A new independent study by S&P Global Commodity Insights has found that Australian LNG exports could play a pivotal role in accelerating the phaseout of coal-fired power in Asia, offering a cost-effective path to decarbonisation for countries such as Japan, the Philippines, and Vietnam.

Commissioned by the Asia Natural Gas & Energy Association (ANGEA), the study examined emissions reduction pathways for these nations’ power sectors through to 2050.

The analysis revealed that using LNG to support the expansion of renewable energy can accelerate coal retirements and significantly reduce emissions, while maintaining affordability.

The study found that LNG sourced from Australia, Qatar, and the United States has an average lifecycle carbon intensity 47 per cent lower than coal for equivalent electricity output.

According to the report, “power sector emissions would be reduced by 33-38 per cent with an additional energy system investment of only 8-16 per cent”.

A balanced approach — where LNG-fired power generation supports the growth of renewables — was identified as the most effective pathway for each country.

This strategy would enable the retirement of 50 per cent of coal-fired power by 2035.

ANGEA CEO Paul Everingham emphasised the significance of these findings: “This study underscores the critical role that Australian LNG should play in helping Asia decarbonise and debunks the myth that nations must choose between rapid decarbonisation and economic growth.”

Everingham added: “With more than 90 per cent of power sector emissions in Asia resulting from coal-fired generation, global decarbonisation will depend on the region’s ability to phase out coal.

“The S&P Global Commodity Insights analysis highlights pathways for Japan, the Philippines and Vietnam – and by extension, other nations in Asia – to do this and reduce power sector emissions by 33-38 per cent by 2035, while only investing 8-16 per cent more in their energy systems.

“The common element to each of those pathways is increased use of LNG, providing reliable power generation that complements the rollout of more renewable energy.”

The study further noted that “on average, for each tonne of CO2 emitted in producing and shipping LNG from Australia, the US and Qatar, more than three tonnes of emissions are avoided on a lifecycle basis when replacing coal in power generation in the analysed countries.”

Everingham stressed Australia’s position as Asia’s largest LNG supplier and the need for continued reliability, stating: “Australia is already Asia’s biggest source of LNG and it’s essential that it continues to be a reliable supplier of affordable gas in decades to come.

“This applies not only to existing trade partners such as Japan but also the Philippines, Vietnam and other growing economies seeking to use more LNG to displace coal.”

The S&P Global Commodity Insights team modelled various scenarios, including a “business-as-usual” base case, a balanced case, and an accelerated approach that would achieve full decarbonisation by 2035.

The study found that “both the Philippines and Vietnam would have to more than double their investment in energy systems to achieve full decarbonisation by 2035, while Japan would have to invest nearly 75 per cent more.”

Everingham warned of the economic impact: “And that’s before you take into account the average marginal electricity prices – the costs paid by communities and industries – which would more than double for the Philippines and more than triple in Japan and Vietnam.

“No country can entertain that type of financial burden, especially not emerging nations such as the Philippines and Vietnam, where continued economic growth is needed to raise living standards.”

Allen Chan, Director of Energy Transition Consulting at S&P Global Commodity Insights, said: “We think this study is an important piece of analysis that can contribute to discussions in the region about how decarbonisation and coal phasedown can best be pursued and progressed, by providing quantitative data points to inform trade-offs of different pathways.”

Chan states that, among the countries analysed, LNG produces substantially fewer emissions than coal, with lifecycle carbon intensity averaging 47 per cent lower and end-use emissions 57 per cent lower.

The findings indicate that combining renewable energy with gas can effectively speed up the transition away from coal in Japan, the Philippines, and Vietnam, while also addressing affordability concerns.

Everingham concluded that the findings align with the energy strategies emerging in Asia: “Australia has gas resources that can be used to meet both domestic needs and demand from allies in Asia for decades to come.”

Everingham argues that Australia requires both strong political commitment and supportive policy frameworks to enable the large-scale investments necessary for advancing gas projects.

He warns that without prompt action, Australia risks missing its chance to help Asia decarbonise via LNG exports, potentially allowing coal consumption in the region to keep rising.