Assessment of the Role of Coal in the ASEAN Energy Transition and Coal Phase-out
22 May 2024
Executive Summary
The latest versions of the ASEAN Taxonomy (2nd and 3rd versions) incorporate distinct criteria for assessing coal phase-out (CPO) initiatives. However, the latest versions of the ASEAN Taxonomy may require some refinement to clarify some ambiguities and avoid unintended consequences.
Relying primarily on the IEA’s Net Zero Emission (NZE) Pathway as the Taxonomy’s foundation is also overly ambitious and not sufficiently tailored to the unique circumstances found in Southeast Asia. Coal Phase-down (CPD) at the right time is more relevant than Coal Phase-out (CPO). CPD will provide some relief to recently commissioned coal power plants to have 30 years of operational lifespans rather than being decommissioned earlier.
After all, coal phase-out poses tremendous challenges for ASEAN due to the role of coal in providing sufficient energy supplies at the lowest cost possible, its contributions to the region’s economy and its employment of thousands of people in coal-dependent areas. The transition away from coal should therefore be done in a just, gradual way when economically and environmentally viable alternatives are available at grid scale, to avoid sacrificing economic growth and equity as well as social stability.
Coal indeed will remain an important energy source in ASEAN, according to the latest 7th ASEAN Energy Outlook. In fact, coal currently outperforms other energy sources in terms of supply security, reliability, affordability and—to some extent—sustainability in ASEAN’s power generation.
