Southeast Asian countries, particularly Vietnam and the Philippines, are poised to increase coal trade and consumption in the coming years, according to industry officials, despite a potential peak in demand from China and India by 2025. The Indonesian Coal Miners Association (ICMA) forecasts that while China and India’s coal imports may plateau, Southeast Asia’s coal imports will grow by nearly 3% annually, reaching 170.9 million metric tons by 2030, up from 140.9 million tons in 2023.

Vietnam, Southeast Asia’s fastest-growing economy, is emerging as a key market for coal, with expectations of importing 66 million tons by year-end, compared to 47.8 million tons in 2023. The country is projected to hit peak imports of 86 million tons by 2035, with the majority of coal being used for electricity generation.

Similarly, the Philippines saw a 7.6% increase in coal imports through August 2024, while Malaysia’s imports grew by 4% during the same period. These countries are expected to replace China and India as significant growth markets for coal exporters.

Although China and India’s demand is expected to stabilize after peaking, their consumption levels will remain high. China’s thermal coal imports are projected to increase by 6.3% in 2024, while India’s coal imports continue to grow, rising 11% year-on-year as of August 2024.

While Southeast Asia is not adding new coal-fired power plants, it is increasing the use of existing ones to meet rising electricity demand.