Kuala lumpur: Asia-Pacific (APAC) thermal coal demand has experienced a significant surge, with an additional 150 million tonnes (Mt) of cumulative consumption projected through 2030. This increase is largely driven by the ongoing West Asia conflict, with roughly half of the demand expected to materialize in 2026.

According to BERNAMA News Agency, the surge is attributed not to policy changes but to a supply gap, specifically a liquefied natural gas (LNG) shortfall of 35 Mt estimated for this year. This shortfall is compelling gas-dependent utilities to increase coal capacity utilization, supported by regulatory cap removals across Northeast Asia.

Rystad Energy projects that incremental coal consumption in Asia could rise by nearly 70 Mt in 2026 if the tight-gas market scenario persists. This increase is not due to new capacity additions but rather existing coal-fired plants operating at higher utilization rates.

Coal-fired generation in Northeast and Southeast Asia has risen sharply as gas output declines and global seaborne coal shipments to the region increase significantly. Specifically, Japan's coal-fired generation grew 11 percent while gas output fell 13 percent, and coal imports in South Korea and Japan are tracking more than 50 percent and 20 percent above levels from the previous year, respectively.

Tonmit Talukdar, a coal research analyst at Rystad Energy, noted that coal usage increases when gas prices spike, supply tightens, or mothballed plants are temporarily restarted. He elaborated that the current response is more contained compared to the 2022 Russia-Ukraine crisis, which saw a sharp surge in global coal demand due to disruptions in Russian gas supplies.

Talukdar emphasized that this is not a resurgence of coal but a reality check for APAC's energy transition. He pointed out that LNG price volatility has shifted costs without reversing the move toward cleaner energy. Thermal coal prices have reacted to this tightness with cautious buying, stockpiling, and a geopolitical risk premium rather than any structural change.

He added that coal will continue to act as the system's fallback until storage, grid flexibility, and firm low-carbon capacity are sufficiently scaled to cover peak demand and periods of low renewable output.