The transition away from coal and towards greener industries in the Asia-Pacific (APAC) presents profound social challenges, sparking urgent debates on who bears the cost of “going green.” This just transition imperative involves balancing decarbonization goals with the socioeconomic well-being of workers, small businesses, and communities reliant on coal and carbon-intensive sectors.
Did you know that Asia plans to phase out a third of its coal power plants, potentially cutting a billion tonnes of CO2 annually? Major coal-dependent nations like Vietnam, Malaysia, Indonesia, and the Philippines are accelerating coal retirements while grappling with ensuring workers and communities are protected amidst energy transitions.
What is driving attention to social sustainability and just transition in APAC?
The economic displacement caused by coal plant closures and industrial transformation has far-reaching effects, not only job losses but also ripple impacts on local businesses and social fabric. Growing recognition that unplanned or abrupt coal phaseouts risk social hardship and political backlash has pushed governments, civil society, and investors to prioritise social safeguards and inclusive policies. Ensuring affordable and reliable energy access alongside clean energy rollout is also critical to avoid exacerbating inequalities.
How are coal phaseouts and industrial shifts impacting key stakeholders?
- Workers: Many coal plant employees and fossil fuel sector workers face unemployment or job insecurity. Limited unionisation and scarce retraining programs heighten vulnerability, prompting calls for comprehensive workforce readiness assessments and skill development initiatives.
- Small businesses: In regions where coal drives economic activity, small enterprises suffer from declining demand and disrupted supply chains, challenging local economies. Adaptation support and diversification policies are essential to sustain these communities.
- Communities: Coal-dependent areas risk socioeconomic decline, erosion of community ties, and challenges to social cohesion, making just transition frameworks crucial to maintain stability and inclusion.
How can policymakers and industry stakeholders advance just transitions in APAC?
- Develop whole-of-economy strategies: Coordinate energy, labour, social welfare, and industrial policies to spread benefits and mitigate risks holistically.
- Implement robust social safety nets: Provide unemployment benefits, pensions, reskilling, relocation support, and community regeneration programs.
- Promote dialogue and stakeholder participation: Engage workers, businesses, local leaders, and civil society in transition planning to ensure legitimacy and align interventions to local realities.
- Leverage transition finance innovations: Use tools like energy transition credits and carbon credit insurance to fund and de-risk coal phaseout projects benefiting communities.
- Phase coal retirements gradually: Maintain grid stability and affordable energy access by sequentially retiring plant units and replacing them with renewables while prioritising social safeguards.
Strategy&Ops supports industries and communities in designing and implementing just transition policies and programs that balance decarbonization goals with social sustainability. We facilitate stakeholder engagement, workforce planning, and financing mechanisms tailored to APAC contexts, enabling inclusive green transformations.
The social dimension of Asia’s energy transition is no longer optional but imperative. Ready to shape a just and sustainable green future for APAC’s workers and communities? Contact our multidisciplinary team at info@strategyandops.net to learn more.
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References
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Asia Natural Gas & Energy Association (ANGEA) (2025) ‘Discussion point: pragmatic pathways to coal phaseout in Asia by 2035’. Available at: https://angeassociation.com/discussion-point-pragmatic-pathways-to-coal-phaseout-in-asia-by-2035/
APEC Energy Working Group (2025) Conversion of Coal-Fired Power Plants Using Energy Storage Systems: Experiences, Challenges, and Opportunities, March. Asia-Pacific Economic Cooperation Secretariat. Available at: https://www.apec.org/docs/default-source/publications/2025/3/225_ewg-conversion-of-coal-fired-power-plants-using-energy-storage-systems.pdf?sfvrsn=3dc5e344_1
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Green Central Banking (2025) ‘Indonesia sends mixed messages on coal phaseout’, GreenCentralBanking, 13 May. Available at: https://greencentralbanking.com/2025/05/13/indonesia-sends-mixed-messages-on-coal-phaseout/
Manish Shakdwipee, Elchin Mammadov & Guido Giese (2025) Simulating a Managed Phaseout of Coal-Fired Power Plants in the Asia-Pacific Region. MSCI Sustainability Institute. Available at: https://www.msci-institute.com/wp-content/uploads/2025/03/Simulating-a-Managed-Phaseout-of-Coal-Fired-Power-Plants-in-the-Asia-Pacific-Region.pdf
Powering Past Coal Alliance (2025) ‘PPCA at CEM16 recap’, PoweringPastCoal.org. Available at: https://poweringpastcoal.org/news/ppca-at-cem16-recap/
Peh, G. (2025) Mapping coal phaseouts in key Asian markets. Institute for Energy Economics & Financial Analysis (IEEFA). Available at: https://ieefa.org/resources/mapping-coal-phaseouts-key-asian-markets
Sustainable Energy and Climate Analytics (2025) ‘Coal phase-out’, Climate Analytics Projects. Available at: https://climateanalytics.org/projects/coal-phase-out