Several Asian governments have turned back to coal-fired power as disruptions tied to the war involving Iran threaten oil and gas flows through the Strait of Hormuz, a choke point for about one-fifth of global oil and gas trade. Liquefied natural gas (LNG) — promoted as a cleaner bridge fuel and increasingly exported from the U.S. to Asia — has become less reliable amid shipping risks, prompting some countries to lean on coal to cover immediate shortfalls.
Where coal use is rising
– India has increased coal burn to meet a higher summer peak now projected around 270 gigawatts. Officials say coal stocks are limited — roughly three months’ worth, with some reserves reserved for small businesses.
– South Korea has relaxed limits on coal generation when LNG supplies tighten and pollution levels allow. Seoul nonetheless faces a long-term challenge: renewables supplied only about 10% of its electricity in 2024, well below the global average, and past policy support has heavily favored fossil fuels.
– Indonesia, the world’s largest coal exporter, has prioritized domestic consumption over shipments abroad, tightening regional supply.
– Thailand, the Philippines and Vietnam are also boosting coal-fired generation to plug gaps left by constrained gas and weather-driven shortfalls in other sources.
Some gas and LPG shipments continue to transit Hormuz; two recent liquefied petroleum gas shipments to India totaling more than 92,700 tons passed through the strait, but those imports may be routed to industry rather than power generation, offering limited relief for electricity needs.
Short-term fix, long-term costs
Experts warn the coal pivot is a temporary resilience measure that carries significant downsides. Coal combustion increases air pollution and greenhouse gas emissions, risks slowing the clean-energy transition and can entrench fossil-fuel infrastructure. Observers describe the current episode as a warning that geopolitical supply shocks can prompt backward steps in emissions-reduction progress.
Analysts note regional coal availability makes it the default fallback when renewables underperform or gas is scarce. Some industry voices argue coal prevented a deeper supply gap and call for diverse fuel mixes to preserve energy security. But others point to evidence that more coal does not guarantee cheaper or more reliable electricity: in Indonesia, for example, coal-fired power became about 48% more expensive in 2024 than in 2020, driven by aging plants and higher operating costs. Subsidies to the national utility climbed roughly 24% to about $11 billion — around 5% of the national budget.
Market and supply impacts
Global coal markets are feeling the strain. Benchmark Newcastle coal prices have risen roughly 13% since the conflict began, exposing importers to volatility. Vietnam, which had increased imports after weather-related shortfalls, now faces uncertainty as Indonesia curbs exports and considers alternative suppliers like the United States and Laos.
Policy implications and health consequences
The renewed reliance on coal risks delaying planned retirements of existing plants and could create political and economic lock-in that makes future phase-outs harder. South Korea, which has pledged to retire many coal units by 2040 and cut emissions in half by 2035, is already allowing extra coal use during this crisis — a precedent that could persist beyond the immediate emergency.
Health effects from increased coal use are immediate and severe. Coal combustion emits fine particulate matter (PM2.5), which penetrates deep into lungs and the bloodstream and raises risks of heart disease, stroke, lung cancer and chronic respiratory illness. Air quality across much of Asia already exceeds World Health Organization guidelines: the Energy Policy Institute at the University of Chicago reports that all 1.4 billion Indians breathe air with PM2.5 concentrations above WHO safe limits, and cities like New Delhi frequently endure hazardous smog. Vietnam likewise faces PM2.5 levels well above recommendations. Residents in impacted cities report daily worry about vulnerable family members — for example, a shopowner in Hanoi says coal may be necessary now but fears for her asthmatic son’s health.
What comes next
The episode highlights trade-offs between short-term energy security and long-term climate and health goals. Many analysts argue the sustainable response is to accelerate deployment of renewables, diversify fuel and supplier options, strengthen LNG logistics where feasible, and improve storage and grid flexibility so systems can absorb shocks without reverting to higher-emitting options. Policy and financing choices made now will shape whether the coal resurgence is a temporary patch or a longer setback for the energy transition.