Asian countries are turning back to coal as disruptions from the war involving Iran squeeze oil and gas shipments through the Strait of Hormuz, a chokepoint for roughly one-fifth of global oil and natural gas trade.
LNG — natural gas cooled to a liquid for transport — has been promoted as a bridge fuel away from oil and coal and the U.S. has been expanding exports to Asia. It burns cleaner than coal but still emits greenhouse gases and methane. With LNG supplies uncertain, several Asian governments are increasing coal-fired generation to cover immediate shortfalls.
India is burning more coal to meet higher summer demand and to cover a peak load projected around 270 gigawatts. South Korea has lifted caps on electricity from coal when gas supplies are tight. Indonesia, the world’s largest coal exporter, is prioritizing domestic use over exports, tightening regional supplies. Thailand, the Philippines and Vietnam are also boosting coal power. Two shipments of liquefied petroleum gas to India, totaling more than 92,700 tons, recently passed through the Strait of Hormuz; such imports may be directed to industry rather than power, reducing relief for electricity generation.
Experts say coal is a short-term fix that risks worsening air pollution, slowing the renewable transition and increasing planet-warming emissions. Julia Skorupska of the Powering Past Coal Alliance called the crisis “a real sort of warning.” Sandeep Pai of Duke University noted coal’s wide availability in Asia makes it the default backup when renewables or gas fall short. Michelle Manook of FutureCoal argued that without coal the shortfall would be worse and urged diversity in energy sources. Pauline Heinrichs of King’s College London warned that using coal to offset, for example, hydropower drought shortfalls can exacerbate the very emissions that drive climate disruption.
China, the world’s largest coal consumer and producer, has added record coal power capacity since 2021 to shore up energy security and still includes coal in national policy despite large clean-energy deployments. India has coal stock for only about three months, with some reserves earmarked for small businesses. Coal prices are set on global markets, exposing importers to volatility; the benchmark Newcastle coal price has risen about 13% since the war began. Vietnam, which boosted imports after weather-driven shortfalls, now faces uncertainty from Indonesia’s export cutbacks and is considering U.S. and Laos supplies.
Indonesia’s decision to favor domestic use could tighten supplies and push prices higher, said Putra Adhiguna of the Energy Shift Institute. But more coal does not guarantee cheaper or more reliable power, Russell Marsh of E3G cautioned. Coal-fired electricity is becoming costlier in some places: IEEFA found coal power in Indonesia was 48% more expensive in 2024 than in 2020, driven by aging plants and higher operating costs. Subsidies to the national utility rose 24% to about $11 billion, roughly 5% of the national budget.
Reliance on coal now may slow long-term phase-outs. Indonesia has struggled to retire plants early even before the conflict. Jakarta had promoted LNG to ease coal dependence; the renewed pivot to coal “sends a signal” that switching fuels is harder than expected, Adhiguna said. South Korea, which pledged to retire most coal plants by 2040 and halve emissions by 2035, is allowing more coal use when air pollution is low and LNG is scarce. Renewables supplied only about 10% of South Korea’s electricity in 2024 versus a global average near 32%, and over the past decade-plus Seoul has committed heavily to fossil fuels — roughly $127 billion in support over 11 years, according to Solutions for Our Climate — raising concerns about precedent and lock-in.
Health impacts are immediate. Coal combustion emits fine particulate matter (PM2.5) that penetrates deep into lungs and the bloodstream, raising risks of heart disease, stroke, lung cancer and chronic respiratory illness, the World Health Organization says. Poor air quality is already widespread across Asia, worsened seasonally by agricultural burning. The Energy Policy Institute at the University of Chicago reported that all 1.4 billion Indians breathe air with PM2.5 concentrations above WHO safe limits; New Delhi and other cities repeatedly suffer hazardous smog. Vietnam also faces PM2.5 far above recommended levels. Shopowner Lan Nguyen in Hanoi said coal is essential now but expressed daily worry for her asthmatic son’s health.
Policy and finance choices matter for how long the coal rebound lasts. South Korea’s increased coal use during the crisis could set a precedent that persists beyond immediate shortages, warned Joojin Kim of Solutions for Our Climate. For countries with little domestic coal capacity, like Thailand, the immediate effect on electricity prices may be limited because coal represents a small share of generation.
The current shift underscores energy security tensions: coal provides short-term resilience but heightens long-term exposure to price swings, pollution and emissions that deepen climate risks. Many analysts stress that accelerating renewables and diversifying supply — including strengthening LNG logistics where feasible and improving storage and grid flexibility — are the sustainable responses to avoid repeating the cycle of crisis-driven coal dependence.