Confronting coal in Southeast Asia

Coal prices have been hitting all-time highs on the back of buoyant demand, with producers expanding production. The trend has exposed some vulnerabilities in climate action plans aimed at achieving net zero CO2 emissions. Is coal back in the game in Southeast Asia? 

Global coal-fired electricity motors are generating more power than ever before – all in response to strong electricity demand following the post-pandemic economic recovery and the surging price of gas. 

Also, Russia’s invasion of Ukraine has jacked up the price of coal as Europe looks for alternatives to Russian fossil fuels.  

As a result, “the investors in existing coal production make windfall profiting,” says Tim Buckley, an expert in climate energy finance and former Director of Energy Finance Studies, Australasia. Will this translate into new coal energy projects in the future?  

Coal prices have been hitting all-time highs. What effect is this having on coal-producing countries in Southeast Asia? Photo by Albert Hyseni on Unsplash  

Global mine production is likely to set a new record this year, confounding policymakers expecting it to diminish as part of net zero emissions plans. 

While many industrialized countries have been shutting down coal plants for years to reduce emissions, since the early 2010s, Southeast Asia's coal power capacity expansion has been, however, among the fastest in the world, following China and India.  

According to a study from Xu Chen at the Princeton School of Public and International Affairs, “power plants under construction and planned in Southeast Asia as of 2020 will more than double the region's fossil fuel power generation capacity. If all fossil fuel plants under development are built, Southeast Asia's power sector CO2 emissions will increase by 72% from 2020 to 2030 and long-term committed emissions will double.” 

Challenges for a green Southeast Asia 

“The big issue in Southeast Asia is lack of policy clarity and commitment by the individual governments,” Buckley says, also naming the fragmented nature of policies as a source of problems. 

Also, activism for climate change action can lead to imprisonment, leaving the policies and their execution at the mercy of the authoritarian rulers. 

In Vietnam, despite protests from the international community, as recently as June 17, a court sentenced Nguy Thi Khanh, Vietnam’s best-known environmental advocate, to two years in jail for tax evasion.  

The country’s foreign minister has refuted claims that her sentencing was linked to her anti-coal advocacy, but nevertheless, it sent a chill through clean energy advocacy groups in the country. Many point out that her imprisonment casts doubts on the government’s commitment to reduce emissions and move toward a green development strategy. 

Khanh, the founder of the Green Innovation and Development Center (GreenID) in Hanoi, was the first Vietnamese person to receive the Goldman Environmental Prize in 2018. She received recognition for her efforts in helping the Vietnamese government develop its seventh power development plan, which aims to lessen the nation's reliance on coal while boosting the intended proportion of renewable energy. 

Vietnamese environmentalist Nguy Thi Khanh. Image: Wikimedia Commons (https://en.wikipedia.org/wiki/File:Nguy_Thi_Khanh_-_2016.jpg)

With this change, Vietnam's annual carbon emissions were cut by 115 million metric tons, according to estimates. In the interim, Vietnam has created Southeast Asia's largest solar energy capacity. 

This follows Vietnam's commitment at last year's COP26 climate summit to achieve net zero emissions by 2050. The Vietnamese government is also struggling with its next 10-year Power Development Plan, which was supposed to be released in 2021 but has yet to be finalized due to disagreements over how to reduce fossil fuel use further and how much renewable energy to plan for. 

Similarly, in Cambodia, environmental activists face intimidation or even jail.  

"We were imprisoned for 10 months, now all six of us have been released on bail but we are not free," said Long Kunthea, a 23-year-old activist of the disbanded non-governmental organisation Mother Nature Cambodia (MNC). "We are still subject to judicial supervision, which limits our freedom." 

The international outcry and threat of sanctions did not persuade Cambodian authorities to drop the case. "I am concerned about the postponement of the trial in our case because it will affect our rights," Sun Ratha, another youth activist, said. "We want to have our hearing as soon as possible so that we can seek justice and have full freedom for all of us." 

Also, in Indonesia, Southeast Asia’s coal mining production hub, people opposing coal end up behind bars.  

In 2020, hundreds of coal activists protested in solidarity as two community leaders opposed the start of the Batang coal project and were sentenced to a seven-month prison sentence.  

Coal and the Ukraine-Russia war 

The Ukraine conflict has inevitable consequences on the energy policies in Southeast Asia, Buckley says. “Putin’s invasion has shown that supply chain security for fossil fuels cannot be taken for granted,” while “we just saw the International Energy Agency (IEA) release about supply chain”. 

Five pillars for government and industry action are identified in the report: diversify, accelerate, innovate, collaborate, and invest. While preserving strict environmental and labour norms, it suggests enhancing the effectiveness and speed of permitting and approvals for renewable energy projects and vital mineral production. It also asks for concerted actions to strengthen supply chain resilience, such as encouraging robust recycling businesses to lower the demand for raw materials and taking into account stocks for essential minerals, as has been done for oil for fifty years. 

Therefore, the current energy crisis, which is a result of sanctions against Russia should encourage Indo-Pacific nations to concentrate more on the switch away from fossil fuels, experts say. 

The Ukraine conflict has consequences on energy policies in Southeast Asia. Image: Wikimedia Commons (https://commons.wikimedia.org/wiki/File:Russian_Embassy_London_-_Ukraine_-_Anti-War_signs_27Feb2022_(2).jpg)

According to Buckley, Glasgow Financial Alliance for Net Zero, a global coalition of leading financial institutions in the UN's Race to Zero has a critical role in Southeast Asia’s plans to decarbonize. 

“The coalition has 130 trillion dollars of collected assets under management and they have pledged investment and management practices aligned with that so they will not support the coal,” he adds.  

In sum, despite the turmoil in the coal markets, the roadway to green solutions in the region seems to have been determined by global finance markets.  

Because China, India, South Korea, and others pledged not to provide any new finance for fossil fuel, the Southeast Asian governments will be “more than happy to procure green energy projects [as] they want to obtain finance from the West”, Buckley says.  

The current crisis caused a delay in climate action, but with the new records, deteriorations in Artic Sea levels, emergencies, heat waves, floodings all over the world, “we will see even more urgent action in the future,” Buckley says.  

Banner image by Dominik Vanyi on Unsplash.   

- Asia Media Centre