Fast-growing economies in Southeast Asia have energy plans that rely on gas replacing coal as a primary source of baseload generation.
Myth
LNG will not displace coal in Asia.
Fact
The ability of LNG to drive coal-to-gas switching in Asia is more than theoretical – it has already been demonstrated.
LNG’s role in displacing coal use in Asia
Liquefied Natural Gas (LNG) is a critical fuel for energy security and decarbonisation in Asia. With many countries lacking domestic gas resources and regional production not sufficient to meet rapidly rising demand, LNG imports provide a pathway to reliable power generation that produces far fewer emissions than the coal that currently dominates Asia’s energy landscape.
While some countries in the region have only recently started importing LNG, there have already been positive signs for the displacement of coal.
Coal-to-gas switching in action
Over the past 15 years, the Philippines has become one of the most coal-dependent nations in Asia. This has coincided with the country’s long-standing Malampaya gas field becoming depleted.
However, in 2025, this trend was arrested for the first time in nearly two decades. Data from the Independent Electricity Market Operator of the Philippines shows that coal-fired generation experienced its first annual decline since 2008, with both gas-fired power and renewables (particularly solar and hydropower) increasing significantly.
While electricity produced from coal fell by more than 7% year-on-year, gas-fired production rose nearly 19% – supported by ongoing growth of LNG imports (which the Philippines started importing in 2023). A jump of more than 22% in solar generation reflects the ability of gas and renewables to be complementary power sources.
National energy plans push for more gas
Across Asia – and Southeast Asia in particular – national energy planning outlines a greater role for gas as a reliable form of power generation that supports the expansion of renewable energy. Coal is currently the dominant fuel for power production in these countries.
This includes the Philippines, where coal has provided more than 60% of power in recent years, and Vietnam, where more than half of electricity is produced using coal. Under the Philippine Energy Plan, gas could make up as much as 35% of power generation by 2050, while Vietnam’s Power Development Plan 8 has gas replacing coal as the primary source of baseload power by 2030.
Ongoing growth of LNG-to-power industries will be critical to meeting these targets, with Vietnam expecting LNG to provide for more than 12% of generation in 2030. The Philippines signed its first long-term LNG contract in 2025, with Vietnam doing likewise early in 2026.
WoodMackenzie has forecast that Asia’s demand for LNG will nearly double to 2050, driven by countries in South and Southeast Asia that face declining or depleted domestic gas resources. This includes not only nations such as Vietnam and the Philippines, which are looking to switch out coal for gas, but those like Thailand, which seek to maintain gas-based economies.
Even Malaysia – an established gas exporter – will require significant growth in LNG imports as it reduces its reliance on coal. The potential for Malaysia to swap out gas for coal was demonstrated in December 2025, when gas-fired generation made up most of a 5% increase in power supply to Peninsular Malaysia, while coal-fired production fell by 4.3%. To continue this trend long-term, Malaysia – like the Philippines and Vietnam – will need to step up LNG imports.
LNG for practical decarbonisation
Analysis in 2025 by S&P Global Energy found that LNG offered a pathway for nations in Asia to phase out coal use in the power sector.
The Pathways to Accelerate Power Emissions Reduction in Asia study identified that Japan, Vietnam and the Philippines could employ a combination of increased LNG use and expansion of renewables to retire half of coal-fired power by 2035. This would reduce power sector emissions by 33-38% in each country, with only 8-16% additional investment in the energy system.
The cumulative impact of the emissions reduction would be the equivalent of taking 58 million passenger vehicles off the road.
This level of decarbonisation is possible because S&P Global Energy found that LNG from Australia, the US and Qatar (the region’s three biggest sources) had 57% lower average end-use emissions per unit of electricity than coal.
Across the full-lifecycle – including production, liquefication, shipping, regasification and consumption – LNG’s average carbon intensity was 47% lower than the coal it replaced in power generation in Asia.
