Eight out of ten ASEAN member states have adopted net-zero commitments: Brunei, Cambodia, Laos, Malaysia, Singapore, and Viet Nam target net-zero emissions by 2050, Indonesia by 2060, and Thailand by 2065. However, the region's installed coal-fired power capacity still reached 121 GW in 2025, while ASEAN coal consumption is projected to increase by 5% in 2026 to 547 million tons.
There are concrete reasons behind this trend, and the answer varies by country. The three cases below broadly illustrate the pattern.
Indonesia: Nickel for EVs, Coal for Smelting
Indonesia added 1.9 GW of new coal-fired power capacity in 2024, the third-largest increase in the world after China and India. Around 80% of this new capacity consisted of captive power plants dedicated to industrial zones processing nickel, cobalt, and aluminum.
Indonesia's captive coal capacity tripled from 5.5 GW in 2019 to 16.6 GW by the end of 2024, with most of it concentrated in nickel industrial parks in Sulawesi and North Maluku. Ironically, much of this demand originates from the global electric vehicle battery supply chain.
Indonesia's 2024–2060 national power development plan even projects the addition of 26.7 GW of coal-fired power capacity over the next seven years, with 75% consisting of captive power plants.
Growing electricity demand also reinforces coal's position. Under the 2025–2034 Electricity Supply Business Plan (RUPTL) released by the Ministry of Energy and Mineral Resources in May 2025, even the most ambitious renewable energy acceleration scenario still projects coal to account for 46.8% of the national electricity mix by 2034. Although this is down from the current 64.2%, coal would remain the largest source of electricity generation.
There are also significant financial constraints. Many recently built coal-fired power plants are still carrying outstanding construction debt. The unrecovered capital tied up in Southeast Asia's entire coal fleet is estimated to exceed USD 130 billion as of 2025.
This means that retiring these plants early would result in direct financial losses for both operators and their financiers.
Viet Nam: No New Coal, But Old Projects Continue
Viet Nam presents a different case. Under its Power Development Plan VIII (PDP8), the country has committed not to approve any new coal-fired power projects after 2030.
Coal plants that have been operating for 20 years are expected to be converted to biomass or ammonia, while those that have operated for more than 40 years and cannot be converted must be retired. By 2050, all coal-fired power capacity is expected to have either been converted or taken offline.
The projects currently moving forward are those that entered construction before PDP8 was adopted in 2023.
One example is Vung Ang II, a 1.32 GW power plant in Ha Tinh that was inaugurated in April 2026. The project was developed by a consortium of Mitsubishi Corporation (60%) and KEPCO (40%) under a USD 2.2 billion build-operate-transfer scheme, with construction having started in 2021.
Under the PDP8 framework, the plant is scheduled to begin fuel conversion around 2046, roughly two decades earlier than the normal economic lifespan of a coal-fired power plant.
At the same time, Viet Nam remains heavily dependent on coal to meet rapidly growing electricity demand. As of October 2024, coal still accounted for 48.7% of the country's total electricity generation, and more than 10 GW of new coal-fired capacity remains in the PDP8 pipeline.
That demand pressure is not new. Viet Nam's electricity consumption has increased eightfold over the past two decades, with coal supplying most of the additional demand. This sustained growth is projected to make Viet Nam the world's fifth-largest coal importer in 2025, making it one of the newest countries to enter that ranking.
Philippines: A Moratorium with Loopholes
The Philippines imposed a moratorium on new greenfield coal-fired power plants in October 2020. However, the moratorium is not retroactive. Projects that had already been classified as committed before 2020 were allowed to proceed, and the Department of Energy has repeatedly clarified that the policy does not constitute a total ban on coal.
Several companies have also taken advantage of an "expansion" provision for existing coal plants, allowing them to add capacity without technically violating the moratorium. One such case was even reported to the Ombudsman in 2024.
As a result, coal still accounted for 62% of the Philippines' energy mix in 2024, well above the government's target of achieving a 35% renewable energy share by 2030.
Behind those figures is an often-overlooked reality. Electricity consumption per capita in the Philippines remains far below the ASEAN-5 average. In 2024, it stood at around 1,045 kWh per person, compared with 5,474 kWh in Malaysia and 2,653 kWh in Thailand.
With peak electricity demand projected to grow by 5.3% annually through 2028, existing coal-fired power plants continue to serve as a key source of supply, as the grid is not yet prepared to accommodate significantly larger volumes of renewable energy in the near term.
The Structural Barriers to a Coal Exit
Beyond individual country cases, there is a structural challenge that applies across much of Southeast Asia: the region's coal fleet is still too young to be retired easily.
The average coal-fired power plant in Southeast Asia is only around 13–14 years old. Retiring these facilities early is not simply a political decision. It involves outstanding construction debt, long-term contracts with investors, and the cost of replacing existing generation capacity with cleaner alternatives.
The cost of retiring Southeast Asia's entire coal fleet before the end of its operational life is estimated at USD 277 billion, equivalent to roughly 13% of the region's combined GDP in 2022. This estimate is based on a minimum retirement cost of USD 1.9 billion per GW, using data from GEM, the IMF, and the World Bank.
The barriers to expanding clean energy are equally significant. The cost of capital for clean energy projects in Southeast Asia is currently at least twice as high as in advanced economies or China.
At the regional level, however, there are also signs of change. Around 12 GW of coal-fired power capacity was cancelled across Southeast Asia in 2024, while Indonesia was the only country in the region to submit proposals for new coal-fired power plants that year.
ASEAN has also adopted its 2026–2030 regional energy plan, which targets a 30% share of renewable energy in the primary energy mix.
Yet as long as legacy debts remain unpaid, existing project pipelines are still under development, and renewable energy capacity remains insufficient to replace baseload generation, net-zero commitments and new coal-fired power plants are likely to continue coexisting.
