A recent study by Wood Mackenzie, commissioned by the Asia Natural Gas & Energy Association (ANGEA), highlights that coal use and emissions from Asia’s power sector will escalate unless the region gains access to significantly more U.S. liquefied natural gas (LNG).
The report projects Asia’s LNG demand to grow from 270 million tons per year in 2024 to 510 million tons by 2050. This demand is driven by the region’s economic and population growth and the need to transition away from coal, Asia’s primary power source. U.S. LNG is identified as crucial for meeting this demand, balancing global markets, and providing a cost-effective alternative to coal.
Scenarios for U.S. LNG Exports
The study models two scenarios:
- Lift the Pause: If the current pause on U.S. LNG export approvals to non-FTA countries ends in 2025, U.S. LNG could supply a third of global LNG by 2035.
- Prolonged Halt: If the pause persists, planned U.S. LNG projects may stall, risking higher LNG prices due to insufficient global supply growth.
“Emerging economies in Asia, like Bangladesh, Vietnam, and Indonesia, face barriers in transitioning to gas-fired power if LNG prices remain high. Without affordable alternatives, coal use will continue to rise,” said ANGEA CEO Paul Everingham.
Climate and Economic Implications
A 30% reduction in Asia’s projected LNG imports by 2035 could result in 95 million additional tons of coal burned annually, emitting 100 million tons of CO₂—equivalent to emissions from 20 million cars. This would severely impact Asia’s climate goals.
Renewables and LNG as Partners
While renewable energy remains a critical focus, challenges such as inadequate storage, land acquisition issues, and slow infrastructure development hinder its rapid expansion. The study underscores LNG’s complementary role in reducing emissions and ensuring energy security during the transition.
Regional LNG Dynamics
- Southeast and South Asia: These regions are expected to see rapid LNG demand growth through the 2030s, driven by rising energy needs and declining domestic gas resources.
- China: Demand will peak in the early 2030s before tapering off due to increased piped gas imports from Russia.
- India: LNG demand will rise sharply from 2027, particularly in non-power sectors like city gas, fertilizers, and petrochemicals.
Challenges to Renewable Expansion
The report also identifies hurdles in scaling renewable energy across Asia. Grid limitations, insufficient battery storage, and regulatory challenges are key obstacles. Additionally, country-specific issues—such as Bangladesh’s high population density or Thailand’s low wind speeds—further complicate the deployment of renewable projects.
The study emphasizes that a balanced approach, integrating LNG with renewable energy, is vital for Asia to meet its growing energy needs while advancing climate objectives.
