Iran war turns Asia toward diversifying energy supplies, undermining
climate goals
[June 30, 2026] By
ANTON L. DELGADO
BANGKOK (AP) — Asian nations hit hard by the Iran war's price shocks are
rushing to diversify and strengthen their energy security, potentially
undermining their commitments to curb climate change.
As negotiations on ending the war drag on, countries in energy hungry
Southeast Asia are exploring nuclear power and promising renewable
rollouts. But they are also investing in coal power to provide a buffer
during times of crisis.
The Iran war has not shaken coal's status as a pillar of Southeast
Asia’s energy security, said Sandeep Pai at Duke University’s Nicholas
Institute for Energy, Environment and Sustainability.
Until recently, coal was slowly being phased out to reduce climate
change-causing emissions and address air quality concerns. But the
conflict has complicated that scenario.
“At the end of the day, energy security triumphs any other climate
considerations,” Pai said.
Iran war alters the future of coal in Asia
In East Asia, South Korea and Japan began burning more coal to keep
national energy grids powered while the closure of the Strait of Hormuz
due to the war disrupted flows of oil and gas to Asia.
Southeast Asian nations like Thailand, Vietnam and the Philippines did
the same.
This emergency response has led to longer-term policies that have given
coal an extension of life, Pai said.
Coal investments are predicted to rise globally to $180 billion in 2026,
according to the International Energy Agency, which is the highest its
been since 2012.
In 2021, the United Nations declared coal had been consigned to history
after nearly 200 countries agreed to phase out coal power. After
Russia’s 2022 invasion of Ukraine disrupted gas supplies, European
nations burned more coal and built more fossil fuel pipelines and import
terminals.
Now, this second energy shock in less than a decade is reinforcing
coal's value to energy security in Asia, according to Michelle Manook of
FutureCoal, a group backed by the fossil fuel industry that was formerly
known as the World Coal Association.
Global coal-fired power generation declined by 0.6% last year, according
to the Global Energy Monitor, but new coal power capacity increased
3.5%.
Southeast Asia eyes fossil fuels and rooftop solar
Indonesia, the world’s largest thermal coal exporter and a bellwether
for the fossil fuel industry, is overhauling its trade rules and
imposing new taxes after coal prices hit multi-year highs.
But it’s also chasing new solar goals, planning to install 100 gigawatts
of rooftop solar by 2034, up from 1.3 gigawatts of capacity now.
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A team of solar installers set up a new rooftop solar system
at a home in Manila, Philippines, on May 1, 2026. (AP Photo/Anton L.
Delgado, File)
 “Indonesia’s obviously tied to coal
in so many ways, but it’s seen beyond that,” said Dave Jones, with
the energy think tank Ember.
Renewables still dominate growth in regional power generation, he
noted.
Likewise, Vietnam has increased its use of coal but also has
committed to installing rooftop solar on 10% of public offices and
homes nationwide by 2030.
After the war began, the Philippines burned more coal and declared a
national energy emergency. It considered lifting a ban on new coal
plants but decided not to. Earlier approved projects will still be
built.
In the meantime Philippine consumers have been putting up rooftop
solar in record rates.
"This really doesn't cancel out any of the green energy gains,” said
Brenda Valerio of the nonprofit New Energy Nexus in the Philippines.
“But it does really show that the energy transition is non-linear
and contested.”
A renewed focus on coal and nuclear power
Much of the liquified natural gas going through the Strait of Hormuz
went to South Korea and Japan, countries that import nearly all
their energy needs.
Facing a shortfall, South Korea delayed the retirement of three coal
plants, potentially slowing progress toward its climate goals. It
raised power generation at its active nuclear plants and sped up
maintenance at five offline reactors.
Japan has been pushing ahead with restarts of nuclear power plants
that were idled after the 2011 Fukushima meltdown, said Michiyo
Miyamoto with the Institute for Energy Economics and Financial
Analysis. That disaster led Japan to step up use of coal as those
plant closures temporarily cut its total generating capacity by
about a third.
India wants to spend $3.9 billion to convert coal into industrial
fuels and chemicals to replace imported products, maintaining its
use of coal.
Efforts to reduce emissions and hit net zero ambitions are long-term
campaigns that require years of effort and focus, said Luke Holt,
the Asia-Pacific director of energy for the consultancy firm Ramboll.
“But we see that they are easily distracted,” he said. “We’ve had a
number of shocks to the decarbonization plan.”
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