By Lidy Nacpil
A few years ago, the world seemed poised to end its reliance on coal, the most carbon-intensive fossil fuel and a primary contributor to carbon dioxide emissions. The momentum against coal was undeniable, marked by the shrinking of new coal projects and the shutdown of existing ones, global commitments to halt coal construction, and a shift towards renewable energy. Yet, despite these gains, coal has made a resurgence, driven by demand growth in developing economies and exacerbated by geopolitical crises. From 2015 to 2021, significant progress was made in curbing coal usage. More than half of the countries operating coal power reduced their capacity or kept it flat, with coal plant construction collapsing by 76 percent. Major public and private financial institutions began divesting from coal, recognizing the economic and environmental unsustainability of coal-based energy. Cheaper renewable alternatives like wind and solar power further downgraded coal investments, making them increasingly costly and unappealing.
However, the tide has since turned. Global coal use and capacity rebounded in 2022 and reached an all-time high in 2023. Developing economies, particularly in Asia, have driven this increase as they grapple with rising energy demands. Countries like China, India, and Indonesia now account for over 70 percent of global coal production. Even nations with ambitious renewable energy targets, like China and India, have substantially increased coal consumption. The energy crisis sparked by the war in Ukraine played a pivotal role in the resurgence of coal and gas. With global energy supplies strained, coal and gas became the go-to solutions for securing power. Asian countries ramped up coal production, and some European nations, facing energy shortages, revived dormant coal plants or lifted restrictions on coal production. As a result, fossil fuels, including coal, dominated global energy demand in 2022, holding a 35 percent share in the power sector, despite the record growth in renewable energy.
The resurgence of coal in Asia is not an isolated phenomenon. It coincides with a massive expansion of fossil gas infrastructure, particularly in Southeast Asia. Over 60 percent of the world’s gas-fired capacity under development is in Asia, with governments in the region pursuing gas to meet rising energy demands. Japan’s megabanks and state financial institutions, like the Japan Bank for International Cooperation (JBIC), are leading financiers of this gas expansion. Public financial institutions and commercial banks, primarily from developed nations, have also played a significant role in financing coal and gas projects in Asia, despite having halted such projects within their own borders. This resurgence of coal, alongside the expansion of gas infrastructure, poses a serious threat to global climate goals. It diverts critical investments away from renewable energy, prolongs reliance on fossil fuels, and hinders the transition to clean, sustainable energy. The reliance on gas, often framed as a cleaner alternative to coal, is also problematic. Gas remains a volatile and inefficient energy source that exacerbates climate change and perpetuates energy poverty, particularly in Asia.
Despite the undeniable progress made in renewable energy, with capacity additions doubling between 2015 and 2022, the shift away from coal has stalled. Renewables remain the cheapest and fastest-growing source of electricity worldwide, offering a more sustainable solution to energy demands. The current investment in coal and gas, however, delays this transition, locking developing nations into decades of fossil fuel dependence. The battle against coal is far from over. While much progress has been made, the resurgence of coal and gas threatens to undermine years of climate advocacy. Governments and financial institutions must urgently redirect their focus towards accelerating renewable energy adoption, ensuring that the future of global energy is not defined by dirty and dangerous fossil fuels but by affordable, reliable, and sustainable alternatives. The world must replace coal with renewables—not with gas—if it is to meet climate targets and prevent further environmental degradation.
(Lidy Nacpil is coordinator of Asian Peoples’ Movement on Debt and Development (APMDD) and frequently contributing through her write ups.)
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