years, driven by population growth and industrialization. While India has ambitious renewable energy targets, including a goal of 500 GW of non-fossil fuel capacity by 2030, coal remains a critical component of its energy strategy. In 2021, coal-fired power plants generated about 70% of India’s electricity, highlighting the ongoing dependence on this fossil fuel.
Indonesia, another major coal producer, is also grappling with the dual pressures of economic growth and environmental sustainability. The country is one of the largest exporters of thermal coal, and its energy policies prioritize coal development to support economic growth. However, Indonesia has also set a target to achieve net-zero emissions by 2060, raising questions about the compatibility of continued coal investment with its climate commitments.
The International Renewable Energy Agency (IRENA) has noted that transitioning away from coal is essential for meeting global climate targets. The agency emphasizes that phasing out coal is not only necessary for reducing greenhouse gas emissions but also for minimizing air pollution and its associated health impacts. In many Asian countries, coal combustion is a significant source of air pollutants, contributing to health problems and environmental degradation.
To address these challenges, a growing number of Asian countries are exploring alternatives to coal. Renewable energy sources, such as solar and wind, are becoming increasingly competitive in terms of cost and efficiency. The IEA projects that solar power could become the largest source of electricity generation globally by 2030, with Asia leading the way in new installations. In 2021, solar energy accounted for approximately 14% of electricity generation in China and 10% in India.
Despite the potential of renewables, the transition away from coal is complex and requires careful planning. Policymakers must consider the economic implications of phasing out coal, particularly in regions where coal mining and coal-fired power generation are significant sources of employment and revenue. A just transition approach is essential to ensure that affected workers and communities receive the support they need during the transition to a low-carbon economy.
International cooperation and investment are also critical for facilitating the coal phase-out. Financial support from developed countries can help developing nations invest in renewable energy technologies and infrastructure. The recent COP26 climate summit highlighted the need for increased climate finance to support the transition in developing countries, with a focus on scaling up renewable energy deployment and phasing out coal.
Furthermore, countries are beginning to adopt policies aimed at reducing coal consumption. For example, the Philippines has announced plans to phase out coal-fired power plants by 2040, while Vietnam has set a target to limit coal capacity to 30% of its energy mix by 2030. These commitments reflect a growing recognition of the need to transition towards cleaner energy sources.
However, the pace of change varies significantly across the region. While some countries are making strides in reducing coal dependency, others remain entrenched in coal-based energy systems. The challenge lies in balancing the immediate energy needs of growing economies with the long-term imperative of climate action.
As the world moves towards a more sustainable energy future, the discourse around the coal phase-out in Asia and beyond is evolving. Stakeholders must engage in constructive dialogue to find solutions that align economic growth with environmental sustainability. The path forward will require innovation, investment, and a commitment to collaboration among nations.
In conclusion, the coal phase-out presents both challenges and opportunities for Asian countries. While coal continues to play a significant role in the energy mix, the transition towards renewable energy is gaining momentum. Policymakers, industry leaders, and communities must work together to navigate this complex landscape and ensure a sustainable energy future for all.
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