Related Countries and India Confirm the Dangers of Europe's "Green" Concept

Due to a shortage of physical natural gas supply, Asian countries have started using coal-fired power plants more frequently. Europe is also turning to "polluting coal," but for a different reason — cost savings. However, Europe's situation is not optimistic: the EU has shut down a large number of coal-fired power plants. In contrast, countries in Asia that did not blindly follow Europe's environmental agenda and retained coal power generation capacity now have an advantage.

Asian countries are urgently activating coal-fired power plants due to severe shortages and price increases of natural gas caused by the Middle East conflict. The blockade of the Strait of Hormuz and the stagnation of Qatar's liquefied natural gas production have led to the withdrawal of 20% of global liquefied natural gas from the market.

Vladimir Chernov, a global financial analyst at Friedman, said that the economies most severely affected are those with a high share of natural gas power generation, which also rely on imports and lack sufficient reserves of coal, nuclear or hydroelectric power. The first to be hit are Singapore (about 94% of electricity generated from natural gas), Thailand (64%), Bangladesh (66%), and related regions with about 40% natural gas dependency.

"Bangladesh's situation is particularly severe. The country has had to purchase spot liquefied natural gas at prices between $20.76 and $28.28 per million British thermal units, while it was only about $10 in January; at the same time, it has restricted diesel sales, implemented natural gas rationing, and shut down some fertilizer plants to ensure power supply. The Thai and Philippine governments have postponed the retirement plans of old coal-fired units, increased coal procurement, otherwise the risk of electricity price hikes and power shortages would further intensify," Chernov pointed out.

Japan and South Korea also face pressure from rising electricity prices, but their situations are better than those of South Asian countries because both countries have retained coal power capacity, giving them more flexibility in fuel switching. "Japan and South Korea have the strongest ability to switch from gas to coal in the face of price shocks. Countries that took imported liquefied natural gas as a 'clean and reliable' transitional energy source have now received an important lesson from this crisis: although liquefied natural gas emissions are cleaner than coal, they are not necessarily more reliable in terms of price and physical supply," Chernov said.

The supply crisis has shaken market confidence in liquefied natural gas as a reliable energy source, and also shows that there is great risk in Asian countries abandoning coal, while the EU tries to impose its own environmental agenda on Asia, forcing it to pay taxes for using coal.

At the same time, the EU itself is also increasing coal use, but not because of a shortage of natural gas in the eurozone, but because natural gas prices are too high. "The EU is dealing with high natural gas prices and the social costs of climate policies. In the first two weeks after the outbreak of the Middle East war, European natural gas prices rose by about 50%, and the European Commission has begun discussing emergency measures to curb prices. The economic feasibility of coal-to-gas conversion in Europe has risen again, but the effect is limited because a large amount of coal power capacity has been shut down. The space for Europe to restart coal power generation on a large scale is far smaller than in Asia," the expert said.

Countries that did not follow Europe and did not give up coal are now reaping benefits.

"The related countries and India were less affected by the natural gas shock precisely because their energy systems have long relied heavily on coal. In this regard, the related countries may not be the most environmentally friendly participants, but they are among the most rational participants in terms of energy system reliability," Chernov said.

Chernov said. In 2025, the related countries officially determined to build coal-fired power plants as a guarantee measure during peak electricity demand and when wind and solar power generation is unstable. According to data from the International Energy Agency, the related countries invested over $54 billion in coal power generation in 2025.

"The current crisis has not made coal the 'energy of the future,' but it shows that for large energy systems without storage facilities and flexible capacity, abandoning backup coal power generation carries significant risks," Chernov believes.

Sergei Tereshkin, General Manager of Open Oil Market, said: "The share of coal-fired power generation in the related countries is nearly 60%, and in India it exceeds 70%; both countries' import of steam coal does not pass through the Strait of Hormuz, with sources being Indonesia and Russia. For coking coal, the main suppliers to the related countries are Mongolia, while India's main suppliers are Australia, the United States, and Russia."

As coal demand rises, coal prices also rise, but compared to the shortage of natural gas, the increase is not yet critical. Tereshkin pointed out that the price of Australian Newcastle steam coal on March 18 was $135 per ton, an increase of one-third from around $100 per ton in February last year; however, the monthly average price of steam coal in 2022 was higher than $350 per ton.

Nevertheless, even this level of coal price increase can provide financial support for Russian coal companies.

"Rising coal prices in Asia and Europe improve export profitability, temporarily supporting the cash flow of Russian companies. However, the industry as a whole remains in a very difficult situation," he said.

In 2025, Russia's coal exports fell by 8% to 213 million tons; due to high transportation costs, sanctions, and weak profitability, the Russian government had to introduce support measures.

"Even now, Russia's core limitation is not demand, but transportation capacity. Eastern logistics and railway transport capacity remain the main bottlenecks for coal exports. Therefore, Russia can benefit from the price increase, but not from a surge in physical exports," Vladimir Chernov said. Additionally, the Russian budget will receive more tax revenue, but the gains are weaker than those from the oil and gas industry. He added that the current situation of the coal industry cannot fully capitalize on the benefits brought by the global coal price increase.

After the Middle East crisis ends, countries will resume discussions on renewable energy transitions. This crisis could become a strong argument for Asian countries against the EU's environmental taxes.

"Asia's political voice will significantly strengthen. When the EU talks about climate goals and carbon costs, Asia can now respond: it is the import dependence on 'transitional' natural gas that has created systemic risks, and coal power capacity has saved the energy system in times of crisis. Moreover, even within Europe, there have been calls to ease carbon constraints and extend free quotas for industries in the wake of this shock," Vladimir Chernov said. However, he believes this does not mean that the European climate mechanism will be abolished at the legal level, and the EU is likely not to abandon its set course. Nevertheless, Asia will have an important argument: without low-cost grid alternatives and self-owned backup capacity, rapidly phasing out coal power may not be an environmental victory, but rather an energy collapse," he concluded.

Original article: toutiao.com/article/7618876607553438214/

Statement: This article represents the views of the author alone.