Asian nations turn to coal as Iran war disrupts oil and gas shipments
Asian nations shift to coal power as Iran war disrupts LNG shipments, with Philippines declaring national energy emergency.
Objective Facts
Asian countries are turning to coal as the Iran war disrupts oil and gas shipments. India is burning more coal to meet higher summer demand. South Korea has lifted caps on electricity from coal. Indonesia is prioritizing using its domestic supply. Thailand, the Philippines and Vietnam are boosting coal-fired power. Philippine President Ferdinand Marcos declared a state of national energy emergency on Tuesday, citing risks to the domestic fuel supply and energy stability created by the Middle East conflict. The main price for coal used in Asia, called Newcastle coal from Australia, has risen 13% since the war began.
Left-Leaning Perspective
Burning more coal risks worsening smog in major cities, slowing the transition to renewable energy and increasing the region's planet-warming emissions. Coal is a short-term fix, experts say, while renewables are the long-term solution. Pauline Heinrichs, who studies climate and energy at King's College London, points to China's boosting use of coal to offset hydropower shortfalls due to droughts, worsening emissions that contribute to climate change. "You learn to respond to shocks generated by certain insecurities by reproducing the insecurity," she said. South Korea has committed $127 billion to fossil fuels over 11 years, 13 times more than it spent on renewables. South Korea still plans to phase out use of coal, but the recent moves could outlast the crisis, Kim said. "The concern is not just the decision itself. It is the precedent it sets." Climate-focused analysts emphasize that continued reliance on coal exposes Asia to future shocks, said Julia Skorupska of the global coalition Powering Past Coal Alliance. "This kind of crisis is a real sort of warning," she said. The left-leaning perspective also highlights that all 1.4 billion Indians breathe air with concentrations of these particles the WHO considers unsafe. The government has now paused air-quality rules, allowing restaurants to burn coal to ease a gas shortage. Environmentalists argue this reversal demonstrates how temporary supply shocks can trigger regressive energy policy, undoing years of climate commitments. The narrative centers on institutional lock-in: The Philippine government has entered into multiple PPAs with coal-fired power plants, creating a complex web of financial commitments that complicate any potential shift towards renewable energy. The long-term nature of these contracts means countries could be locked into outdated energy strategies while the rest of the world moves forward.
Right-Leaning Perspective
Coal is integral to Asia's emergency energy plans. Its wide availability in Asia makes it the default backup when renewables or gas fall short, said Sandeep Pai, an energy expert at Duke University. Energy security advocates note that India, the second-largest coal consumer and producer, is bracing for a scorching summer and will rely more on coal to meet peak demand of 270 gigawatts — nearly twice the electricity Spain can produce. It has enough coal for about three months, with some stockpiles earmarked for small businesses. Right-leaning or pragmatist commentary emphasizes feasibility and immediate needs. The war has countries shifting back to coal to cover LNG shortfalls. India is burning more coal to meet higher summer demand. As the crisis in West Asia continues to unfold, the reliance on coal has provided a buffer against potential energy shortages. The stability of coal supply has allowed India to mitigate the risks associated with fluctuating oil prices and ensure a consistent energy supply for its industries and households. The state of emergency was declared just hours after the country's energy secretary said the Philippines planned to boost the output of its coal-fired power plants to keep electricity costs down. The generation companies, the coal-powered plants, were asked to check how much they can increase their generation, calling it a "temporary measure." "If we are successful in implementing this, at least we can decrease the electricity rate hikes because of the conflict in the Middle East," she said. This perspective stresses that coal provides price stability and proven supply chains when LNG markets are volatile. The right-pragmatist view holds that renewable energy, while desirable long-term, cannot immediately replace coal capacity without causing economic hardship to households and industries already facing energy price shocks.
Deep Dive
The Iran war's disruption of Strait of Hormuz shipping has exposed a fundamental tension in Asian energy policy: rapid economic growth across India, China, and Southeast Asia has created massive electricity demand that existing infrastructure cannot meet through renewables alone, while simultaneous climate commitments created political pressure to expand clean energy. Coal bridges this gap immediately—it is abundant domestically in major Asian economies, requires no new export dependencies, and can be deployed quickly. However, this pivot reveals that the transition away from coal was always more fragile than headlines suggested. In 2023, South Korea needed a major renewable expansion of about 8 gigawatts of new wind annually to meet net-zero goals, yet growth has been slow, with renewables supplying just 10% of electricity in 2024 versus a global average of 32%. The geopolitical shock simply exposed existing gaps between renewable capacity and actual demand. What both perspectives miss or understate is the structural rigidity created by long-term coal contracts. Indonesia, Vietnam, and the Philippines are particularly affected by decades-long contracts that limit the flexibility of governments to pivot towards renewable energy sources, as they are obligated to honor commitments made to coal power plants. This means the coal pivot is not entirely a discretionary choice—some capacity is already contracted. The left emphasizes climate damage and health impacts; the right emphasizes immediate economic stability. Neither adequately addresses that the real constraint is financing and institutional change, not ideology. Renewable deployment in Asia requires attracting capital at cost-of-capital rates that currently favor wealthy nations, and solar project capital costs in Europe are 4-5% but in parts of Africa or Southeast Asia remain 12-15%, effectively doubling clean energy costs for the countries that need it most. What comes next will likely depend on three factors: the duration of the Iran war, the speed of renewable buildout in Asia (particularly grid infrastructure), and whether governments interpret this as justifying permanent coal expansion or genuine temporary crisis response. The Philippines explicitly framed increased coal output as a temporary measure starting April 1, with the energy secretary noting that success would decrease electricity rate hikes caused by Middle East conflict. If prices stabilize within months, the precedent may not hold. If the crisis persists, temporary measures risk becoming structural policy.