As 2026 gets underway in earnest, it’s clearer than ever that the world is in need of practical and realistic energy solutions.
COP30 in Brazil showed that the task of balancing climate action with demand for reliable and affordable energy is only getting more complex. What had been dubbed the “implementation COP” ended with just incremental progress on most major initiatives.
It’s easy to understand why. The notion of consensus-based decision-making about climate change is at odds with the vastly different energy and economic circumstances of individual countries involved in forums like COP.
As Bill Gates astutely observed in the lead-up to this year’s event, action on climate change cannot be an at-any-cost proposition. Poverty and disease remain serious issues around the world, and a lack of access to energy is a contributing and compounding factor.
Although energy access has improved significantly over the past 15 years – particularly for electricity – there are still nearly a billion people in Asia who are unable to use clean cooking fuels and technologies.
If we’re serious about lifting families, communities and countries in Asia out of poverty over the next few decades, then stable, affordable energy supply must be recognised as an absolute prerequisite.
This will necessitate a very practical approach to the intersection of energy use and efforts to reduce emissions.
Growing pragmatism on energy
Against the backdrop of COP30, the International Energy Agency published its annual World Energy Outlook for 2025.
This year’s edition stands apart from recent instalments with much more realistic assessments of global energy consumption scenarios, especially fossil fuels.
While there remains a scenario that “backtracks” from Net Zero in 2050 – and models energy policies required to achieve this – there is also a new Accelerating Clean Cooking and Electricity Services Scenario (ACCESS) that features country-by-country pathways. The Stated Policies Scenario (STEPS) has been retained, and the Current Policies Scenario (CPS) reinstated after being discontinued in 2020.
A great deal has changed globally over the past five years, including a war in Europe that totally upended energy markets. The STEPS and CPS pathways, which show natural gas use increasing between 10 and 30 per cent by 2050, are strongly aligned with a world where energy security is paramount and fossil fuels still account for more than 80 per cent of energy use.
The IEA should be acknowledged for reintroducing scenarios that better reflect the way countries, communities and industries are really operating.
This doesn’t mean giving up on work to reduce emissions. However, we must be pragmatic in our approach. Hindering economic development, particularly for low-income economies, would be counterproductive to the wellbeing of billions of people.
After all, as Gates posed in his pre-COP article: if the world was to achieve all its climate targets over the next 30 years, but disease, famine and economic disadvantage remained prevalent, could that really be described as a success?
The opportunity for Australian gas
Australia’s gas industry has a significant role to play in enabling Asia to strike a challenging balance that includes decarbonisation, energy security and economic growth.
Australian LNG is already an energy mainstay for Japan, South Korea, Singapore and Taiwan. These are not only globally critical economies but regional energy transition leaders that are supporting fast-growing nations in Southeast Asia to transform their energy systems.
One of the major reasons why IEA models like STEPS and CPS show increasing future gas use is because nations in Asia are actively seeking a much lower-emission alternative to the coal that dominates their power sectors today.
Energy plans for Vietnam, the Philippines, Malaysia and Indonesia revolve around switching out coal for gas to provide baseload generation that supports ambitious expansion of renewables. Vietnam and the Philippines have already started LNG imports to support coal-to-gas switching and Malaysia’s need for LNG will grow through the 2030s as domestic gas supply declines.
WoodMackenzie has projected that Asian LNG demand could nearly double by 2050.
Australia is in an excellent position – relationship-wise and geographically – to be Asia’s preferred supplier of LNG for existing and emerging markets.
Australia is a well-respected trading partner with a long history of being a dependable source of energy. Australian LNG can reach many ports in Southeast and North Asia in five to 10 days, considerably quicker than other major exporters.
LNG as a driver of decarbonisation
Most importantly, it has been established that Australian LNG has a measurable emissions reduction benefit when it replaces coal in power generation in Asia. Analysis in 2025 by S&P Global Energy found that LNG from the world’s three biggest exporters – Australia, the US and Qatar – produced 57 per cent fewer end use emissions than coal used in power plants in Japan, Vietnam and the Philippines.
LNG also had 47 per cent lower lifecycle emissions than coal. As a result, for each tonne of emissions that is incurred in producing and shipping LNG to Asia, more than three tonnes of lifecycle emissions are avoided when it is used in electricity production instead of coal.
It’s an extremely telling statistic – and one made even more compelling by the fact global coal demand is on the verge of setting its fourth consecutive annual record. While the IEA has suggested overall coal use will plateau and possibly even decline by 2030, it is forecasting Southeast Asian consumption will continue to grow by four per cent annually.
If decarbonisation and economic growth are to co-exist in Southeast Asia, then this coal use trend must start going the other way. With intermittent renewables not yet capable of providing the energy security that nations require, gas will play a very significant role.
There are already some positive signs from the Philippines, where coal use declined in the first half of 2025 and gas-fired power rose notably as a complement to ongoing investment in renewable energy.
Asia’s evolving energy landscape represents a sizeable opportunity for Australian LNG, albeit one that will require policy reform to be realised.
Australia has more than enough gas that can be developed to meeting domestic requirements and demand from Asia over the next few decades. What it needs to go with this are regulatory settings conducive to the tens of billions of dollars of investment required to develop major LNG project, which often support domestic supply.
The year in front of us promises to be pivotal in this regard, and energy stakeholders in Asia will be observing intently.
Paul Everingham was CEO of the Asia Natural Gas and Energy Association (ANGEA) from September 2022 to June 2026. ANGEA works with governments, industries and communities in Asia, providing affordable solutions that promote energy security, economic growth and decarbonisation.
This article was originally published in Energy News Bulletin.
