A new study by S&P Global Commodity Insights highlights how impactful decarbonisation in Asia can be affordably achieved over the next 10 years without compromising energy security.
Pathways to Accelerate Power Emissions Reduction in Asia, commissioned by the Asia Natural Gas and Energy Association (ANGEA), examines decarbonisation options for power sectors in Japan, the Philippines and Vietnam. The report identifies a balanced approach, with increased use of liquefied natural gas (LNG) supporting the expansion of renewable energy, as a viable route to reliable and affordable energy with significantly reduced emissions.
The data produced by the study is stark and enlightening.
An accelerated pathway to full decarbonisation by 2035 would involve the Philippines and Vietnam having to more than double spending on their energy systems. Japan would have to invest an additional 75 per cent. This is a punitive financial burden that no country can entertain.
By contrast, employing a combination of LNG and renewables would allow the three countries to retire half of their coal-fired capacity by 2035 and reduce annual emissions by 33-38 per cent. This can be done investing just 8-16 per cent more capital in their energy systems.
This is possible because – as revealed by S&P Global’s analysis – LNG from Australia, the US and Qatar used in power generation in the study countries has 47 per cent lower average lifecycle carbon intensity than coal. On average, for each tonne of CO2 emitted in producing and shipping LNG to Japan, the Philippines and Vietnam, more than 3 tonnes of emissions are avoided on a lifecycle basis when that gas replaces coal in electricity production.
Decarbonising power generation in Asia is critical because it accounts for half of the region’s total emissions (which in turn make up 50 per cent of the world’s emissions). Of Asia’s power sector emissions, 90 per cent are a result of coal-fired power.
If nations in Asia can retire 50 per cent of their coal fleets in the next 10 years, the contribution to global emissions reduction efforts will be very meaningful.
The pathway to doing so in the Philippines and Vietnam would involve investment in gas-fired generation capacity beyond the growing role for LNG that has been outlined in national energy plans. Although Japan has existing regasification and generation capacity to support a balanced case approach, it can lean further into the Seventh Strategic Energy Plan’s identification of LNG as a fuel that will provide “a practical means of transition.”
While S&P Global’s analysis focused on three countries, the potential for the gas-renewables combination to accelerate wider-reaching decarbonisation in Asia is significant.
But nations in Asia cannot undertake this journey by themselves.
Firstly, there is the issue of LNG supply. Asia does not have the gas resources to be self-sufficient, and LNG demand from the region had already been expected to increase markedly to 2050.
Further ramping up gas-fired power to accelerate the phaseout of coal will require more LNG and makes it imperative that major supply nations in Australia, the US and Qatar continue to bring on new projects.
In the case of Australia, in particular, this will require greater regulatory certainty than seen in recent years and a stable policy environment more conducive to investment.
There is also a strong opportunity for countries like the Philippines and Vietnam to be supported with technical expertise, policy guidance and funding as they grow relatively nascent LNG-to-power capabilities and infrastructure.
Since ANGEA was formed in 2021, we have consistently said the rest of the world will have a major role to play in the transformation of Asia’s energy systems.
The S&P Global Commodity Insights study shows that LNG-exporting nations can embrace this role and have an immediate impact.
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.
