Climate goals threatened by coal-to-gas switch in Asia

2 November 2021

A planned US$379 billion expansion of gas infrastructure in Asia risks becoming stranded assets as many countries turn from coal to gas, according to a new report by Global Energy Monitor. The gas build-out is occurring despite a June 2021 warning by the International Energy Agency that achieving net zero emissions globally depends on halting all future fossil fuel development.

The expansion follows an unprecedented number of coal cancellations throughout Asia, owing to widespread public opposition, dwindling coal financing options, and rapidly rising coal plant costs. Rather than turn to zero-carbon renewable power, however, many countries are turning to gas. 

Examples include:

  • Japan cancelled all planned coal plants in 2021 and pledged to end new overseas coal plant finance. Yet earlier this year, Japan promised US$10 billion in public and private financial aid for “decarbonisation projects in Asia including coal-to-gas switching.” Japan has US$13 billion of gas projects in development, including 15 GW of proposed new gas-fired power plant capacity.
  • India’s planned coal power has decreased nearly 90%, from 250 GW to 28 GW since 2015, while coal power under construction more than halved, from 79 GW to 36 GW. India has US$29.5 billion of gas projects in development, including 1 GW of gas-fired power, 21 000 km of gas pipelines, and 68 mtpa of LNG import capacity.
  • The latest draft of Vietnam's new Power Development Plan (PDP) proposed no new coal plants except those already under construction or planned for completion by 2025. However the PDP called for 18 GW of LNG-based power capacity, which would amount to 13% of Vietnam’s energy mix by 2030. Overall the country has US$58.6 billion of gas projects in development, of which US$52.8 billion are gas plants.
  • While China continues to plan and build far more coal plants than the rest of the world, newly commissioned coal plants have fallen from the 2005-2015 peak, and the country is looking to gas to fill some of its heating and power needs. There are plans to develop an estimated US$130.5 billion of new gas projects in China, including 90 GW of new gas-fired power capacity.
  •  In 2020 the Philippines declared a moratorium on new coal plants that were not already in the permitting pipeline. Now the country plans to build US$14 billion in new gas infrastructure, including 16 GW of new gas-fired power capacity, which would represent a five-fold increase on existing capacity.
  • South Korea has committed to allowing no new coal plants to start construction, and to ending overseas finance for coal plants. But it has projects amounting to US$16.1 billion in the gas development pipeline, including 20 GW of new gas-fired power capacity in the construction and pre-construction phases.

“Asia’s proposed gas build-out is a risky, US$379 billion bet,” said Robert Rozansky, author of the report. “If built, this new fleet of gas infrastructure could threaten Asian countries’ efforts to reach net-zero emissions by the middle of the century, while leaving them with assets that are, or soon will be, uncompetitive against ever cheaper renewable power. It’s a lose-lose proposition for the climate and Asian countries’ economies.”

“Emissions from existing gas projects are already too great for the world to have at least a 50% chance of limiting global warming to 1.5 C,” said Ted Nace, executive director of GEM. “If built, these new Asian gas projects would lock-in emissions for decades, and worsen the long-term effects of climate change.”

GEM’s study finds that public institutions provided US$22.4 billion in financing for gas projects in Asia between 2014 and 2018. Recent announcements by the Asian Development Bank, World Bank, and others, show that these institutions have not yet committed to withdrawing from gas financing, and remain open to funding midstream infrastructure and power plants.

Linkedin Linkedin   
Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.