Southeast Asian countries, including Vietnam and the Philippines, are poised to significantly increase their coal consumption and trade in the coming decade, driven primarily by the rapid growth of data centers. This trend is unfolding even as global demand from major consumers like China nears its peak.
Reuters reported that according to the Indonesian Coal Miners Association (ICMA), imports by China and India are expected to reach their maximum levels in 2025, marking the end of growth in global seaborne trade volumes of coal. However, the association anticipates annual coal imports by Southeast Asian nations, including Vietnam and the Philippines, to rise by nearly 3% per year, reaching 170.9 million metric tons by 2030.
Vietnam, the region’s fastest-growing economy, is emerging as the most promising market for coal-fired power generation. State-run Vinacomin expects to import 66 million tons of coal by the end of this year, up from 47.8 million tons in 2023. The company anticipates peak imports of 86 million tons per year by 2035.
The Philippines and Malaysia have also witnessed substantial increases in coal imports. The Philippines’ imports have grown by 7.6% in the eight months ending August 31, while Malaysian shipments have risen by 4%.
While Southeast Asian countries are poised to become key growth markets for coal exporters, industry officials still expect consumption in larger economies like China and India to remain high. Thermal coal imports by China are projected to increase by 6.3% in 2024, reaching 391 million tons. India’s coal imports are also expected to continue growing throughout the decade.
Although Southeast Asian countries are not adding new coal-fired power plants, they are ramping up utilization of existing facilities to meet rising electricity demand. Data centers, in particular, are emerging as significant drivers of this growth.
In Malaysia, reliance on coal for power generation has increased at the expense of natural gas. Indonesia, another major contributor to coal consumption in the region, is seeing a surge in demand from nickel smelters, which supply battery manufacturers.
Despite the growing reliance on coal, Southeast Asian countries lag behind major green energy producers like China and India in terms of renewable energy penetration. The lack of progress on international plans to provide cheaper financing for early retirement of coal-fired power plants has hindered efforts to reduce emissions in the region.
