August 3, 2020 Read More →

Southeast Asian nations pulling out of coal, putting pressure on China


The use of coal as an energy source is steadily declining in the U.S. and Europe, but coal mining and the construction of coal-fired power plants continues across South and Southeast Asia.

The technology and funding come primarily from three countries — South Korea, Japan, and China — and are destined for nations including Indonesia, Vietnam, Bangladesh and the Philippines. Each of the latter has more than 10,000 megawatts (MW) of coal-fired power plants in various stages of development.

“It’s very significant because those Japanese banks have historically been amongst the biggest financers of coal fired power in Southeast Asia,” said Simon Nicholas, an energy finance analyst at the Institute for Energy Economics & Financial Analysis (IEEFA), a U.S.-based think tank. “South Korea, too, definitely does seem to be moving away from the financing of coal overseas with this Green New Deal.”

While the details are still being set, analysts say these moves could negatively impact the financial prospects for future coal power plant development across the Asia-Pacific region, the last major growth market for the fossil fuel.

It could also increase pressure on China, which faces several key decisions on the future of its massive Belt and Road Initiative, under which several coal projects are being pursued.

“I think China will be the last country [financing] coal power in Asia,” Nicholas said. “How much they care about that remains to be seen.” 

[Nithin Coca]

More: Business risk and COVID-19 are pushing Asian financiers away from coal

Posted in: IEEFA In the News

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