Despite multi-billion-dollar energy transition deals agreed with wealthy nations and development banks in 2022, coal use in Indonesia and Vietnam will continue to grow until at least 2030, the International Energy Agency (IEA) forecasts.
In its annual coal report, the Paris-based agency estimates that coal use will rise 4.5% a year between 2025 and 2030 in Southeast Asia, with Indonesia, Vietnam and the Philippineslargely responsible for the increase. Coal-heavy India is also set for a 3.3% rise this decade.
Growth in these nations will offset large declines in coal use in developed countries and a smaller fall in China, the IEA said, causing global coal demand to plateau and edge down only slightly by 2030.
For this year, the report finds that global coal demand is set to rise by 0.5%, reaching a record 8.85 billion tonnes. In the US, higher natural gas prices and policy measures slowing the retirement of coal plants lifted consumption, which had been on a downward trend for the previous 15 years, it notes.
When burned, coal’s planet-heating emissions are far larger than other fossil fuels like oil and gas. Quickly reducing the use of coal is critical to meet climate goals, experts say, and countries agreed to phase it down at the COP26 climate summit in Glasgow in 2021.
But responding to a question from Climate Home News, Keisuke Sadamori, the IEA’s director of energy markets and security, told a press briefing this week that the JETPs in Indonesia and Vietnam had so far failed to “bend the curve”.
Fabby Tumiwa, head of the Institute for Essential Services Reform(IESR) who advised the Indonesian government on the JETP deal, said the country’s JETP is “stalling” partly because the wealthy country partners have not funded the early retirement of coal-fired power plants.
A draft Indonesian energy plan seen by Climate Home News in August 2023 said Indonesia would retire a sixth of its coal-fired power plant capacity by 2030.
But, after a row over finance with rich nations, that target was dropped from the final version published later that year. Instead, the plan said Indonesia would start shutting down coal plants before their scheduled closure no earlier than 2035.
Tumiwa told Climate Home News that the lack of international funding for early retirement has made it harder for JETP partner countries – including Germany, Japan and the UK – to ask Indonesia to stop building new coal-fired power plants.
Foreign banks involved in Indonesia’s $20-billion Just Energy Transition Partnership have also funded companies working on coal power expansion, a TBIJ and Climate Home News investigation reveals
After its pleas for grants not loans fell mostly on deaf ears, Indonesia has watered down its plans to shut coal power plants early
Even beyond 2030, early closures look in doubt. Recently, PLN cancelled a planto shut down the Cirebon-1 coal-fired power plant seven years early in 2035, citing the high cost of compensating the plant’s owner – despite promised financial support from the Asian Development Bank under its Energy Transition Mechanism.
Think-tank IESR argues that the health benefits from shutting down the polluting plant early would outweigh the financial costs, and that keeping the plant open is a sign that the government’s commitment to the energy transition is weakening.
Indonesia’s Chief Economic Minister Airlangga Hartarto said earlier this month that the Cirebon-1 plant is less polluting than others in Indonesia so it would be better to shut down those dirtier, older facilities first.
“Captive” coal growing
Tumiwa said another flaw in the JETP was its focus on coal power stations that provide electricity to the grid rather than “captive” coal power plants which directly power nearby industrial facilities including nickel and aluminium smelters.
By the time those working on the JETP realised that captive coal accounted for a significant chunk of capacity, it was too late to change the JETP’s design, Tumiwa said.
The IEA report said that coal use in Indonesia and Vietnam will rise mainly because of expanding electricity demand driven by economic and population growth. In Indonesia, in particular, the use of coal inindustries like nickel and aluminium is increasing, the report added. In Vietnam, the power-hungry manufacturing sector has driven the surge in coal consumption.
In both countries, JETP funding for clean energy has trickled in only slowly. Indonesia’s JETP, which promised to mobilise $20 billion by 2027, has delivered $3 billion so far, mostly as concessional loans. Japan has been by far the largest donor, providing almost $2 billion. In Vietnam, only three projects have progressed to funding arrangements, totaling less than $1 billion.
The IEA report said discussions have “intensified” in Indonesia around energy security, affordability and orderly transition pathways. The country has large reserves of relatively cheap coal and the country’s state-owned electricity company PLN has encouraged investment in coal mining and transportation.
Vietnam has also watered down its plans to shut coal plants and has imprisoned environmental campaigners. In May, European governments announced loans for a transmission line and two hydropower plants under the JETP, but no plans for early coal plant closures.
Ronny P Sasmita is a senior analyst at Indonesia Strategic and Economics Action Institution, a think-tank specialising in geopolitical and geoeconomic studies in Indonesia.
The devastation that has swept across Aceh, North Sumatra and West Sumatra in recent weeks has forced Indonesia to confront an uncomfortable truth. What unfolded was not only a natural disaster but a collision between an exceptional climatic cycle and a landscape steadily stripped of its natural defenses.
More than 600 people have now been confirmed dead in the country, more than four hundred remain missing, and entire communities have been torn apart by the force of water, mud, and debris that surged with little warning. The scenes have become tragically familiar, houses swallowed by landslides, rivers breaking their banks, villages buried under mud that once clung to forest roots no longer there.
This year’s climate pattern created the perfect storm. Meteorological agencies warned that an active monsoon phase combined with warm ocean temperatures would push rainfall to exceptional levels across western Indonesia.
A rare tropical storm then formed in the Malacca Strait, unleashing torrential rains and wind gusts for several days. The Malacca Strait is one of the least likely places on Earth for tropical cyclones to form, making this event an exceptional anomaly. What might have once been manageable seasonal extremes became lethal when these torrents met degraded catchments and eroded hillsides.
Heavy rain alone does not create walls of mud and logs crashing into villages, it is heavy rain falling on land that is no longer able to hold or absorb it. In many affected districts, people reported water arriving faster and more violently than anyone could remember, carrying with it an astonishing volume of uprooted trees and logs that locals insist did not come from natural forest fall alone.
Conveyor belts of timber
This is where public suspicion has grown. The floods across the three provinces did not just bring water, they brought evidence. Viral videos showed rivers transformed into conveyor belts of timber, beaches covered with logs, and bridges jammed with uprooted trunks.
Environmental groups quickly pointed to long standing problems of deforestation and illegal logging that weaken watersheds and destabilize slopes. Some officials at the local level echoed these concerns, noting that the amount of cut wood carried by the floods appeared far beyond what would be expected from natural tree fall.
While the national government has cautioned against drawing conclusions too quickly, insisting that investigations into the origins of the timber are underway, the visual evidence has only deepened public frustration. Communities living downstream know what an intact forest looks and behaves like during heavy rain, and they know what a damaged one unleashes.
Legal concessions worsen problem
Recent data reinforces the scale of the problem. Independent monitoring groups reported that Indonesia lost more than two hundred sixty thousand hectares of forest in 2024, with over ninety thousand hectares lost on the island of Sumatra alone. This level of annual loss places Indonesia among the world’s highest tropical deforestation hotspots. Although much of this deforestation occurred inside legal concessions, the ecological impact is no less severe.
When natural forest is cleared, whether for plantations, industry, or illicit timber extraction, the soil becomes exposed, drainage shifts, and slopes lose integrity. Even more troubling, authorities uncovered a major illegal logging operation in the Mentawai Islands in late 2025, seizing more than four thousand cubic meters of illicit timber. This suggests that illegal extraction remains alive in areas where oversight is weak and access is difficult.
Such practices hollow out forest structure in ways that are not always visible until disaster strikes. Government policy has played an ambiguous role in this trajectory. On one hand, Indonesia has made international commitments to curb deforestation and has deployed satellite based early warning systems to identify suspicious land clearing.
On the other hand, the expansion of legal concessions for agriculture, timber, and mining has allowed vast tracts of natural forest to be converted. Even when legal, these transitions often degrade watersheds and reduce the natural capacity of landscapes to regulate water.
Local governments, strapped for revenue and political support, frequently view concessions as economic lifelines, while enforcement against illegal operators remains uneven. The result is a patchwork of legal and illegal pressures that steadily erode ecological resilience.
Protecting forests is a safety issue
The tragedy in Sumatra marks a warning that can no longer be ignored. Climate variability is intensifying, rainfall extremes are becoming more frequent, and the combination of strong storms and weakened landscapes will make disasters deadlier if current trends continue.
Indonesia cannot control the monsoon, but it can control the health of its forests. Protecting the remaining natural forest in Sumatra is no longer simply an environmental issue, it has become a matter of public safety and national stability.
Looking forward, the government must take a sharper turn. Enforcement against illegal logging must be strengthened through transparent monitoring and community based surveillance in remote areas. The issuance of new concessions in sensitive watersheds should be paused while existing ones undergo ecological audits.
Local governments in Sumatra need sustained funding for reforestation and slope stabilization projects, not one off emergency responses. Finally, national and provincial authorities must collaborate to restore degraded catchments before the next extreme rainfall arrives.
Sumatra has paid an unbearable price for years of ecological neglect combined with a climate growing more volatile. The next disaster is a question of when, not if. Whether it becomes another national tragedy or a turning point will depend on how seriously Indonesia treats the forests that remain standing and the people living beneath them.
Families stranded on their rooftops. Homes buried by fast-flowing mud. Jagged brown craters scarring lush green hillsides.
The scenes are the result of a series of cyclones and storms in a heavy monsoon season that have struck Asia with torrential rains, gutting essential infrastructure and reshaping landscapes. The violent weather has killed at least 1,200 people in the past week and forced a million to flee without knowing whether their homes will still be standing when they go back.
Sri Lanka and Indonesia have deployed military personnel as they race to help victims of devastating flooding that has killed more than 1,100 people across four countries in Asia.
Millions of people have been affected by a combination of tropical cyclones and heavy monsoon rains in Sri Lanka, parts of Indonesia’s Sumatra, Thailand and Malaysia in recent days.
