Fair Finance Asia Urges Banks to End Coal Financing in ASEAN

PHNOM PENH – Fair Finance Asia (FFA) and the Influencing Just Energy Transition in the ASEAN (I-JET) initiative have called on banks and investors to stop financing coal expansion and to strengthen social safeguards in the region's energy transition.

The call was made in a new report, Phasing out Coal, Phasing in Justice: Roadmap for Financing a Responsible Regional Coal Phase-out in Asia, which assesses the transition landscape in Cambodia, Indonesia, Lao PDR, the Philippines and Thailand, and in ASEAN more broadly.

While ASEAN member states have introduced coal moratoriums, updated Nationally Determined Contributions, early-retirement plans for coal-fired power plants, green taxonomies and carbon pricing, the report finds these measures still fall short of a Paris-aligned 1.5°C pathway.

International coal finance restrictions have expanded, yet funding persists through corporate lending and upstream mining, the report says. Liquefied natural gas (LNG) is meanwhile being positioned as a bridge fuel despite high costs, price volatility, stranded assets and fossil fuel lock-in.

For a credible and just phase-out, the report recommends no new coal development — including for artificial intelligence (AI) and digital demand; time-bound, enforceable phase-out plans with zero unabated coal; permanent retirement or conversion of all units with site remediation; an end to coal financing, including for "false solutions"; and binding just transition commitments.

It also calls for strong social safeguards: income support, reskilling and decent green jobs for affected workers; meaningful participation, free, prior and informed consent (FPIC) and secure land rights for Indigenous Peoples; gender-responsive policies; and protection of civic space and of environmental and human rights defenders.

"The test is not only whether coal-fired power plants close, but whether the energy transition reduces inequality by protecting the rights and amplifying the voices of workers, communities, women and Indigenous Peoples," said FFA programme lead Bernadette Victorio.

Shubert Ciencia, Energy Justice and ASEAN Influencing Programme Manager at Oxfam in Asia, said the ASEAN Plan of Action for Energy Cooperation (APAEC) 2026-2030 signals the bloc's intent to accelerate decarbonisation while maintaining energy security, adding that member states "must now restrict investment in existing coal projects and prohibit new ones".

The PRAKARSA executive director Victoria Fanggidae said climate commitments were "meaningless if financial flows continue to support coal", urging Indonesian financial institutions to redirect capital to renewable energy.

JACSES programme director Yuki Tanabe said governments should drive early retirement of coal plants through stricter environmental regulations and higher taxes on coal generation.