Fueled by China, Coal Still Firing in SE Asia Despite Environmental Concerns

Coal is falling out of favor across the developed world because of concerns over pollution and climate change, but it remains a growing energy choice in many parts of Southeast Asia driven by Chinese investment. While many markets, including the United States, Europe, and East Asia, shift away from coal, Chinese banks, energy and construction companies remain committed to financing and building dozens of plants in Indonesia, Vietnam, Cambodia, and Laos.

That’s despite growing concerns about environmental degradation, electricity oversupply, and air pollution. Coal is widely considered the dirtiest fossil fuel for electricity generation, with the highest greenhouse gas emissions, and widespread air, water, and soil quality issues due to mining, burning, and coal waste.  “It’s definitely true that China is the main investor for coal in Southeast Asia,” said Isabella Suarez, a Philippines-based analyst for the Center for Research on Energy and Clean Air (CREA). “If you look at overseas investment portfolio for Chinese coal, Indonesia and Vietnam are second- and third-highest in the world.”

Coal accounts for 56 percent of electricity generation in Indonesia, 34.3 percent in Vietnam and 29.3 percent in Cambodia.

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