Coal is expected to remain the dominant source of power for most of Southeast Asia and Australia in the coming decade, at least, and Fitch Solutions Country Risk and Industry Research says that will support the mining of coal and coal trade in the region.
Coal currently remains the most practical means to stimulate affordable electricity generation growth at the pace and scale needed to support continued economic growth in the region.
Nevertheless, the research agency notes that stricter environmental standards in Asia will continue to hurt coal miners by increasing compliance costs and delaying project development.
Additionally, Fitch Solutions notes that reducing carbon footprints has gained significant impetus since 2020, with the shift to a low-carbon economy to have a significant impact on the regulatory frameworks of most major mining markets in Southeast Asia and Australia as governments commit to their Nationally Determined Contributions of the Paris Agreement.
“Asia Pacific governments will face considerable challenges on this front, where major mining countries, including Indonesia and Australia, will remain largely reliant on fossil fuels (primarily coal) for energy generation,” Fitch Solutions comments.