Global thermal coal demand will shift away from China in coming years as it switches to cleaner energy, but emerging markets in the region will step in to grab some of that flow as they continue their race to industrialize.
During the last decade global coal demand has largely been driven by a booming China, but in a move to curb pollution, the government is keen to switch to cleaner fuels to generate electricity, such as natural gas, nuclear and renewables.
Even if China cuts back its coal habit, analysts say global coal use will still increase as southeast Asia's economic rise will be fuelled by coal, proof of the theory that few countries have industrialized effectively without heavy use of a fuel blamed for pollution and climate change.
This shift will shake up the pattern of Asian seaborne coal trade, which currently focuses on routes between shippers such as Australia, Indonesia or South Africa to established consumers in China, Japan, South Korea and Taiwan.
With Indonesia, southeast Asia is already home to the world's biggest thermal coal exporter, potentially giving it dominance over this future growth market.
"Indonesia will likely supply much of the extra demand in southeast Asia, as their shipping costs will obviously be much lower," said Ray Colleran, who markets coal for Colombian producer Cerrejon, a joint venture between Anglo American (AAL.L), BHP Billiton and Glencore Xstrata.
The Indonesian Coal Mining Association thinks the country's coal output could treble by 2030 to 955 million tons, with domestic demand rising to 300 million tons from around 100 million tons currently.
The coal boom in Asia's emerging markets is a result of a historic link between developing economies and the use of coal.
"The trend (in coal demand growth) is consistent with what was experienced during periods of rapid economic and energy demand growth in other major developing countries in Asia, notably China and India," the International Energy Agency (IEA) said in an energy report on Southeast Asia this month.
Because generating electricity from coal is much cheaper than using gas, and likely to remain so, demand for seaborne imports in Southeast Asia will grow from 53 million tons in 2013 to 248 million tons in 2035, according to energy consultancy Wood Mackenzie.
OVERALL COAL DEMAND RISES
Analysts say that rising demand from emerging economies will be enough to offset falling coal use in developed country markets.
South East Asia could account for a third of global coal demand growth between now and 2035, meaning that the fuel overtakes oil as the world's dominant fuel source by 2020, both the IEA and Wood Mackenzie say.
Eager not to leave this booming market to Indonesia, other major coal exporters, such as Australia, Colombia, South Africa and the United States, will also compete for new customers in countries like Vietnam, Malaysia, Thailand and the Philippines.
The United States, for example, is trying to expand its export capacity on the Pacific coast in order to find markets for coal to replace domestic demand lost because of cheap shale gas, although environmental protests and shorter-term concerns about demand have delayed major expansion.
Colombia, which has so far relied largely on supplying coal customers in Europe and North America, hopes the upcoming expansion of the Panama Canal will give it better access to the Pacific market.
Some analysts even say China's demand will continue to rise as coal-fired power simply shifts to resource-dependent, fast-industrializing western provinces even as richer eastern areas cut use for environmental reasons.
China's current stock of coal-fired power, much of it connected to the grid in the last 10 years, and the 300 gigawatt (GW) of coal-fired power the IEA expects will be built in the world's biggest energy consumer this decade means these plants will be operating through the 2030s and into the 2040s, providing solid demand for the fuel.
"A coal-fired plant is a very expensive capital expenditure. Once it is built, there are high odds that it will be burning coal for many years," said the IEA's coal analyst Carlos Fernandez Alvarez.
And even if China's growth in coal use were to slow sharply, the world's second-biggest importer India is likely to experience big growth in coal-fired power despite the prospect that renewables will garner an increasing share of the country's energy mix, analysts point out.
Additionally, demand for the fuel in China and India is likely to be helped by an unlikely source - a growing appetite for gas and the development of coal-to-gas projects.
The Chinese government has already approved 20 coal-to-gas plants that could yield almost 80 billion cubic tons of synthetic natural gas a year, requiring 300 million tons of coal, and this figure might rise if more permits are issued, according to Chi-Jen Yang, a U.S.-based academic with Duke University and specialist on China's syngas industry.