Countries Like Japan Are Removing Barriers to Ramp Up Coal Plants Amid Global LNG Crisis

As energy security concerns mount amid ongoing disruptions in the Middle East, several nations are reversing course on coal phase-outs and ramping up existing coal-fired power plants. Japan is the latest example, with the government preparing emergency measures to lift restrictions on older coal facilities for the fiscal year starting April 2026. This move comes as liquefied natural gas (LNG) supplies tighten due to conflict-related disruptions in the Strait of Hormuz and halted exports from key producers like Qatar.

The Nikkei reported that Japan’s Ministry of Economy, Trade and Industry (METI) will advise an expert panel on temporarily boosting coal plant utilization rates as an emergency response to the Iran situation. Prime Minister Takaichi’s administration aims to maintain high coal-fired generation despite long-term decarbonization goals, prioritizing a reliable power supply for the coming year. Japan’s top utility, JERA, has already committed to keeping coal plants at elevated operating levels.

This is not an isolated case. Across Asia and beyond, the current LNG crisis—triggered by U.S.-Israeli actions against Iran that have choked shipments through the Strait of Hormuz and caused spot LNG prices to double to three-year highs—is forcing utilities to dust off coal assets. Countries that had been aggressively shifting toward gas and renewables are now prioritizing coal to avoid blackouts and control costs. Analysts at Wood Mackenzie note that the conflict could slash Asian LNG demand growth significantly in 2026, while Global Energy Monitor warns that $107 billion in planned LNG infrastructure investments in South Asia are now at risk.

Asia’s Coal Revival: From Caps Lifted to Decommissioned Units Restarted

South Korea has lifted caps on coal-fired electricity generation (previously limited to around 80% in some cases) and is boosting nuclear output to compensate for LNG shortages. Thailand is preparing to resume operations at two coal units decommissioned last year at its largest plant, Mae Moh, and has ordered full-capacity runs across its coal fleet. The Philippines is ramping up coal-fired power while slashing LNG output, and Vietnam’s state utility EVN is urgently negotiating additional coal supplies. Bangladesh has increased coal generation and imports, while India is burning more domestic coal to meet summer demand peaks. Pakistan is shifting to locally mined coal for off-peak hours, and Indonesia is prioritizing domestic coal use.

These steps echo the 2022 Russia-Ukraine energy shock but are happening faster and across both developing and advanced economies. Reuters reports that utilities are using existing coal plants at higher capacity factors or bringing idle units back online because regional or domestic coal supplies are more secure and cheaper than volatile imported LNG.

In the United States: Policy-Driven Coal Extensions and a Potential New Build

The U.S. is also seeing a coal resurgence, though driven more by surging electricity demand from AI data centers and policy support under the Trump administration than by direct LNG shortages. The Department of Energy (DOE) has issued multiple emergency orders under the Federal Power Act to keep plants scheduled for retirement online, including units in Colorado (Craig Station), Michigan (J.H. Campbell), and others in Indiana and Washington. Over 17 GW of coal capacity has been preserved through these actions in 2025 alone, with the administration providing $175 million in funding for upgrades and modernizations at six plants serving rural communities.

In a notable development, the Interior Department announced an agreement in principle for what could be the first new U.S. coal-fired power plant in over a decade—a large facility in Alaska using advanced boilers from South Korea’s Hyundai. President Trump has also directed the Pentagon to procure power from coal plants and issued executive orders emphasizing coal’s role in meeting data-center-driven demand growth.

Where New Coal Plants Are Actually Being Built

While many Western nations and parts of Asia focus on extending existing coal life, the real growth in new coal capacity remains concentrated in Asia’s two largest economies. According to the latest Global Energy Monitor (GEM) data (January 2026 release), China and India dominate global coal development:China: Record activity continues, with 78 GW commissioned in 2025 and 161 GW in new or reactivated proposals—the highest in recent years. Construction starts hit 94 GW in 2024 (latest full-year data), and the country accounts for the vast majority of global coal pipeline activity.

India: Proposed a record 38 GW of new coal power in 2024 (latest detailed figures), with plans for over 90 GW by 2032. India and China together represented 92% of all new global coal proposals that year.

Outside these two nations, new coal proposals have fallen to their lowest level in two decades. Just eight countries proposed any new plants in 2024, and OECD nations (including the U.S., Japan, Australia, and Turkey) now have only five active proposals total—down 96% since 2015. Southeast Asia, Latin America, and Africa have seen sharp declines or near-zero new proposals, with many countries committing to phase-outs.

Implications for Energy Security and the Energy Transition

The current crisis underscores a harsh reality: in times of supply shock, coal remains the quickest and most reliable backup for many grids. However, environmental groups and analysts warn that prolonged reliance risks higher emissions and delays the shift to renewables. Some see a silver lining—high LNG prices could accelerate investment in domestic renewables once the immediate crisis eases.

For now, energy security trumps long-term climate targets in capitals from Tokyo to Washington. How long these emergency coal measures last—and whether they become permanent—will shape global energy markets for years to come.