The IEA’s recent report on Southeast Asia reveals an uncomfortable truth: coal remains indispensable for regional energy security, challenging plans for accelerated decarbonization.
The release of the ASEAN Energy Security Review 2026 report, prepared by the International Energy Agency (IEA), brought a reality check to the global energy transition debate. While the world pushes for the rapid phase-out of fossil fuels, the document shows that for Southeast Asian nations, mineral coal remains the foundational pillar supporting industrial growth and electrical stability.
For countries like Indonesia, Vietnam, and the Philippines, the issue is not just climatic, but one of economic survival. With electricity demand projected to grow by 5.4% per year through 2030, the region faces the dilemma of balancing the expansion of renewable sources with the urgent need for baseload power capable of supporting the growth of data centers and accelerated urbanization.
The Strategic Role of Coal in Times of Crisis
Regional dependence on coal became evident during the geopolitical tensions of 2026, when disruptions in liquefied natural gas (LNG) supplies through the Strait of Hormuz forced Asian nations to resume or expand the operation of coal-fired power plants. The IEA noted that, faced with a scenario of scarcity, energy security spoke louder than the speed of decarbonization.
The energy transition does not happen in an economic or geopolitical vacuum. It must take into account factors such as supply reliability, costs for consumers, availability of natural resources, and technological maturity.
This pragmatic stance by the agency highlights that renewable infrastructure—sometimes hindered by transmission bottlenecks and intermittency—does not yet offer, on its own, the necessary robustness for economies in full industrial development.
Challenges Beyond the Electrical Matrix
Beyond power generation, coal sustains essential supply chains. Indonesia, responsible for a significant share of global nickel production, exemplifies how the extraction of critical minerals—vital for the manufacturing of electric vehicle batteries—is still deeply tied to the intensive use of coal-fired energy.
For experts, the debate needs to evolve beyond the simple replacement of sources. Fernando Luiz Zancan, president of the Brazilian Association of Sustainable Carbon (ABCS), points out that the report ignores the potential of coal chemistry. For the sector, the future of the input involves technological modernization and the diversification of its uses.
Zancan highlights:
In Brazil, which is entirely dependent on fertilizers and sulfur, there is no discussion that we can produce them competitively and in an environmentally safe manner using domestic coal.
The expert reinforces the view that coal can be a vector for industrial sovereignty when integrated with carbon capture and utilization (CCUS) technologies.
The trajectory of emerging economies indicates that the transition to a clean matrix will be a gradual and heterogeneous process. The success of this journey will depend on countries’ ability to balance emissions reduction with the maintenance of a reliable electrical system, preventing the rush for global targets from resulting in energy vulnerability and social instability.
The future of ASEAN, therefore, is not a binary choice, but rather a complex combination of technical innovation and economic realism.