While United States president Donald Trump’s sweeping tariffs have unsettled global markets and mounted pressure on Asian countries to buy liquefied natural gas (LNG) to address trade imbalances, energy experts warn that the fossil fuel will not address the region’s energy security woes.
Asian governments from Thailand to Japan have been rushing to sign up for LNG purchases from the US, hoping to reduce trade surpluses with the world’s largest economy.
But instead Asia should look to its largely untapped renewables potential, said Laurie van der Burg, global public finance campaign manager at nonprofit Oil Change International.
Van der Burg cited a 2023 report by United Kingdom-based energy think tank Ember which showed how the Southeast Asian region alone has 27 gigawatts (GW) of solar and 6.8GW of wind installed capacity as of 2022, representing only less than 1 per cent of approximately 30,523 GW of solar and 1,383 GW of wind potential estimated by the National Renewable Energy Laboratory (NREL).
This was validated by a new Ember study that found that some Asian countries like Indonesia have about 80 times greater renewable potential than its energy demand; India has 26 times as much, while China has about 20 times as much.
Indonesia has 80 times greater renewable potential than energy demand, and therefore could achove achieve energy dependence. Source: Ember
“Instead of bowing to Trump’s bullying, Asian countries should listen to their communities who have seen firsthand the damage caused by increased LNG import dependency,” van der Burg said, noting how gas dependency has resulted in blackouts like the one that occurred in an LNG plant in Malaysia, rising debt in Pakistan, and devastating climate and health impacts in the Philippines.
“By doubling down on renewables and energy efficiency, Asian countries can dramatically cut import costs and avoid increased dependency on unstable regimes like the US. The only guarantee for Asia’s energy security, independence and affordability for all is a just transition to renewables,” she added.
Christina Ng, managing director and co-founder of Australia-based think tank Energy Shift Institute, said the region can stabilise its clean tech sector by building up its own domestic deployment.
Countries such as Indonesia, Vietnam, and the Philippines have massive untapped solar and wind capacity, which could become a buffer against export volatility, she said, referring to research from the International Energy Agency that estimates that Southeast Asia has over 20 terawatts (TW) of combined technical potential for utility-scale solar PV, onshore and offshore wind.
“This is a chance for Southeast Asia to move up the value chain – from being seen as mainly a low-cost assembler to becoming a leader in designing and building more advanced clean energy technologies,” said Ng. “If the region takes this moment seriously and diversifies, it won’t just weather the disruption; it will emerge more resilient and competitive.”
Locking into long-term US LNG: a ‘costly mistake’
Long-term contracts with US suppliers would expose South and Southeast Asian markets to higher LNG costs and uncertainty in both US gas markets and trade policy, said Sam Reynolds, research lead, Institute for Energy Economics and Financial Analysis (IEEFA), an energy think tank.
Signing long-term commitments to buy US LNG would be a “costly mistake,” said Reynolds as liquefaction costs for new US export projects are rising due to the country’s tariffs on steel, aluminium, and other inputs, while Henry Hub gas prices are also expected to increase in the coming years.
This view was echoed by Ember’s new analysis which found that Asia is most exposed to fossil import risk, as a quarter of the world, led by Thailand, Korea, and Pakistan, spends over 5 per cent of GDP on annual fossil imports.
Asian countries Thailand, Korea, and Pakistan are some of the most exposed to fossil import risk. Source: Ember
Thailand announced plans this month to import more than 1 million tonnes of LNG from the US over the next five years, as part of efforts to ease the trade imbalance that led Washington to impose a high tariff on Thai exports.
Indonesia will propose increasing its imports of crude oil and liquefied petroleum gas from the US by around US$10 billion as part of its tariff negotiations.
Japan, South Korea, and Taiwan are considering investments in a long-delayed US$44 billion LNG export project in Alaska backed by Trump. The Philippines is also exploring options with the same project, while Vietnam signed a memorandum of understanding in March with Texas-based gas firms ConocoPhillips and Excelerate Energy.
Bangladesh signed a major agreement with Louisiana-based Argent LNG in January as India’s GAIL revived long-term LNG contracts in February.
Asian countries should instead seize renewable energy opportunities by diversifying their energy mix and maximising the deployment of clean technologies like wind and solar, he said.
Reynolds added: “Not only would this help support domestic renewable manufacturing industries, but it would also present a hedge against volatile commodity prices and currency exchange rates. In contrast to the prolonged instability of global fossil fuel markets, renewable energy presents a critical, cost-effective pathway for sustainable growth in Asia and globally.”
