What Is The Energy Transition?
The energy transition refers to the global shift to lower-carbon energy sources in order to progress emissions reduction targets, including net zero. The energy transition will differ between regions and from country-to-country within those regions, depending on national capabilities and resources. While there is a strong focus on the role of renewable energy within the energy transition, it is also important that countries move towards lower-carbon fuels for the baseload power generation that ensures their energy security.
How Will The Energy Transition Impact Asia?
The ability of countries in Asia to successfully transform their energy systems will be critical to global progress on decarbonisation, including aspirations to achieve net zero emissions. Asia is already home to more than half of the world’s people and by 2050 it is projected to make up half of global GDP and energy demand.
Asia’s Energy Sources
Currently, Asia is the most coal-dependent region in the world, with numerous highly populated countries and fast-growing economies generating more than 50 per cent of their electricity from coal. These include India and China, as well as Indonesia and the Philippines. Malaysia and Vietnam also use coal to generate more than 40 per cent of their electricity.
A 2025 S&P Global Commodity Insights study identified that half of Asia’s total emissions – which make up 50 per cent of global emissions – come from the power sector. Of these, 90 per cent are the result of coal-fired generation.
Emissions And Affordability
For the world to make meaningful progress towards emission reduction targets, a successful balance needs to be struck in Asia between affordably meeting energy demand that drives economic growth and decarbonising power generation. The balance is particularly important in emerging Asia and will require changes to the energy mix in countries across the region. This will necessitate not only significant new investment in renewable energy but investments in alternative sources of energy security to coal. Natural gas will be a logical choice for many nations.
What fuels are needed for the energy transition in Asia?
There is no single energy source that offers a “silver bullet” for Asia’s energy transition. Each country will need to account for its own circumstances in finding a mix that ensures affordability and reliability of energy while reducing emissions. Coal is likely to have a longer-lasting role in Asia than other regions.
Renewable Energy
Increased implementation of renewable energy will be important for both short-term and long-term decarbonisation. However, there remain significant challenges around renewables. Renewable energy generation is intermittent, with solar power dependent on sunlight and wind power reliant on the wind blowing. It is not yet economically feasible to use battery storage technology to overcome this intermittency. Meanwhile, countries close to the equator have limited wind resources and highly populous nations often lack land space for large-scale solar installations. The cost and complexity of upgrading dated grid infrastructure to integrate more renewable energy has also proved to be difficult for emerging Asia.
Many countries in Asia have established ambitious renewable energy targets, which will be difficult to meet.
Hydrogen And Ammonia
In the longer-term, it is possible that hydrogen and ammonia will have significant roles as low-carbon sources of electricity in Asia. However, it is still to be proven whether this technology can be developed at scale in a cost-effective manner. Again, affordability is a critical issue for emerging Asian economies, where decisions about energy are highly price-sensitive.
Nuclear
Nuclear energy meets the criteria of being low-emission and providing reliable power generation but offers its own challenges. Many nations in Asia lack existing nuclear industries and establishing this capability and developing facilities is generally very expensive. Once more, affordability of energy is a prime factor for policy makers in emerging Asia.
An Affordable and Available Alternative
The most pressing need for Asia during the energy transition is to find an affordable and available alternative fuel to coal for power generation. Global coal use hit record levels in 2022, 2023 and 2024, primarily because of demand for electricity in Asia. Emerging economies lean on coal for energy security because it is inexpensive, abundant and familiar to them.
Natural gas, which produces far fewer emissions than coal during combustion, has been identified as a fuel that will help emerging Asia successfully manage the difficult balance between maintaining energy security and reducing emissions.
The Case For Natural Gas In Asia’s Energy Transition
Natural gas has been shown to produce on average half the emissions of coal when used to generate electricity, while also offering air quality benefits. It is also an extremely suitable partner for the investments in renewable energy that are being made around Asia. Gas-fired power is highly dispatchable, meaning it can be ramped up much more quickly than coal generation during periods of intermittent renewable power generation. A variety of countries around Asia – including Vietnam, the Philippines, Malaysia and Indonesia – have energy plans that revolve around switching out coal-fired generation for gas where possible.
Because Asia lacks the gas resources to be self-sufficient, liquefied natural gas (LNG) imports will be required to meet demand from countries in the region.
Feasibility & Security
While natural gas is a fossil fuel with emissions that must be managed, it is more reliable than renewable energy and currently far more realistic for emerging Asia than nuclear power or at-scale use of hydrogen and ammonia. Crucially, for still-developing Asian countries where economic growth will carry hundreds of millions of people out of poverty, natural gas offers the energy security they currently attain from coal with a much lower emissions profile. In time, as carbon capture and storage (CCS) develops in Asia, this technology could be paired with gas-fired power to further reduce emissions.
Singapore’s Energy Transformation
Singapore stands as a great example of a country that has transformed its energy system using gas. Up until the early 2000s, Singapore relied heavily on oil-fired power but the move to gas – initially through pipeline imports from neighbouring countries and now increasingly through liquefied natural gas (LNG) – has provided a lower-carbon source of strong energy security. The dependable nature of gas allows Singapore to be bold in its efforts to expand renewable energy capacity (solar) and explore alternative fuels (like hydrogen).
Affordability, Availability & Production
One of the key issues surrounding the introduction of more gas-fired power in emerging Asia is ensuring there is enough global supply for it to be both affordable and available to countries which seek to use it. Gas resources within Asia will not be sufficient to meet demand and the region will be dependent on gas supply from other parts of the world.
Continued development of major gas projects by the world’s biggest LNG exporters – the United States, Australia and Qatar – will be needed to meet Asia’s needs over coming decades. Positive signals about future production in these countries will, in turn, give emerging nations in Asia the confidence required to make large investments in LNG import and gas-fired power facilities.
A recent study by Wood Mackenzie projects that Asia’s demand for LNG will nearly double to 2050, driven largely by demand growth from South and Southeast Asia through the 2030s and following decades.
S&P Global Commodity Insights analysis from 2025 found that a combination of increased use of LNG and expansion of renewable energy offered an affordable pathway for nations in Asia to achieve significant decarbonisation of the power sector by 2035.
Conclusion
With sufficient global availability of affordable LNG, emerging nations in Asia will be able to use gas-fired power to reduce their reliance on coal and maintain energy security while continuing to expand investments in renewable energy and other low-carbon fuels. The presence in the region of experienced gas importers like Japan can provide newer entrants to LNG markets (such as Vietnam and the Philippines) with a source of expertise and guidance as they work to transform their energy systems.
