Asia Pacific: the new epicentre of global energy growth

The centre of gravity of the global energy system has definitively shifted eastward, driven by rapid industrialisation, expanding urban populations, and rising living standards. Over the past decade, global primary energy demand in Asia-Pacific countries grew at twice the global rate, and the region now accounts for 46% of global energy consumption and more than half of the world’s electricity demand. However, over a third of that energy demand growth has relied on unmitigated coal consumption, more than the combined contribution of gas and renewables in the entire region. Meanwhile, two-thirds of this incremental energy demand originated from China alone, which is pursuing a massive electrification strategy largely built on coal and renewables.

Focus on Asia

This shift towards Asia Pacific is expected to continue over the coming decades. In the IEA’s Stated Policies Scenario (STEPS), the region contributes to around half of the increase in global energy demand to 2050, dwarfing the contribution of any other region. However, this apparent continuity masks two major changes. First, primary energy demand growth to 2050 is expected to be solely concentrated in India and Southeast Asia. In contrast, China’s energy demand will ultimately decline after a modest increase over the coming decade; yet, this does not mean the country will remain idle, as it doubles down on its renewable-based electrification strategy. 

Additionally, the region is expected to shift from its previous coal-based growth to increasingly rely upon a combination of renewable energy and gas. It is also projected to capture around 60% of incremental power demand, driven by a combination of rapid electrification and increasing economic activity — especially in South and Southeast Asia — as well as the build-out of data centres to support artificial intelligence and digital economies.

A complementary role to renewables

Natural gas is expected to help meet this soaring electricity demand and growing industrial demand, although it is fair to acknowledge that the contribution of incremental gas-fired generation to the overall electricity mix remains marginal compared to that of renewables and even nuclear. Rather than displacing coal on its own, natural gas plays a complementary role to renewables. 

The Asia Pacific region already includes the world’s four largest LNG-importing countries (China, Japan, South Korea, and India); together, they account for half of current global LNG demand. Looking forward, Asia Pacific will remain the primary anchor for LNG imports.

However, most of the incremental growth will be outside of these existing key markets: the latest Shell LNG Outlook 2026 underlines that the bulk of global LNG demand growth to around 700 mtpa by 2050 is projected to come from the “rest of Asia”, meaning Asian countries aside from Japan, South Korea, China, and India. This incremental demand will also be driven by declining gas production in Southeast Asia. However, LNG import growth will also be conditional upon the timely deployment of regasification terminals.

The ultimate path of Asia Pacific’s energy trajectory and fuel mix will be determined as much by the financial viability and deployment speed of clean tech as by policy choices. The question is whether South and Southeast Asian countries will indeed opt massively for LNG given the two gas crises that have occurred in less than five years, or whether they will turn slightly more to renewables coupled with coal, a fuel valued as a secure, domestic resource by many Asian nations. 

LNG exporters in the US and the Middle East will have to demonstrate that their LNG supply is both secure and affordable to convince these new importers. Asia Pacific is not only the indispensable LNG demand sink, but a market where emerging LNG importers are expected to play a major role compared to current heavyweights such as China and Japan.