$180B coal investment surge as Iran war disrupts Asian energy supply chains

This regression mirrors the pattern seen after Russia’s 2022 invasion of Ukraine, when European nations hastily built new fossil fuel import terminals and burned more coal to replace disrupted gas supplies. Now, Asia faces its second major energy shock in less than a decade, and the response is unequivocal: energy security trumps climate ambition. Sandeep Pai of Duke University’s Nicholas Institute articulates the prevailing calculus: “At the end of the day, energy security triumphs any other climate considerations.” Southeast Asia’s coal-fired power capacity is now forecast to expand by 30% by 2030, according to the Global Energy Monitor, directly undermining the region’s nationally determined contributions under the Paris Agreement. The promotion of nuclear power and renewables continues, but these longer-lead options cannot compensate for the acute need for baseload power amid the Strait’s closure.

The implications extend far beyond carbon budgets. Global supply chains for everything from manufacturing to digital services will feel the ripple effects of higher and more volatile energy costs, potentially fueling inflation and slowing the energy transition in emerging markets. For climate advocates, the Iran war is a stark reminder that geopolitical stability is a prerequisite for decarbonization. Without secure alternative pathways for energy imports, Asian nations will default to coal, making the 1.5°C target increasingly implausible. The current trajectory suggests that coal’s share in the global energy mix may plateau rather than decline, with 2025’s record generation just the beginning. The IEA’s investment figure points to a structural re-entrenchment of coal, not a temporary blip. As the conflict drags on, the world watches a climate tragedy unfold in real time, where short-term survival imperatives stamp out long-term sustainability pledges.