Despite multi-billion-dollar energy transition deals agreed with wealthy nations and development banks in 2022, coal use in Indonesia and Vietnam will continue to grow until at least 2030, the International Energy Agency (IEA) forecasts. In its annual coal report, the Paris-based agency estimates that coal use will rise 4.5% a year between 2025 and 2030 in Southeast Asia, with Indonesia, Vietnam and the Philippines largely responsible for the increase. Coal-heavy India is also set for a 3.3% rise this decade. Growth in these nations will offset large declines in coal use in developed countries and a smaller fall in China, the IEA said, causing global coal demand to plateau and edge down only slightly by 2030. For this year, the report finds that global coal demand is set to rise by 0.5%, reaching a record 8.85 billion tonnes. In the US, higher natural gas prices and policy measures slowing the retirement of coal plants lifted consumption, which had been on a downward trend for the previous 15 years, it notes. Big banks’ lending to coal backers undermines Indonesia’s green plans When burned, coal’s planet-heating emissions are far larger than other fossil fuels like oil and gas. Quickly reducing the use of coal is critical to meet climate goals, experts say, and countries agreed to phase it down at the COP26 climate summit in Glasgow in 2021. A group of donor nations launched Just Energy Transition Partnerships (JETPs) in 2021 and 2022 to help accelerate a transition away from coal in key countries like South Africa, Vietnam and Indonesia. But responding to a question from Climate Home News, Keisuke Sadamori, the IEA’s director of energy markets and security, told a press briefing this week that the JETPs in Indonesia and Vietnam had so far failed to “bend the curve”. Fabby Tumiwa, head of the Institute for Essential Services Reform (IESR) who advised the Indonesian government on the JETP deal, said the country’s JETP is “stalling” partly because the wealthy country partners have not funded the early retirement of coal-fired power plants. A draft Indonesian energy plan seen by Climate Home News in August 2023 said Indonesia would retire a sixth of its coal-fired power plant capacity by 2030. But, after a row over finance with rich nations, that target was dropped from the final version published later that year. Instead, the plan said Indonesia would start shutting down coal plants before their scheduled closure no earlier than 2035. Tumiwa told Climate Home News that the lack of international funding for early retirement has made it harder for JETP partner countries – including Germany, Japan and the UK – to ask Indonesia to stop building new coal-fired power plants. Nov 4, 2025 Energy Big banks’ lending to coal backers undermines Indonesia’s green plans Foreign banks involved in Indonesia’s $20-billion Just Energy Transition Partnership have also funded companies working on coal power expansion, a TBIJ and Climate Home News investigation reveals Read more Feb 9, 2024 Clean Energy Frontier Indonesia turns traditional Indigenous land into nickel industrial zone Indonesia supplies the EV industry with critical battery materials but the sector’s rapid expansion is infringing the rights of Indigenous peoples Read more Nov 2, 2023 Energy Indonesia delays coal closure plans after finance row with rich nations After its pleas for grants not loans fell mostly on deaf ears, Indonesia has watered down its plans to shut coal power plants early Read more Even beyond 2030, early closures look in doubt. Recently, PLN cancelled a plan to shut down the Cirebon-1 coal-fired power plant seven years early in 2035, citing the high cost of compensating the plant’s owner – despite promised financial support from the Asian Development Bank under its Energy Transition Mechanism. Think-tank IESR argues that the health benefits from shutting down the polluting plant early would outweigh the financial costs, and that keeping the plant open is a sign that the government’s commitment to the energy transition is weakening. Indonesia’s Chief Economic Minister Airlangga Hartarto said earlier this month that the Cirebon-1 plant is less polluting than others in Indonesia so it would be better to shut down those dirtier, older facilities first. “Captive” coal growing Tumiwa said another flaw in the JETP was its focus on coal power stations that provide electricity to the grid rather than “captive” coal power plants which directly power nearby industrial facilities including nickel and aluminium smelters. By the time those working on the JETP realised that captive coal accounted for a significant chunk of capacity, it was too late to change the JETP’s design, Tumiwa said. The IEA report said that coal use in Indonesia and Vietnam will rise mainly because of expanding electricity demand driven by economic and population growth. In Indonesia, in particular, the use of coal in industries like nickel and aluminium is increasing, the report added. In Vietnam, the power-hungry manufacturing sector has driven the surge in coal consumption. In both countries, JETP funding for clean energy has trickled in only slowly. Indonesia’s JETP, which promised to mobilise $20 billion by 2027, has delivered $3 billion so far, mostly as concessional loans. Japan has been by far the largest donor, providing almost $2 billion. In Vietnam, only three projects have progressed to funding arrangements, totaling less than $1 billion. The IEA report said discussions have “intensified” in Indonesia around energy security, affordability and orderly transition pathways. The country has large reserves of relatively cheap coal and the country’s state-owned electricity company PLN has encouraged investment in coal mining and transportation. Vietnam has also watered down its plans to shut coal plants and has imprisoned environmental campaigners. In May, European governments announced loans for a transmission line and two hydropower plants under the JETP, but no plans for early coal plant closures. The post Indonesia and Vietnam set for surge in coal use this decade despite transition deals appeared first on Climate Home News.

Read original article

Read original article