Energy Shift: Southeast Asia can’t offset Indonesia’s coal export losses

By Adianto P. Simamora

Indonesia’s coal export shift to Southeast Asia is unlikely to compensate for declining shipments to China, according to a newly released report by the Energy Shift Institute.

The report highlights that while regional buyers like the Philippines, Vietnam, Malaysia, and Thailand are absorbing some volumes, their combined import capacity remains significantly smaller than China’s.

In the first half of 2025, Indonesia exported 84 million tonnes of coal to China—a 21% drop from the previous year—while total exports to the four Southeast Asian countries reached only 55 million tonnes.

“Indonesia may be diversifying its buyers, but those same buyers are diversifying away from coal,” said Hazel Ilango, Coal Transition Lead at the Energy Shift Institute.

Read also : Indonesia’s coal export value drops 20.25% in January–October 2025

Planned additions of new coal-fired power capacity across Indonesia, Vietnam, the Philippines, Thailand, and Malaysia amount to less than 25 GW, compared to China’s pipeline of 484 GW.

“Smaller regional markets remain too limited to absorb the volumes being displaced by China,” the report said.

Policy shifts across the region also signal weakening demand. The Philippines imposed a moratorium on greenfield coal plants in 2020; Malaysia aims to phase out 50% of coal by 2035 and 100% by 2045; and Thailand targets reducing coal’s share from 20% to 7% by 2037. Vietnam plans to cap new coal projects at 30 GW by 2030.

The report concludes that while geographic proximity and power demand sustain near-term coal flows, Southeast Asia cannot match China’s scale. Even if Indonesia captured all remaining regional demand, the absolute increase would be modest.

Editing by Reiner Simanjuntak