SEA: Southeast Asian countries like Vietnam and the Philippines expect to boost the coal industry as demand from China reaches its apex.
According to a Reuters report, The Indonesian Coal Miners Association (ICMA) chairman Priyadi said that imports from China and India are expected to peak in 2025.
In contrast, the ICMA projects that the annual coal imports by Southeast Asian (SEA) countries like Vietnam and the Philippines will grow nearly 3% on average per year to 170.9 million metric tons in 2030 from 140.0 million tons in 2023.
Vietnam is seen as the country with the most promising coal growth potential.
Vietnam’s state-run company Vinacomin’s coal trading deputy general manager Dinh Quang Trung said he expected Vietnam to ship 66 million tons of coal by year-end.
“We reach peak imports by the year 2035 of 86 million tons of coal per year. About 70-75% of our total consumption will be for electricity,” said Dinh.
According to data from a Reuters report, coal imports by the Philippines grew 7.6% during the eight months ending Aug 31, while Malaysian shipments grew 4%.
Although SEA countries are expected to take over from China and India as key growth markets for exporters, consumption in the larger economies is expected to remain high. Imports are expected to continue to grow and remain steady until 2030.
Fenwei Digital Information Technology Vice General Manager Feng Dongbin said thermal coal imports by China are expected to rise 6.3% to 391 million tons in 2024.
Coal trading firm I-Energy Natural Resources senior analyst Riya Vyas said she expects coal imports to continue to grow this decade. Consultancy firm Bigmint shows Indian imports are 11% year-on-year higher as of the end of August.
Meanwhile, SEA companies are ramping up the utilization of existing power plants to address the higher electricity demand.
In Malaysia, TNB Fuel Services reports that data centres are the key drivers of growth in coal-fired power use. Think-tank Ember reports show that Malaysia prefers to rely on coal for power rather than natural gas.
Indonesia is another big contributor to the growing fuel use in the region.
“The average age group of Indonesian installed capacity is relatively young, and therefore, it suggests the long-term demand would remain robust,” said Adaro International senior market research manager Patricia Lumbangaol.
Malaysia, Philippines, and Indonesia have among the lowest renewable energy penetrations in Asia outside the Middle East and are far behind green energy producers in China and India.
Independent Power Producers Association of Indonesia chairman Arthur Simatupang said this was mainly because coal helps to keep electricity tariffs low.
“Governments’ forces on energy security and affordability have supported the continued use of coal, particularly as it helps to keep electricity tariffs low,” said Simatupang.