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Offshore oil and gas expansion threatens key marine ecosystems, report warns
Ocean and coastal creatures are being put at risk by the spills, noise, dredging and shipping associated with new offshore oil and gas infrastructure, says a new report by a group of environmental NGOs.
The report by 12 environmental groups analysed planned new offshore oil and gas blocks covering 430,000 square kilometres – an area the size of Sweden – in 11 countries.
Blocks in countries such as Kenya, Indonesia and Australia overlap with some of the planet’s hotspots for marine biodiversity, home to mangroves, coral reefs, sea turtles, sharks and whales.
Oil and gas expansion is advancing in spite of the legal protections already in place, the report says, with a third of the area being licensed overlapping with marine and coastal protected areas.
“It is alarming to see the research findings and the sheer scale of fossil fuel expansion trajectories threatening the health and future of our shared ocean,” said Tyson Miller, executive director of Earth Insight, one of the environmental NGOs involved in the report.
At the first conference on Transitioning Away from Fossil Fuels in Santa Marta, around 60 countries floated the idea of creating “fossil fuel-free zones”, which would seek to place limits on coal, oil and gas in areas where development would lead to severe social and environmental harm.
As part of the landmark Kunming-Montreal biodiversity deal, governments have also pledged to protect at least 30% of the planet’s land and marine ecosystems by 2030. This could be used as an opportunity to limit oil and gas expansion in sensitive areas, Miller said.
The report says the findings “reinforce the need for governments, financial institutions and companies to stop funding and supporting offshore oil and gas expansion”, and calls for the creation of fossil fuel-free zones in “high-value marine and coastal areas”.
Oil bidding in biodiversity hotspotsAs one of the case studies, Kenya — which is set to host the Our Ocean Conference in Mombasa later this month — has opened 50 offshore oil and gas blocks for bidding in the Lamu Basin, one of East Africa’s marine biodiversity hotspots.
These blocks overlap with all the region’s mangroves and coral reefs, the report says, which provide nursery habitats for fish, sea turtles and the vulnerable dugong.
These ecosystems are already under severe stress from climate change-related ocean heating and increased water acidity and could now face seismic surveys, offshore drilling, dredging, increased shipping traffic, oil spills, chemical discharge and underwater noise pollution.
The government estimates that oil production will start by 2026, aligning with “global best practices”, and has said the Lamu basin has vast “untapped potential”. The country is expected to open bidding for the first 10 blocks by September.
Muturi wa Kamau, network coordinator for the Kenya Oil and Gas Working Group, said in a statement that the country “is preparing to open ecologically sensitive areas for fossil fuel exploration” while positioning itself as a leader in ocean diplomacy.
“The question is: at what cost are we willing to risk these fragile ecosystems and the livelihoods of coastal communities who have depended on them for generations?” Kamau said.
Australia’s Otway BasinAfter a four-year pause, Australia — which will act as co-president of the COP31 climate summit — resumed offshore exploration in the Otway Basin last year, with American energy firm ConocoPhillips among the operators approved for exploratory drilling off the country’s southern coast.
The sites under exploration are as close as one kilometre to a series of marine reserves known as sanctuaries for pygmy blue whales, who travel thousands of kilometres to reproduce in those waters. Orange roughy, a deep-sea fish that can live for over 140 years, may also be harmed.
In total, the report analysed new LNG export projects in Argentina, Alaska, Mexico and Tanzania, as well as expanded offshore oil and gas licensing in Australia, Cameroon, Indonesia, Jamaica, Kenya, Norway and Trinidad and Tobago.
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The scramble to stockpile critical minerals could drive up energy transition costs
As competition for minerals needed to produce clean energy technologies intensifies, a growing number of countries have resorted to an age-old mechanism to cope with the threat of scarcity: stockpiling.
The world’s biggest economies are racing to shore up reserves of cobalt, lithium, graphite and rare earths, which are needed to produce batteries, electric vehicles, wind turbines and electric systems to wean the global economy off fossil fuels. The same minerals are also increasingly sought after to manufacture military hardware and chips for AI, adding further pressure on supplies.
But the cutthroat scramble to build up reserves threatens to drive up the costs of the energy transition by intensifying competition and pushing up prices of key materials needed to produce clean energy technologies, research published today has found.
“If you undermine the financial viability of [clean energy] projects through higher raw material costs, you’re going to delay their roll-out,” co-author Hugh Miller, the critical minerals lead at the Centre for Economic Transition Expertise at the London School of Economics and Political Science, told Climate Home News.
Stockpiling “is happening, whether we like it or not”, said Miller. “But if we’re going to do it, we need to have it in a coordinated manner that means we don’t have massive market volatility and adverse implications from every country trying to go at it alone,” he added.
The rise of stockpilesA growing number of governments have adopted national stockpiling programmes in response to heightened geopolitical tensions around mineral supply chains.
Earlier this year, US President Donald Trump announced the establishment of a critical mineral reserve known as “Project Vault” to protect American businesses from shortages after China imposed export restrictions on rare earth supplies.
US Secretary of State Marco Rubio delivers opening remarks at the Critical Minerals Ministerial in Washington DC (Credit: Official State Department photo by Freddie Everett)Beijing suspended the measures until November as part of a trade truce with Washington but the episode spooked Western governments and exposed how strategic materials can be weaponised to achieve geopolitical objectives.
Australia, China, the EU and India have also announced measures to create strategic mineral reserves. Japan and South Korea already have long-standing mineral stockpiling programmes.
“Legitimate concerns”“There are legitimate concerns with regards to potential global shortages of these minerals,” said Miller, citing rapidly rising and concurrent mineral demand for the energy transition, AI, data centres, and military technologies, combined with underinvestment in new supplies for some minerals, such as copper.
While stockpiling can serve as an emergency response mechanism during acute shortages, it does nothing to address the underlying concentration risks in mineral supply chains. The Democratic Republic of Congo holds around 70% of the world’s cobalt reserves, for example, while China dominates the processing of 19 out of 20 minerals deemed critical by a large number of nations.
Uncoordinated stockpiling programmes risk heightening the price volatility they are designed to hedge against, according to the report.
Researchers found that if Australia, China, the EU, India, Japan, South Korea and the US simultaneously built reserves of minerals to cover six months of imports, the aggregate stockpile demand could represent up to 34% of global annual cobalt supply and over 10% of global lithium, graphite and copper supply. That could cause a shock to the market, triggering the shortages and price spikes they are trying to avoid.
Miller said it was unlikely that every country would stockpile at that rate, but aggregate stockpiling demand of just 5% of global mineral supply would have an impact on prices.
Coordinating stockpiles: a role for the IEA?Researchers found that avoiding the negative impacts of stockpiling requires global coordination over how mineral stocks are accumulated and released – a mechanism which already exists for other commodities, including oil.
Coordination should include agreed rules for countries to build up their stocks over a slow and staggered timeline and pre-agreed conditions for releasing reserves to provide market predictability and reduce the risk of price spikes.
The International Energy Agency (IEA), which was established after the 1970s oil crisis to coordinate emergency oil stock releases among member countries, is best placed to oversee such a mechanism, they say.
Earlier this year, IEA member countries called on the agency to strengthen its work on critical minerals, including by providing support to countries “that choose to establish and expand critical minerals stockpiling systems”.
But Miller and his co-author Pau Morandi, a policy fellow at the Centre for Economic Transition Expertise, argue that members should go one step further and mandate the IEA to coordinate the security of supplies, rather than only helping individual governments.
The IEA has been contacted for comment.
A call to action for the G7Miller said he hoped the research could be picked up by the G7 group of wealthy countries, which could lead on mandating the IEA to take on this coordination role.
France, which is presiding over the group this year and is hosting leaders in Evian on the shores of Lake Geneva in mid-June, has made strengthening the resilience of critical minerals value chains a priority.
In a communique last month, finance ministers agreed to “deepen and expand our cooperation among G7 members and with like-minded partners” to strengthen and diversify critical mineral supply chains and to continue discussions “on how to best organise analytical cooperation”.
Sebastien Treyer, executive director of the Paris-based Institute for Sustainable Development and International Relations (IDDRI), said he hoped the G7 leaders’ summit can help move the discussion on critical minerals towards greater international cooperation to secure the resources the world needs to build a clean economy.
From inclusive and mutually beneficial partnerships to mine resources to stockpiling minerals, “we need to coordinate more like a trade organisation than something that is about securing supply,” he said.
The post The scramble to stockpile critical minerals could drive up energy transition costs appeared first on Climate Home News.
What to expect from the Bonn climate talks
Most media outlets won’t be in Bonn, but we will. Sending our reporters to cover these international negotiations is expensive, but at a time when many newsrooms are cutting their climate coverage, it’s more important than ever. If you value our reporting, you can support our work and access all our exclusive coverage by becoming a subscriber today.
The annual June climate talks in Bonn are taking place this year against the backdrop of an oil and gas supply crisis tied to the Iran war and deadly heatwaves in Europe, India and the Middle East. Can they produce anything substantial to ease the squeeze on economies and communities around the world?
Watchers of the negotiations say the UN climate process is under pressure to prove its worth at a time when climate action and clean energy offer an increasingly attractive alternative to the global economic and political instability brought by fossil fuel dependency.
Kaysie Brown, associate director of climate diplomacy and geopolitics at think-tank E3G, said the June 8-18 meetings “must show that the multilateral system can make a durable and politically resilient shift to support delivery [of climate action] at scale”. She added that it “will act as a key health check for the climate regime at a time of a rapidly shifting global order”.
There are hopes for significant progress on issues ranging from a new mechanism to support a just transition away from fossil fuels, to funding and measuring adaptation to worsening climate impacts.
Bonn will also see the launch of dialogues on trade and climate change, on how to implement what was promised in the first stocktake of national climate plans in 2023, and on ways to shift global finance flows to support a low-carbon and climate-resilient world.
Climate Home News doesn’t have a crystal ball, but we have done our homework. Here’s what experts expect to top the agenda at the World Conference Center by the River Rhine:
COP31 prioritiesBonn is where we will get a sense of what the joint COP31 hosts – Türkiye and Australia – want from their presidency. Signs are that they will push for a global goal on the share of final energy consumption that will come from electricity, which may be based on a target proposed by the International Renewable Energy Agency of 35% by 2035.
Watch back: Webinar – From Santa Marta to Bon, where next for the fossil fuel transition?
Other priorities already identified include energy storage, energy security and clean cooking. Türkiye has stressed reducing emissions from landfills as a priority for the “Action Agenda” strand of COP31, which encompasses government and business initiatives outside the formal discussions. Türkiye will lead on the Action Agenda, while Australia handles the negotiations.
Just transition mechanismThe Bonn negotiations are tasked with producing a draft decision on how to set up a new just transition mechanism that can facilitate a fair and orderly shift from a high-carbon world to a greener future. This decision will be forwarded for approval by countries at COP31.
Governments agreed at COP30 in Brazil to set up what civil society has dubbed the “Belém-Antalya Mechanism” (BAM) but the details have yet to be worked out. Climate Action Network International, which has advocated strongly for the global mechanism, said it should be designed to provide decent jobs, social protection, public investment, energy access and support for affected workers and communities.
How Belém launched the Just Transition mechanism
“If governments move decisively, the [BAM] could become one of the most significant developments in the climate regime since the Paris Agreement – helping connect climate action with economic transformation and tangible improvements in people’s daily lives,” the coalition of hundreds of green groups said in a statement ahead of Bonn.
Let’s talk tradeAt COP30, after two years of trying, emerging economies finally got the overlap between trade and climate policy onto the UN climate talks agenda. Governments agreed to hold dialogues on trade at the June Bonn talks in 2026, 2027 and 2028 before a summary of these dialogues is presented at a “high-level event” in 2028.
What aspects of trade are to be discussed at the first such dialogue on Saturday June 13 is undecided. Developing-country heavyweights like China and India will likely be keen to criticise the European Union’s new carbon border adjustment mechanism, which they regard as protectionist and burdensome for their exporters. Representatives of the World Trade Organization and other trade bodies will make presentations, which governments and civil society will be allowed to comment upon.
Brazil’s call for COP trade forum gets lukewarm response
On Sunday June 14, a separate meeting of the fledgling Integrated Forum on Climate Change and Trade – an initiative launched by the Brazilian COP30 Presidency – will take place in a grand hilltop hotel overlooking Bonn and the Rhine. The meeting is not part of the official UN climate process or the official Bonn talks and will be more informal than the previous day’s dialogue.
Topics that will be discussed are trade and climate adaptation, how to create a level playing field for low-carbon products, how to trade particularly polluting products and how to bridge climate and trade tools. An expert panel chaired by South Africa’s Faizel Ismail and New Zealand’s Jo Tyndall has been appointed to advise the forum.
Aligning on adaptationAt COP30, talks on finalising a list of indicators to measure progress on adapting to climate change ended in recriminations, with several Latin American governments complaining that the decision was adopted by the Brazilian presidency without their consent.
The indicators, which were developed by experts in a two-year process, were stripped down by the Brazilians on the last night of COP30 and presented to governments at the last minute as a done deal.
New data shows rich nations likely missed 2025 goal to double adaptation finance
Several governments and some of the technical experts have argued that many of the adopted indicators are unworkable, as they lack definitions or explanations of how they will be measured. Many indicators for important areas – like poverty reduction, ecosystems, infrastructure and food production – are missing or inadequate, they say.
Government negotiators and experts now have two years to fix the mess, through a “policy alignment process” due to end at COP32 in Ethiopia. At the Bonn talks, governments will try to agree on who will make up a new taskforce of experts to help countries put the indicators into practice and how it will operate.
Our most in-depth Bonn coverage — including most of our Bonn Bulletins from the negotiating floor — will be available exclusively to paid subscribers. Sign up today to ensure you don’t miss out.
Mission to 1.5 and Global Implementation AcceleratorAfter pressure from small island nations, governments at COP30 agreed to set up the Belém Mission to 1.5 and the Global Implementation Accelerator (GIA) to speed up the implementation of countries’ emissions-cutting and adaptation plans.
For the Mission to 1.5, several past and current COP presidencies are drawing up a report – scheduled to be published before COP31 – which will identify several especially impactful solutions to climate change. On June 12 in Bonn, governments and civil society will weigh in on what they want included.
Also in Bonn, governments will input into the GIA. The Brazilian COP30 Presidency’s vision is that it should drive forward the strongest climate solutions. According to COP30 CEO Ana Toni, an independent panel of experts will pre-select 10-15 solutions and a council will narrow this down to three to five each year which the GIA would then aim to speed up.
The GIA’s “added value is that it will focus exclusively on solutions with the potential to scale and generate cascading effects through high-impact exponential technologies”, she said last month.
A person points at a stack of trays holding treated limestone, used to absorb CO2 from the air, at Heirloom’s new plant, in Tracy, California, November 9, 2023. (Heirloom Carbon/Handout via REUTERS) A person points at a stack of trays holding treated limestone, used to absorb CO2 from the air, at Heirloom’s new plant, in Tracy, California, November 9, 2023. (Heirloom Carbon/Handout via REUTERS)Whether Mission to 1.5 and the GIA will identify the same shortlist of solutions – and how they work together – is unclear. But the GIA could become a permanent body working on the real-world “Action Agenda” of COPs.
Ruenna Haynes is the deputy lead negotiator for the small islands group (AOSIS) which pushed for these two initiatives, but she is now worried about what the COP presidencies might make of them.
She told a recent briefing, “the last thing we want to do is to set up a process that is nothing more than a talking shop that doesn’t deliver and doesn’t go anywhere”. To avoid that, the reports of the GIA and Mission 1.5 must be linked to the wider UN climate talks process and at least discussed by governments, she emphasised.
Finance roadmap and dialogueCOP30 left a bitter taste regarding what was expected to be one of its main outcomes: progress on how to increase climate finance through the “Baku to Belém Roadmap to $1.3 trillion”. The initiative, included in the new finance goal agreed in Baku – the NCQG – was an effort to top up the 2035 target of $300 billion a year in public finance which fell short of what developing countries wanted and an independent panel of experts estimated would be needed.
The high expectations surrounding this roadmap began to fade during 2025 as the process lacked transparency, clarity, participation and ambition. The result was a report abundant in general recommendations of actions to be taken but lacking clear commitments. Most of the suggestions mentioned are targeted at institutions outside the UN climate process, such as multilateral development banks.
The COP30 decision merely “took note of” that report. So was it the end of the road for this particular roadmap? Not yet.
From Baku to Belém and beyond: How we turn a climate finance roadmap into reality
In Bonn, an “implementation” meeting will be held to “listen to the Parties and observers on the updated work being carried out,” as a member of the COP30 Presidency team told Climate Home News. The challenge is how to ensure the roadmap doesn’t remain fine words in a document and is put into practice. It will also serve either as a good or bad example for the other two voluntary roadmaps (on deforestation and fossil fuels) that the Brazilian presidency is putting together ahead of COP31.
Also in Bonn, the Veredas Dialogue will address the opportunities and obstacles to implementing Article 2.1.c of the Paris Agreement – on making finance flows consistent with low-carbon development – and its complementarity with Article 9 on the responsibility of developed countries to provide financial resources. The limitations of the Baku to Belém Roadmap could shift the divisions between developed and developing nations to this dialogue, especially considering that 2026 is the first year for mobilising finance under the NCQG.
More roadmaps on fossil fuels and forestsAt COP30, a group of 80 countries led a failed push to kickstart a process for a global roadmap to guide the transition away from fossil fuels (TAFF). As an alternative, the Brazilian presidency proposed to draft two voluntary roadmaps: one on phasing out fossil fuels and another to end deforestation by 2030, both commitments endorsed by all countries in the COP28 deal.
In the lead-up to Bonn and after months of consultations with countries, Brazil presented an outline for the forest roadmap – which will invite countries to submit their own voluntary national roadmaps to halt forest loss.
It will also include a menu of options to bridge the $216-billion forest funding gap. One of the key initiatives to achieve this is the new rainforest fund, the Tropical Forest Forever Facility (TFFF), which is still rallying investors for seed funding. Brazil convened an investor meeting in Rotterdam last week, with participation from over 50 financial institutions – including BlackRock, Bank of America and Barclays – and 30 government representatives.
COP30 rainforest fund unlikely to make first payments until 2028
While not on the formal negotiating agenda In Bonn, Brazil will continue consultations on the forest roadmap at an event with governments on June 8. The final document is expected to be published later in September.
As for the TAFF roadmap, Brazil will hold an open event on June 12 after receiving suggestions from 120 countries. It is expected to be informed by the first global fossil fuel phase-out summit held in Santa Marta in April.
COP30 advisor Flávia Bellaguarda told an online briefing that the informal sessions in Bonn are meant to open a “space for dialogue” on both roadmaps, and that the more countries engage, the more international relevance the process gains.
“We managed to get the elephant into the room. Now, it needs to stay there. For that, we need to give him plenty of food so he can’t fit through the door and leave. We achieve that with dialogue and creating space for genuine exchange,” the Brazilian advisor said.
The post What to expect from the Bonn climate talks appeared first on Climate Home News.
China’s carbon emissions rise again as more clean power is wasted
China’s carbon emissions bounced back up in early 2026 as “inflexible” grid management caused the country to waste vast quantities of clean power and burn more fossil fuels instead, new analysis shows.
After recording a first full-year decline in 2025, China’s carbon dioxide (CO2) emissions from energy and industry grew by 2% in the first quarter of 2026, according to analysis by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief.
China burned more coal and gas to generate electricity than in the same period a year earlier, despite building record wind and solar capacity. Instead of being integrated into the network and used, clean power equivalent to more than France’s entire electricity output for the quarter was discarded.
Coal power plants protectedLauri Myllyvirta, CREA’s lead analyst, said the paradox was primarily caused by China’s inflexible operation of coal and gas power plants, which supply electricity through long-term contracts that remove any incentive to reduce output when cheaper solar and wind power is available.
Electricity trading between Chinese provinces, also based on annual contracts, prevents surplus renewable energy from flowing to other areas in real time, the analysis found.
Santa Marta process can confront trade protection for fossil fuels, experts say
Myllyvirta said all operators should be required to sell electricity in real time so that coal power plants would face competition from very low prices during hours of strong renewables output and have an economic incentive to cut down generation. “But that has not made a lot of progress in China,” he added.
Curtailment rates risingThe intentional reduction of renewable energy generation, a process known as curtailment, saw a significant increase in China at the start of 2026, reaching 9.2% for solar and 8.5% for wind respectively, according to Bloomberg.
Myllyvirta noted that real curtailment rates are likely to be even higher than those reported in official statistics. He added that, until tracking improves, there won’t be enough political pressure to fix the issue.
The findings highlight Beijing’s failure to make full use of its record renewables build-out to accelerate the country’s transition away from fossil fuels.
If curtailments had not risen, increased capacity means wind and solar could have generated an extra 170 terawatt hours of electricity (TWh) in the first quarter, more than satisfying the growth in power demand, CREA’s analysis found. But, instead, clean power generation rose by just 60 TWh, with wind showing almost no growth.
Electricity generation from solar (left) and wind power (right) in China, terawatt hours per 12-month period. Red: Electricity actually fed into the grid. Yellow: Generation before reported levels of “curtailment”, where some electricity is discarded due to grid congestion. Blue: Generation if the rate of curtailment had stayed constant. Source: China Electricity Council monthly data on installed capacity and utilisation; National New Energy Consumption Monitoring and Early Warning Center data on curtailment Electricity generation from solar (left) and wind power (right) in China, terawatt hours per 12-month period. Red: Electricity actually fed into the grid. Yellow: Generation before reported levels of “curtailment”, where some electricity is discarded due to grid congestion. Blue: Generation if the rate of curtailment had stayed constant. Source: China Electricity Council monthly data on installed capacity and utilisation; National New Energy Consumption Monitoring and Early Warning Center data on curtailment Global problemChina is not alone in under-utilising its full renewable energy potential. Curtailments have risen in countries including the UK, Australia, India, Chile and Brazil, primarily as a result of bottlenecks in national transmission systems unable to accommodate additional clean power output.
After failing to keep up with the installation of renewable generation capacity, annual investments in updating grids need to increase by around 50% by 2030, according to the International Energy Agency. The watchdog said that, if power networks fail to prevent high levels of curtailments, clean energy operators risk facing significant revenue losses, threatening the investment case for renewables.
One of South America’s largest clean power generators said on Wednesday that it was putting plans for $1 billion in new renewables investment in Brazil on hold as the country’s grid operator rejected up to 25% of the power its existing projects could produce, Reuters reported.
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Investor climate group closes down, blaming “limits” of shareholder activism
In 2021, amidst a wave of corporate net-zero targets, a campaign group called Investors for Paris Compliance was set up in British Columbia, aiming to use investor pressure to hold Canadian companies to account on their climate promises.
In the five years since, the group has notched up several wins: pressuring National Bank into providing $20 billion of finance to renewable energy, getting Royal Bank of Canada to improve its green finance labels and persuading 20-25% of investors to regularly back climate proposals at annual general meetings (AGMs) for shareholders.
But last month, the group’s then executive director Matt Price put out a statement saying it was shutting down. Despite some progress, Price explained, his organisation had concluded that “investor accountability has reached its limits”.
Companies and their investors often understand that climate change threatens the economic system, Price said. But, he added, they do not respond adequately because they are worried that, if they do, their competitors will not put in as much effort and could therefore gain a financial advantage.
This “tragedy of the commons” situation cannot be fixed by shareholder advocacy, Price said, but instead needs litigation, regulatory action and accountability mechanisms. “Some of our team will take those things on in new initiatives,” he said.
Price’s words echo the findings of a London School of Economics (LSE) report published last month, based on workshops with asset owners and managers in New York, Amsterdam, London and Singapore.
Government policy keyThe LSE report noted that “action by investors on climate change is severely constrained by their duties, the limited tools at their disposal and the pathways of technology development”. To be effective, pressure from climate-conscious investors must be coupled with government policy that incentivises green investment and technological innovation, the authors concluded.
An investigation by the Guardian recently found that, despite overwhelming shareholder support for its climate action plan, Australian mining company BHP has carried on buying polluting diesel trucks instead of electric ones. The Australian government subsidises diesel, saving BHP hundreds of millions of dollars a year.
As EU acts to stop greenwash, funds drop climate claims from their names
Lindsey Stewart, director of institutional insights for investment research firm Morningstar, told Climate Home News that investor activism does work but it “doesn’t do everything that people expected it to do towards the beginning of the 2020s”.
“There is a limit to what can be achieved by minority shareholders exercising their votes and engaging with companies. Quite a lot, it does seem, is reliant on the legal and regulatory framework,” he said, adding that the closure of Investors for Paris Compliance shows this “realisation is sinking in a lot more than perhaps it was in 2020, 2021, 2022”.
Decline of investor activismStewart said that in the early 2020s, investor activists were pushing companies for “things that were sort of already on the regulatory conveyor belt anyway”, like companies setting targets for their operational (Scope 1 and 2) emissions, disclosing their carbon footprints, and assessing their exposure to risk from climate change.
With this low-hanging fruit picked, green-minded investors have moved on to make demands that are more controversial and have received less support from other investors, he said. He gave examples of just transition reporting, green capital expenditure financing ratios for banks and disclosing emissions from the use of products a company sells, known as Scope 3 emissions.
On top of this, Stewart said, there has been pressure from the “right-wing political establishment in the US” against investors taking climate change into consideration. BlackRock, which manages $9.5 trillion of assets, has walked back its climate commitments after pressure from US Republicans.
More fundamentally, Stewart described the idea that fossil fuel majors would dismantle their oil and gas business and transform into renewables companies as a “pipe dream on the part of environmentalists”. “Why would they have the skill or capability, or even the stakeholder backing, to completely transform a business of that size?” he asked.
Shareholder activism is only possible at privately owned and listed companies, while most investment in oil and gas is now coming from state-owned companies, like Saudi Arabia’s Aramco. In 2025, less than a quarter of investment was from oil majors like BP and Shell.
Business backlash shows powerYet despite the uphill climb, Mark van Baal defends shareholder activism. He runs an Amsterdam-based campaign group called Follow This, which has tried to get investors to vote for pro-climate resolutions at the AGMs of oil and gas multinationals.
He accepts that success peaked around 2021, but says the effort oil and gas firms are now putting into winning over shareholders and discouraging pro-climate resolutions – which he characterised as “the Empire Strikes Back” – shows the power of shareholder activism, which was previously underestimated.
Mark van Baal is the head of Follow This (Photo: Follow This)In January 2024, ExxonMobil sued Follow This, aiming to block the group’s climate resolution. Fearing the case would end up in the Supreme Court, where conservative judges could set an anti-climate precedent, Follow This withdrew the resolution.
But, said van Baal, although the legal battle created a “chilling effect among investors”, it is a “proof point that shareholder pressure works and that they’re really afraid of the shareholders”.
Vote, don’t sellStewart and van Baal both agreed that selling, or threatening to sell off shares is not an effective way to change a company’s behaviour.
It allows less climate-conscious investors to buy the shares, they said, adding that there is no evidence that threats to sell shares and therefore lower the valuation over climate concerns have influenced company management.
Van Baal said the share price is set by short-term traders, not long-term shareholders like the pension funds he works with.
How Shell is still benefiting from offloaded Niger Delta oil assets
Nonetheless, investors’ engagement should be forceful, van Baal insisted – and not just within their comfort zone of talking to management about sustainability behind closed doors without voting for it at AGMs. “Shareholder democracy is the only democracy where voting is called escalation,” he said.
The Follow This website says that only investors can stop fossil fuel companies destroying the planet. “Marches didn’t change their minds. Lawsuits didn’t stop them. But shareholders can,” it trumpets.
But van Baal told Climate Home News this wording is “too strong” and may have to be revised, adding that shareholder activism just “fits me more than gluing myself to roads” and is a tactic he “stumbled on” 11 years ago.
Legal, political and investor activism can reinforce each other, he added. When Friends of the Earth sued Shell alleging inadequate climate action, for example, the green group’s lawyers cited the company’s rejection of a Follow This resolution as evidence. “The pressure needs to come from all sides,” van Baal said.
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Indonesia’s failing Just Energy Transition Partnership is a cautionary tale
Freddie Daley is a research associate with the Centre for Global Political Economy at the University of Sussex. Charlie Lawrie is a postdoctoral associate at the University of Sussex.
In December 2025, Indonesia quietly abandoned plans to close the Cirebon-1 coal power plant. This was no ordinary power plant. Cirebon-1 was supposed to be the centre-piece of a $21.4 billion (£16.5bn) international deal backed by the US, UK, Japan and the EU to help Indonesia end coal use.
Indonesia’s so-called Just Energy Transition Partnership, or JETP, was launched at a G20 summit in Bali in 2022. Similar deals have been struck with South Africa, Vietnam and Senegal. They are widely regarded as the most ambitious attempt at getting international climate finance to end coal use in populous, coal-dependent middle-income countries.
The UK government once touted the JETPs as “a template on how to support just transition around the world”. This refers to efforts to ensure that the phase-out of fossil fuels and phase-in of low-carbon technologies is fair, inclusive and reflects the demands of workers and affected communities.
But if this approach cannot retire a single plant in Indonesia, the world’s fourth largest coal consumer, there is reason to question whether the model itself works. Our research suggests these partnerships are better understood as a cautionary tale.
Investors neededThe idea underpinning the JETPs is elegant in theory: use public money from rich countries to attract private investment for renewable energy projects and closing down coal plants.
Grants from governments and low-cost loans supposedly reduce the risk enough to bring in billions more from banks and asset managers. The public money “unlocks” the private money, and together they fund an energy transition that benefits the public through cleaner air, reliable energy and reduced climate risk. Win, win.
But across all four JETP countries, the private money has yet to materialise at the scale envisioned. In Indonesia, as of early 2025, only around $1.1 billion of public money had been disbursed. But the country’s plan for decarbonising electricity estimates it needs $97 billion in investment by 2030 – a cavernous gap.
More troubling still is the lack of consolidated financial reporting for the JETP funds. Fifty separate funding packages within the Indonesian JETP, all with their own financial instruments and accounting frameworks, make it all but impossible to track how much money has been spent.
As international climate law expert Lukas Bogner has argued, this kind of finance creates complex bureaucratic layers that recipient countries must navigate.
Why investors haven’t shut coal plantsDecommissioning a coal plant is not like building a new one. It means buying out existing contracts, compensating investors for lost future profits, and renegotiating complex legal agreements.
Even then, the electricity the plant provided still needs to be replaced. This requires further investment in generation systems that may not yet exist. Investors have little appetite for any of this, and the costs fall primarily on the state.
In fact, the supposed unlocking of private investment with public money raises a perennial tendency: private capital moves where returns are highest and risks lowest.
Investors in London and New York, for example, demand high returns from middle-income economies like Indonesia, yet baulk at complex regulatory environments, state-owned electricity companies, powerful coal interests and mounting sovereign debt burdens. Public money can make some projects more attractive, but will not remove the supposed political and economic risks investors see in countries like Indonesia.
The energy transition deal aims to wean Indonesia off coal, which now takes up nearly half of the country’s electricity mix. Photo: Kemal Jufri / Greenpeace The energy transition deal aims to wean Indonesia off coal, which now takes up nearly half of the country’s electricity mix. Photo: Kemal Jufri / GreenpeaceThe JETP also means loading Indonesia with more debt. Of the $21.4 billion now pledged, only 2.6% comes in the form of interest-free grants. Most JETP finance would arrive as commercially-priced loans which Indonesia must eventually repay.
In other words, Indonesia is being asked to borrow more to decommission coal assets that currently generate government revenue and employment. At the same time, it will have to purchase renewable electricity from the privatised companies that would replace them.
In the words of one of our interviewees, the Indonesian state is expected to “pay twice” – once to close the old system, and again to buy power from the new one. Trade unions in Indonesia have been blunt about what this means in practice. Under the JETP model, they warn electricity will no longer be treated as a public good, but as a commodity that ordinary Indonesians will pay more for.
Why rich countries are “reluctant” on additional JETP coal-to-clean deals
The JETP model can also weaken the same state institutions needed to manage the energy transition. Countries that have managed rapid clean-energy booms, from China to Vietnam, have done so through strong state-owned enterprises, clear industrial strategies and the ability to direct investment and discipline business.
The JETPs, by contrast, are designed around a diminished role for the state and a central role for private capital. This happens through regulatory reform, the creation of new private markets, or through investor-friendly technologies.
In the case of Indonesia, this “de-risking” agenda explains the pressure to break up the national electricity company and sell off its assets – a prospect fiercely resisted by trade unions, civil society and even wealthy groups who profit from the existing system.
A broken model?International climate finance remains important. Rich countries must still fund energy transitions in the Global South. But the Indonesian JETP suggests that relying on private investors to deliver coal phase-outs may be the wrong model.
Alternatives do exist, from proposals for much larger grant-based financing to the Bridgetown Initiative proposed by Barbados’s prime minister, Mia Mottley, which would use International Monetary Fund resources to support climate investment. More radical proposals call for publicly-owned, worker-led transitions. But so far, these ideas have made little progress.
Our research suggests just transitions are more likely when governments receive direct grants that help them retain the capacity to shape their own energy systems, and to support domestic industries through green industrialisation.
The failure to decommission Cirebon-1 matters beyond Indonesia. It suggests the world’s flagship model for financing the end of fossil fuels isn’t working. And the longer it takes to admit that, the harder the transition becomes – for Indonesia, and for everyone.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Young South Africans take up sustainable agriculture for food security
In a school in South Africa, a group of students stare at a row of small plants growing in a greenhouse. Each one is involved in the lesson, caring for the growing crops.
But this is no ordinary classroom setting. These children are learning about aquaponics, a method of growing plants and fish in a mutually beneficial water system. This ancient technique of food production is now being taught to millions of schoolchildren after being introduced by the South African government seven years ago.
Laerskool Kempton Park on the edge of Johannesburg was one of the first schools to introduce the subject with the aim of improving food security. This is a serious challenge in a country where an estimated 19.7 million people, or around 30% of the population, experience moderate levels of food insecurity, meaning that they struggle to afford enough food for a healthy, balanced diet.
Aquaponics is a way of supporting communities to access food in a sustainable and efficient way. The solution is simple: fish waste is turned into available nutrients by bacteria in the water. Plants absorb these nutrients and the cleaned water is returned to the fish tank.
There are multiple benefits to this approach. The system doesn’t require chemical fertilisers, soil or large tracts of land. It is also highly efficient, with recirculated water being used over and over again. This is an important feature in areas of South Africa that experience drought or unpredictable weather.
Agricultural subsidies can be repurposed for a just and sustainable rural transition
Aquaponics can offer a range of benefits depending on the local context. In South Africa, townships in major cities such as Johannesburg don’t always have the space to produce their own food, while in other places, such as the Northern Cape, extreme weather is making agriculture much harder.
Learners participating in a practical aquaponics lesson in Kempton Park. Image: INMED Learners participating in a practical aquaponics lesson in Kempton Park. Image: INMED Schoolchildren observing fish grown in an aquaponics system. Image: INMED Schoolchildren observing fish grown in an aquaponics system. Image: INMEDAt Laerskool Kempton Park, the students have benefited from the innovative work of INMED, a non-profit organisation that supports vulnerable children and families in the country.
INMED has trained hundreds of teachers and over 7,000 children on the benefits of aquaponics. With the help of funding from the Adaptation Fund through the UNDP-Adaptation Fund Climate Innovation Accelerator (AFCIA), the organisation was able to develop its own aquaponics system to be used in schools.
INMED describes its prototype as a ‘plug and play’ system, designed to be modular and easy to install and manage. The system includes a 2,000-litre fish tank powered by a solar pump to circulate water. The design is simple with a view that it could be easily replicated across different school settings.
Unathi Sihlahla, director at INMED South Africa, told Climate Home News that “aquaponics speaks to a number of challenges… including limited access to nutritious food, high youth unemployment, water scarcity, and in many cases, poor or no access to arable land.”
Giving nature breathing room builds climate resilience
INMED’s prototype allows communities to work around these problems as it doesn’t need soil and uses far less water than conventional agriculture.
“We’ve seen schools that previously had no food production now able to grow vegetables consistently, while also producing fish. That food often goes straight into school meals or supports vulnerable households nearby,” Sihlahla added. The project estimates that over 5,300 kilogrammes of food have been harvested in each quarter the system has been operating.
As aquaponics is now part of the school curriculum, many educational departments across South Africa have been looking at ways to teach the subject. INMED’s innovative design could provide a handy solution. The organisation has already started to roll it out across different provinces and a new collaboration with the Eastern Cape Provincial Department of Education is in the works. INMED is also scaling the ‘plug and play’ model in Tanzania.
Plant inspection at one of INMED’s ‘plug and play’ aquaponics prototypes. Image: INMED Plant inspection at one of INMED’s ‘plug and play’ aquaponics prototypes. Image: INMED Giving youth a sense of prideFor educators, teaching schoolchildren new agricultural skills is not only about improving food security, but also about creating the next generation of farmers. This group will need to grow food with the increased threat of extreme weather events and having knowledge of alternative methods, such as aquaponics, could be key.
“Agriculture is not seen as something young people want to go into, but when they are exposed to something like aquaponics, it feels modern and relevant,” said Sihlahla, adding that some students have started their own projects at home or are looking to continue studying the method.
“There’s also a sense of pride. Producing food that supports your school or community changes how young people see themselves and their role.”
Engaging the next generationThe Adaptation Fund’s support for young people extends beyond South Africa. Several other related projects aim to equip youth with practical skills for climate adaptation.
In Costa Rica, a $10-million project implemented by private foundation Fundecooperación included several creative youth-focused programmes in climate-vulnerable areas. It trained young people in coral reef restoration and farming techniques, involved high school students in community water resource monitoring and management, shared knowledge on adaptation through a theatre tour in schools, and created an art mural competition using AI.
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In Lesotho, meanwhile, climate education is being integrated into the school curriculum through climate-smart agriculture materials and teacher training rolled out across primary and secondary schools. This is equipping students from an early age with practical, locally relevant knowledge to build resilience.
“Children and young people are among the most vulnerable to climate change,” said Mikko Ollikainen, head of the Adaptation Fund. “These programmes are not only training young people in adaptation but empowering them.”
Adam Wentworth is a freelance writer based in Brighton, UK.
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Santa Marta process can confront trade protection for fossil fuels, experts say
Just as Colombia – a coal-producing country that has halted new exploration licenses for hydrocarbons – was set to host the first fossil fuel phase-out summit in late April, the government received notice from a foreign energy firm operating on its soil. It was being sued for millions of dollars.
One day before Colombia hosted representatives from around 60 countries for the first Global Conference on Transitioning Away from Fossil Fuels, Spain-based firm Termocandelaria Power, which operates two of the country’s diesel- and gas-fired power plants, sued the government for $198 million alleging a breach of investor protection rules under a bilateral agreement.
Termocandelaria said government measures since 2024 have prevented its Colombian subsidiaries from receiving full payment for the power they supplied to a public utility, while the Colombian government justified its actions as needed to guarantee financial solvency and deliver electricity to rural communities.
While Termocandelaria declined to comment for this article, the company said in a press release last month that investment protection treaties “are designed to provide a stable and predictable legal framework for long-term investments in strategic sectors”.
The timing shows how trade agreements that offer investors protection when government decisions are seen as causing harm to their business – a system known as investor-state dispute settlement (ISDS) – can hamper the transition away from fossil fuels even when countries are pushing for it. Governments in the Global South are particularly exposed, experts told Climate Home News.
As part of the official academic contribution to the Santa Marta conference, researchers recommended that governments should “recognise” ISDS as a barrier to the energy transition, and called for negotiations on an international initiative to dismantle ISDS protection for fossil fuel investments, either through “a new standalone” international agreement or as part of a broader treaty.
Mario Osorio, a research fellow at the Center for Economic and Policy Research (CEPR), said Termocandelaria’s claim against Colombia “puts in perspective how serious, concrete and real these threats are” for developing countries.
Osorio said the second fossil fuel transition conference – to be held next year in Tuvalu – presents an opportunity for advancing ISDS reform from discussion to “something more concrete”.
Plenary of the first conference on the Transition Away from Fossil Fuels in Santa Marta. (Photo: Ministry of Environment of Colombia) Colombia pledges to exit ISDSISDS is a mechanism in international trade that allows foreign corporations – many of them linked to fossil fuel interests – to sue governments in international arbitration courts. One 2022 study estimated that possible legal claims from fossil fuel investors could reach $340 billion.
In the lead-up to the Santa Marta conference, Colombian President Gustavo Petro pledged to exit the ISDS system by reviewing Colombia’s 129 investment protection agreements. This came after more than 200 economists sent Petro an open letter urging Colombia to abandon the ISDS system.
Eunjung Lee, a senior policy advisor at UK-based think-tank E3G, said the Santa Marta conference had helped elevate ISDS reform as a key element of the transition away from fossil fuels, despite the issue remaining relatively little-known, even among climate negotiators.
She added that governments tend to be cautious about discussing ISDS at climate summits, as these treaties also implicate trade and economy ministries. “If it is not your file, then you can’t really say much about it and taking action is not necessarily up to you,” she explained.
Kyla Tienhaara, Canada Research Chair in Economy and Environment and a professor at Queen’s University who has worked on the issue for two decades, said the conference in Santa Marta marked a new approach, and that Colombia had placed ISDS “prominently in the agenda”.
The next transition conference presents an opportunity for governments to land on something more practical, particularly under the agreed work stream on “macroeconomic dependence and financial architecture”, but it will depend on the co-chairs Tuvalu and Ireland, she said.
Ireland was sued in May by oil company Lansdowne for failing to award a lease in the Barryroe offshore field. The claim was made under the Energy Charter Treaty (ECT), which fossil fuel companies have used to sue several governments over the consequences of enacting their climate policies.
Following a similar move by some other European states, Ireland left the ECT in April while the Santa Marta conference was ongoing, but existing fossil fuel investments are still protected for 20 years under a “sunset clause”.
“Disappointing” conference reportDespite the prominence of the issue in the conference rooms, experts told Climate Home that the chairs’ takeaways report was “disappointing”, as it did not explicitly mention ISDS as a key obstacle to the energy transition.
The Netherlands, which co-hosted the summit, may have faced conflicting interests, said Tienhaara, as it is second only to the US as a “home state” for the investors bringing the most ISDS cases, including foreign companies structuring their investments through the country.
The Dutch government also withdrew from the ECT last year, which means it understands and has acted on the threat of investment treaties to climate action, the researcher said. “Unfortunately, they seem unwilling to extend their concern to the harm that these treaties cause in other countries, particularly in the Global South,” she added.
Lee of E3G said Global North countries like the Netherlands tend to export capital to developing countries, which is why they seek to protect their investors’ interests and are unlikely to drive a dismantling of the ISDS system themselves.
Developing countries like Colombia, which have been negatively affected by ISDS claims, have an incentive in “voicing their concerns” and forming a bloc around this topic. “Uniting Global South countries can make a stronger case,” Lee said.
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Agricultural subsidies can be repurposed for a just and sustainable rural transition
Orhan Solak is deputy director of Türkiye’s Directorate of Climate Change.
In today’s fraught economic context, everyone is looking to do more with less, and financing climate action is no exception. Yet there are clear opportunities to make better use of existing funding to achieve climate goals, including the repurposing of more than $700 billion in agricultural subsidies to support a just rural transition.
While public support for agriculture and food security has increasingly been reflected in global climate discussions, particularly in the context of the Paris Agreement’s Global Goal on Adaptation (GGA), the scale and urgency of current challenges call for stronger consensus and rapid implementation of practical, context-sensitive solutions.
The need to empower farmers to adopt sustainable practices, such as reducing food loss, cutting waste, building resilience and managing water resources wisely, is not a modern ethos. It echoes the model of Göbeklitepe, civilisation’s earliest-known settlement, built on the principles of solidarity, balance and harmony with nature.
This historical perspective underscores that sustainable resource management is deeply rooted in human development, and it reinforces the importance of aligning today’s agricultural transformation with both environmental integrity and social equity.
However, to date, public support for farming globally has largely prioritised synthetic fertilisers and input-intensive production models, often overlooking more sustainable, resource-efficient and resilience-oriented agricultural practices.
The good news is that countries are increasingly recognising that climate action cannot come at the cost of food security, dignified livelihoods and greater equality. Any transition to more sustainable food systems must be “just” for the farmers and the rural communities who underpin them.
Enhancing long-term food securityAs COP31 President, Türkiye will draw on its unique historical and geographical position as a bridge between regions and civilisations to foster dialogue, strengthen cooperation and mobilise collective efforts toward scaling up finance towards net zero targets, a vital pillar of this year’s COP31 climate talks in Antalya.
Moving forward, greater emphasis should be placed on supporting sustainable and climate-resilient agricultural systems through targeted investments, capacity-building, innovation and nature-positive practices.
Strengthening support for efficient water use, soil health, agroecological approaches and circular production models can enhance long-term food security while improving resilience to climate-related shocks.
Comment: Nature cannot be ignored by Europe’s next big budget
In this context, aligning agricultural policies and financing mechanisms with sustainability objectives will be essential not only for protecting natural resources, but also for ensuring inclusive rural development and intergenerational equity.
A just rural transition that achieves climate goals and zero waste without undermining agricultural communities and economies is not possible without countries providing the necessary financial support. Redirecting agricultural subsidies offers a promising path toward both objectives, but only when reform is carefully designed and sensitive to context. Done well, it can offer a way to ease pressure on governments to find fresh funding.
New high-level panel to offer alternativesThis is the mission of a new High-Level Panel for a Just Rural Transition, recently launched in Ankara. Together with panel members that include former heads of state, senior officials from international organisations, and government representatives from across Africa, the Americas and Europe, I believe we can provide governments worldwide with viable and sustainable alternatives.
In the context of heightened scrutiny over international aid and finance, redirecting existing funding makes both economic and environmental sense.
New data shows rich nations likely missed 2025 goal to double adaptation finance
In Türkiye, farm subsidies have, for several years, increasingly supported organic farming through an established certification system aligned with international standards. The Green Deal Action Plan, published in 2021, set out objectives to reduce the use of pesticides and chemical fertilisers, promote organic production, increase renewable energy use, and improve waste and residue management.
In addition, Türkiye’s Climate Change Adaptation Strategy and Action Plan (2024–2030) further strengthens this policy direction by integrating climate resilience considerations into agricultural practices and supporting sustainable land and resource management approaches.
Other countries are also embracing innovative approaches. Malawi, for example, is piloting a system in which subsidies for synthetic fertiliser are conditional on other, more climate-positive practices such as diversifying the crops planted to help improve soil health or applying soil conservation measures and managing soil organic matter. Elsewhere, the UK is also shifting to a model that rewards environmental stewardship through its Sustainable Farming Incentive (SFI).
The exact ways in which farm subsidies are redirected will depend on each country’s specific circumstances and needs, but the overall approach is one that stands to benefit all nations.
Channelling public support away from high-emission practices is not only a strategy for addressing today’s challenges, but also one that helps build long-term resilience.
Waki Munyalo works on her farm after harvesting her maize insured by an agricultural insurance company that helps small-scale farmers to manage the risk associated with extreme climate conditions, in Kitui county, Kenya, March 17, 2021. (Photo: REUTERS/Monicah Mwangi) Waki Munyalo works on her farm after harvesting her maize insured by an agricultural insurance company that helps small-scale farmers to manage the risk associated with extreme climate conditions, in Kitui county, Kenya, March 17, 2021. (Photo: REUTERS/Monicah Mwangi) Just Transition Mechanism consultations in BonnThis month’s Bonn Climate Conference will mark an important milestone on the road to COP31, helping to shape the agenda for the negotiations in Antalya six months later.
Countries will consult over the Just Transition Mechanism, the financial framework designed to ensure the transition to a climate-neutral economy is fair. This is a vital opportunity to ensure that agrifood systems and rural communities are placed at the heart of its agenda, and it is a moment to reinforce the philosophy of COP 31: from dialogue to consensus and action.
To accelerate climate action at the “COP of the Future”, we must learn from the past and improve upon it through strengthened dialogue, consensus-building, and concrete, action-oriented outcomes.
Countries should recognise that a just rural transition requires action not only from actors within the agrifood system, but across all relevant sectors and industries. Momentum is steadily growing, and under Türkiye’s COP31 Presidency priorities, this agenda is expected to feature prominently. This momentum sets the stage for a defining COP31 for climate equity and inclusive climate action.
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Q&A: How can African electricity access power jobs not just lightbulbs?
At the African Development Bank (AfDB) annual meetings this week, several African leaders called for investments in electricity infrastructure which go beyond lighting homes to powering economies.
Applauding the AfDB for its energy programmes like Mission 300 – which aims to provide electricity access to 300 million Africans by 2030 – the Central African Republic’s President Faustin-Archange Touadera said that without power supply “we will not be able to achieve development”.
Speaking alongside him, the Republic of Congo’s President Denis Sassou Nguesso echoed this, saying that “as we need to help our people to turn towards agriculture, to turn towards livestock rearing, we also need to provide power to them.”
As the Mission 300 initiative advances, the AfDB has launched a new progress tracker to provide real-time data on electricity access projects across Africa, including new connections, financing, project status and geographic coverage. It shows that Mission 300-supported projects underway so far are due to connect 34.6 million people, with all of the interventions focused on expanding household electricity access.
However, attention is increasingly shifting from simply connecting households to ensuring that electricity access translates into economic opportunities and livelihoods. That shift is driving the launch of a new Centre of Excellence for Productive Use of Energy being developed under Mission 300 by the philanthropically funded Global Energy Alliance for People and Planet (GEA).
In an interview with Climate Home News, Carol Koech, the GEA’s vice president for Africa, said the initiative is designed to ensure that electrification supports income generation, agriculture and local economic development rather than only basic household access.
Q: What is the Centre of Excellence for Productive Use of Energy aiming to achieve with Mission 300?
A: Mission 300 is increasingly being seen as a job platform – and so the role of the Centre of Excellence in translating those electricity connections to jobs. We want the centre to do four things. First, as a delivery engine, which enables countries to embed a cross-institutional advisor that supports the electrification components, but also other components that are happening in the country.
Second, we want the centre to be an innovation and strategy hub. Today, there’s really no place where you can go to find the state of the industry for productive use of energy across the globe, and we want to make the centre of excellence the place where you can go and get information about what technologies are available, where deployment is happening and how much is being deployed.
Campaigners in Africa are demanding their governments stop the development of fossil fuels on the continent and embrace the opportunities of renewable energy (Photo: Lighting Global/SunCulture/World Bank)The third pillar is to coordinate and mobilise capital. We anticipate the centre coordinating internally within the ecosystem but also mobilising additional financing to help productivity. The last piece is how to scale businesses, enterprises and partnerships around this centre because we anticipate that as we grow this space, new industries will emerge and those industries will need to be supported.
Q: Why is productive use of energy becoming important under Mission 300?
A: Mission 300 gave us a bigger platform to demonstrate that energy is truly an enabler for economic development. It’s not sufficient to just provide a connection, but it is required that that connection truly translates to economic development for the communities that benefit.
We shouldn’t bring electricity and then start thinking about what people can do with it. We need to think about both at the same time and ensure electricity arrives together with the things that will make a difference in people’s lives. Historically, we’ve brought electricity and imagined a miracle would happen, but we know that hasn’t been the case.
The question is how to ensure universal access in the cheapest way while still transforming communities. Some mini-grids have been deployed in places where demand is extremely low, making them too expensive to sustain. But when mini-grids are paired with productive uses, the economics start to change. If businesses currently running on fossil fuel generators move to solar or renewable energy, operating costs fall and the business case for mini-grids becomes much stronger.
Q: How could this work in practice for agriculture and rural communities?
A: I’ll give you a practical example in our pilot country Zambia. Zambia has two programmes, they have the ASCENT programme for energy access and they also have the Zambia agribusiness and trade platform (ZATP). Some of the components of the ZATP programme – which is an agri-business program to help farmers to be productive – have a productive use component but don’t have an energy supply component. So we’re offering things like mills, processing facilities, irrigation and others. In some parts of Zambia, these productive use equipment has been supplied but has not been powered, so communities are not benefiting from that.
So the whole point is if we coordinate where the agribusiness programme is deployed together with where the energy access programme is deployed and layer those two programmes together in one place, then you could solve the energy access problem and solve productive use together and therefore have really meaningful outcomes for communities.
Q: How will the centre help both households and small businesses use electricity productively?
A: The question on whether we should electrify households or businesses is neither here nor there. We need to electrify all. The argument is really once we electrify businesses, the owners of those businesses will be able to pay what they need for their households as well as increase production for their businesses.
Electricity consumption is usually an indicator of economic development and by pushing productive use into households, especially where households are also smallholder farmers, the question becomes: how can electricity access translate to additional economic development for them? If you are connected onto a mini-grid, then you can actually use that connection to run irrigation, put in a dryer, or a cold storage system, whatever you require to improve your income but the fact that you have energy means that you can access productive use. Now, we need to ask ourselves how do these farmers or these households then get access to these appliances, because that’s another barrier.
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The cost of these appliances is usually extremely high, and when you have programmes such as the ZATP running in Zambia, that’s already a public funding approach to making these appliances available and potentially reachable for farmers, either at household level, at farm level or at community level.
Q: How does this complement the already existing Mission 300 national energy compacts designed by countries?
A: Each of the national energy compacts have a productive use component, a pillar that talks about distributed renewable energy, productive use, and clean cooking. This is actually complementing the work of the countries, and this centre is like an available support, back office for countries to tap into as they implement their national energy compacts, if they have specific requirements and support for that pillar three.
So the advisers that will be embedded into countries, their role is to coordinate within country programs that are running where energy could make a difference. The advisers will be sourced from the country and so they will make sure that the donor money is coordinated to benefit the country fully. Their role will include going to ministries of agriculture or any related ministries and understanding where they are prioritising programmes that require electrification. In many cases, programmes and money have already been allocated, but this component is about how do we deploy it in a way that it actually truly brings a difference, so those advisers will do that.
Q: How will the centre address financing and private sector investment challenges?
A: What we’re really looking at is different financing mechanisms. In the past, we have provided subsidies and results-based financing to suppliers, distributors and manufacturers to help create markets for productive-use appliances. I see this as one mechanism the centre could use, but the bigger opportunity is aligning public funding across different programmes so that more of it can support productive uses, either through direct funding or subsidies.
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When it comes to private sector investment, the reality is that Africa’s energy sector still faces serious constraints. Most private investment has gone into power generation, particularly through independent power producers, and even then that has only been possible in places where the off-takers, usually utilities, are bankable.
To unlock more private capital, countries need the right policies, reforms and regulations, but even more importantly, utilities must become financially viable. If the off-taker is not bankable, then the project is not bankable.
Another major question is how to attract private investment into transmission infrastructure. There are different models being explored, but the reality is that public funding alone is not sufficient to achieve Mission 300, so finding new ways to mobilise private capital will be critical.
This article was updated after publication to add information about the Mission 300 tracker.
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COP31 must persuade countries to make fossil fuel transition plans
Andreas Sieber is head of political strategy at 350.org. Shady Khalil is a senior global policy strategist at Oil Change International.
COP31 will take place in the context of what Fatih Birol, the head of the International Energy Agency, has called the “biggest energy crisis in history” – an extraordinary warning from a typically measured leader. A UN climate summit that fails to address fossil fuel dependency, energy affordability and energy access will not only fail politically; it will fail economically and socially too.
The last COP in Belém created several important building blocks: a Global Implementation Accelerator, a Just Transition Mechanism, the climate finance work programme, an expanded Action Agenda linked to the first Global Stocktake (GST1), and the Presidency-led Belém Roadmaps on forests and transitioning away from fossil fuels (TAFF).
But COP31 will need to move from frameworks to delivery. The historic first international conference on the transition away from fossil fuels in Santa Marta, Colombia, in April added further momentum to this agenda.
Development hit to importing nationsThe countries paying the highest price for fossil fuel volatility are not the richest countries. The cost of dependency on fossil fuels is hitting importing low-income countries the hardest. Over three-quarters of the world’s population lives in countries that are net importers of fossil fuels. High energy prices push up food costs. Inflation fuels political instability. Debt burdens deepen. The fossil fuel crisis has become a development crisis. That is why COP31 matters.
The Presidency-led Belém Roadmaps on forests and TAFF are expected to be presented at COP31. The next step should be obvious: countries need domestic roadmaps showing how they will actually implement the transition at home.
A growing number are expected to develop such plans. COP31 should encourage them to put together domestic implementation roadmaps for shifting off fossil fuels that have concrete milestones, sectoral targets, investment strategies and policy measures.
At the same time, these processes must recognise that countries do not share the same starting points, capacities or development needs. For some, this may take the form of comprehensive roadmaps to phase out production and consumption, while for others the priority may be economic diversification, industrial transformation or expanding energy access and energy sovereignty.
Risk of disorderly transitionWithout credible planning and international cooperation, the transition risks being too slow and increasingly chaotic, with fossil fuel demand destruction occurring through rationing, price shocks and de-industrialisation rather than through a managed socially just transformation.
This stands in direct contrast to the GST commitment to an “orderly” transition away from fossil fuels. Domestic roadmaps can help chart more stable coordinated pathways that reduce social disruption while contributing to geopolitical and economic stability.
Türkiye and Australia should show leadership as the upcoming COP hosts. For Türkiye, this is particularly urgent given the absence of a coal phase-out date. Price spikes for oil and gas have siphoned around $3 billion from ordinary people and businesses in Türkiye in the first two months of the current crisis alone, calculations by 350.org show.
Australia faces a different credibility challenge. While positioning itself as a renewable energy powerhouse, it also remains one of the world’s largest fossil fuel expanders and is facing calls to tax its fossil fuel exports.
Watch CHN’s webinar: From Santa Marta to Bonn – where next for the fossil fuel transition?
According to Oil Change International, four Global North countries — the US, Canada, Norway and Australia — are responsible for nearly 70% of projected new oil and gas expansion between 2025 and 2035, equivalent to around three times the annual emissions of all coal-fired power plants worldwide.
Paragraph 36 of the Mutirão decision agreed at COP30 already invites governments to submit implementation and investment plans for their national NDC climate plans. Domestic TAFF roadmaps could become a practical way to operationalise that commitment, while also creating space for countries to define national pathways aligned with their own development priorities and constraints.
This matters because some of the most politically difficult elements of the first Global Stocktake in 2023 — especially the transition away from fossil fuels and halting deforestation — are where implementation lags furthest behind rhetoric. Governments continue to endorse transition goals but must more seriously address the harder questions: how workers are protected, how grids are modernised, how industries adapt, and how countries finance the shift while maintaining economic development and energy access.
Roadmaps for coordination and clarityDomestic TAFF roadmaps can help answer those questions. They allow governments to coordinate internally across ministries and externally with investors, development banks and international partners. They can provide clarity on timelines, infrastructure needs, financing gaps, industrial strategy and social protection. Most importantly, they can help ensure the transition is not only fast, but fair.
The first countries willing to develop credible transition roadmaps could also help rebuild international trust. They would demonstrate that a managed phase-out of fossil fuels can support economic development, create jobs, improve energy security and expand energy access rather than undermine them. That’s the spirit of the Santa Marta conference that now needs to be emulated.
This is also becoming a geo-economic issue. In a world increasingly shaped by bilateral deals, industrial competition and fragmented trade relations, countries with credible transition plans will be more insulated from global fossil fuel shocks, far better positioned to negotiate on debt restructure and cancellation, climate finance, technology transfer and industrial policy. Governments that know where they are going can shape the transition to their advantage.
Solar panels and wind turbines at the Vopak Solarpark in the industrial port of Eemshaven, Netherlands. (Photo: IMAGO/Jochen Tack via Reuters Connect) Solar panels and wind turbines at the Vopak Solarpark in the industrial port of Eemshaven, Netherlands. (Photo: IMAGO/Jochen Tack via Reuters Connect) Leaders’ support neededCOP31 also presents Türkiye and President Recep Tayyip Erdoğan with a rare diplomatic opportunity. At a moment of growing fragmentation between North and South — and between East and West — Türkiye could utilise its role as a middle power and serve as a bridge-builder capable of restoring high-level political momentum to the climate process and convene a leaders summit with wide attendance.
Leaders attending COP31 should help countries agree that TAFF roadmaps are a practical way to turn climate promises into real action. These roadmaps would reflect national realities while identifying needs for international and regional cooperation, including on financing and barriers to transition such as debt burdens, technology access and trade rules.
Ultimately, roadmaps for transitioning away from fossil fuels are roadmaps for economic resilience, energy security, and political stability in a far more volatile world.
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El Niño expected to bring next record-hot year as soon as 2027
The odds of a new global temperature record being set within the next five years have increased further, as the return of the El Niño weather pattern could make 2027 the hottest year ever, the UN’s weather agency has warned.
The World Meteorological Organization (WMO)’s annual update predicts an 86% chance that at least one year between 2026 and 2030 will surpass 2024 as the warmest year on record – up from 80% in last year’s forecast.
Global average temperatures reached 1.55C above pre-industrial levels in 2024, when the last El Niño event supercharged human-made warming primarily caused by the greenhouse gas emissions generated through burning fossil fuels.
El Niño to supercharge heat in 2027Meteorologists expect El Niño – the natural climate phenomenon characterised by unusually warm sea-surface temperatures in the eastern Pacific Ocean – to start developing as early as this month. Some forecasters say that this time around the event could become particularly powerful.
Leon Hermanson, the lead author of the WMO report, said the prediction of El Niño for the second half of 2026 “increases the chances of the following year, 2027, being the next record-breaking year”.
Researchers warn that a strong El Niño risks supercharging extreme weather conditions, contributing to more severe wildfires and droughts in some regions and storms and floods in others.
Scientists warn El Niño could intensify climate extremes in 2026
The UN agency says there is a 91% chance that the key 1.5C warming threshold will be temporarily exceeded again for at least one year between 2026 and 2030. An overshoot in a single year does not mean that the most ambitious global warming goal enshrined in the Paris Agreement has been lost. But the UN conceded last year that a “multi-decadal” breach is very likely to happen within the next decade.
Bill Hare, CEO and senior scientist at Climate Analytics, said the WMO’s warning that hotter years lie just ahead “is a result of governments’ historical failures to cut greenhouse gas emissions at sufficient scale”.
“This increases the need for investment in adaptation to extreme weather events and other impacts of climate change, and increases the loss and damage from such events facing climate-vulnerable nations,” he added in a statement on the update.
‘Astonishing’ early heatwave in EuropeWestern Europe has already been gripped by an early-season heatwave this month, with countries including the UK, France and Ireland recording their hottest May temperatures ever.
“Temperatures on this scale were once exceptional even at the height of summer,” said Friederike Otto, professor of climate science at Imperial College London. “Seeing 35C in the UK during spring is absolutely astonishing, but the science is very clear – climate change makes these heatwaves hotter, longer, and far more frequent”.
She added that “temperature records will continue to tumble until we fundamentally halt global emissions and reach net zero”.
In India, extreme heat in recent weeks has also threatened mango and other crops and pushed up power demand to an all-time high as people switch on air-conditioning, while pilgrims in Mecca have conducted their rituals during the annual Hajj pilgrimage in scorching temperatures.
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Recycling could meet half of Europe’s critical mineral needs by 2050
Recovering critical minerals from waste such as used batteries, end-of-life vehicles and electronic equipment could meet more than half of Europe’s demand by 2050, a new report says.
Recycling is seen as a potential route for Western countries to reduce their dependence on imports of critical minerals vital for manufacturing clean energy technologies – from electric vehicles (EVs) to solar panels and wind turbines.
In a major report published this Wednesday, the Future Availability of Secondary Raw Materials (FutuRaM) project, a research initiative funded by the European Union, found the bloc could reduce its reliance on mineral supply chains dominated by China if it took advantage of its “urban mines”.
Safer supplies, less miningKees Baldé, one of the report’s authors and a senior researcher at the United Nations Institute for Training and Research (UNITAR), said harnessing the critical minerals potential of Europe’s waste streams would be “essential for strengthening supply security, supporting the clean-energy transition, and reducing environmental impacts”.
The report recommends a “structural shift” in how waste is managed in Europe, as countries currently track these raw materials differently and lack a unified regional market. It also recommends increased investment in industrial capacity for recycling, skills-building and awareness campaigns.
China currently has a firm hold on the production and refining of 19 out of 20 critical minerals identified by the International Energy Agency (IEA), including lithium – a key ingredient in EV batteries – and rare earths, which are used in permanent magnets inside clean technologies such as in EV motors.
In the last year, amid trade tensions with the US and Europe, China has enacted export controls on rare earths and the components made with these magnets, as well as lithium batteries and their components. According to the IEA, this “could lead to increased costs for batteries, with potential knock-on effects on the affordability of EVs and storage”.
The country also currently dominates the recycling of these minerals, as it currently accounts for about 80% of the world’s recovery capacity, according to IEA estimates. In 2024, the Asian nation established the China Resources Recycling Group, a state-owned company leading the push for recovering minerals.
Minerals recovery scenariosThe FutuRaM study analysed Europe’s recycling potential under three scenarios by 2050 – one where business continues as usual, one where recovery conditions are improved and one of full circularity where all of the potential secondary materials are recycled.
In 2022, the baseline year for comparison, about 2 million metric tons of critical minerals were contained in waste, a figure that is projected to grow to up to 6 million tons by 2050 in the 27 EU countries plus Switzerland, Norway, the UK and Iceland.
Some key raw materials among them lithium, cobalt and rare earth elements are largely lost during collection or waste processing today, the report says.
Landmark deal to share Chile’s lithium windfall fractures Indigenous communities
From the 2 million tons of critical minerals found in waste generated, about half was recovered as “secondary raw materials”, which means they are collected in some form but without processing. If all these secondary raw materials already collected were functionally recycled, they could supply up to 56% of Europe’s critical minerals demand by 2050, the study estimates.
The interventions needed depend on the type of waste. For example, end-of-life vehicles already have a high collection rate in the EU, and they contain minerals with a high potential for recoverability such as a variety of rare earth elements, the report says. But most of these minerals are not processed. Recycling EVs, in particular, contributes the most.
“Whether Europe realises this potential depends on the choices made now – on legislation, recycling infrastructure, and data collection. Considering these powerful findings, our mindset needs to shift to think of ‘secondary’ sources of CRMs as the new primary source [mining ores],” said Pascal Leroy, director of the Waste Electrical and Electronic Equipment (WEEE) Forum, which reviewed the report.
A 2026 report by the University of Technology Sydney suggested that increased recycling, along with energy efficiency measures, can help meet the minerals needed for the energy transition by 2050 without increasing mining in sensitive ecosystems like the deep sea or biodiversity hotspots.
The IEA estimates that successfully scaling up recycling can lower the need for new mining
activity by 25-40% by 2050 in a scenario that meets national climate pledges.
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After another battery startup bankruptcy, can Europe ever cut reliance on China?
Just one year ago, Lars Christian Bacher said his career embodied the energy transition – moving from CFO of Norway’s state-controlled oil company Equinor to leading one of Europe’s few home-grown battery makers.
Morrow Batteries was on a mission to compete alongside the industry’s dominant Asian, mainly Chinese, battery producers as Europe sought to reduce its reliance on imports, Bacher told a group of foreign journalists on a sunny day in Oslo last May.
But seven months later, Bacher stepped down as CEO, and earlier this month, Morrow Batteries said it had filed for bankruptcy after its financial situation “deteriorated”.
Coming a year after Swedish battery maker Northvolt filed for bankruptcy, industry analysts said Morrow’s descent into financial difficulties would likely deal a fresh blow to investor confidence in European battery manufacturers – potentially keeping Europe dependent on Chinese energy transition technology for longer.
While bigger European battery makers such as ACC, Verkor and PowerCo – linked to car-makers Stellantis, Renault and Volkswagen, respectively – are still in business, Europe needs to reduce its reliance on China, experts say.
“It’s just such a critical technology that you cannot rely on somebody else,” said Julia Poliscanova, batteries lead at the Brussels-based advocacy group Transport & Environment.
Lars Christian Bacher talks to journalists in Oslo on 13 May 2025 (Photo: Joe Lo) State-backed eco-batteriesEstablished in 2020, Morrow Batteries expanded its workforce to more than 200 and has the ability to produce three million batteries a year at its factory in the forest outside the coastal city of Arendal, on Norway’s picturesque southern tip.
Investors in the startup included industrial engineering companies Siemens and ABB, and it received a 550 million krone ($59 million) loan from state development agency Innovation Norway. State-owned energy and investment companies were also among its shareholders.
Morrow has promoted its batteries as particularly sustainable, with solar and hydropower supplying energy to the factory. Its lithium iron phosphate (LFP) batteries do not contain nickel or cobalt, distancing them from the environmental and social problems often linked to critical minerals mining.
“From a sustainability point of view, this is as good as it gets,” Bacher said last May.
He did not immediately respond to a request for comment on the company’s decision to file for bankruptcy proceedings.
Morrow’s LFP battery pack and cells (Photo: Morrow)It aimed to sell these batteries for energy storage, increasingly important as variable solar and wind power comes to dominate European grids, and for off-road and commercial vehicles. Those sectors, rather than electric cars and motorbikes, were being targeted because they were subject to less ferocious competition from Asia, Bacher said.
Industry experts say Morrow started smaller and slower than Northvolt, was selective about its target customers and secured deals with Finnish environmental technology company Proventia Oy and an unnamed German defence company.
But it still ran into financial trouble.
Cash crunch proves costlyIn a statement announcing the bankruptcy, Morrow’s board said it had been trying to secure a new industrial investor and finance, and that “several of the ongoing efforts had reached an advanced stage”.
But these talks “could not be concluded within the constraints imposed by the group’s liquidity situation”, it said, blaming the failure on “the capital requirements inherent in an early industrialisation phase” combined with “increased capital costs, delays in the industrialisation process and a more restrained investment market”.
Northvolt’s bankruptcy may have also damaged Morrow’s attempts to raise money. Last May, Bacher himself acknowledged that it “didn’t help”.
Morrow also cited oversupply in the global battery market, and the resulting downward “price pressure”. The price of LFP batteries fell by nearly half between 2022 and 2025, eating into producers’ profit margins, according to the International Energy Agency.
Morrow’s factory near Arendal pictured in June 2024 (Photo: Morrow)The hefty state investment in Morrow has generated controversy in Norway following its bankruptcy. The leader of the right-wing Progress Party (FrP), Sylvi Listhaug, has said Norwegian taxpayers’ money was wasted on an unviable business.
But others, like Poliscanova and the head of the European Battery Alliance trade association Emma Nehrenheim, told Climate Home News that if Europe wants a battery industry, it will need to back home-grown manufacturers whole-heartedly.
“Valley of death” kills startupsAs European battery manufacturers work to perfect and scale up their technology and processes, they face “a valley of death” with severe competition and little patience from investors or battery customers who “can easily buy them from China”, Poliscanova said.
Startups like Morrow typically raise project financing to get them off the ground, according to Nehrenheim. In the period between that finance ending and reaching profitability, they have to rely on money they set aside as a project reserve.
If they underestimate this reserve, which she said is easy to do when setting up a new factory making a new product, they need more money to bridge the gap. This can come from specialised bridging investors, from customers or from governments.
For Morrow, however, the money did not arrive in time.
Nehrenheim – who was previously Northvolt’s chief environmental officer – said it was a characteristically European failure from investors.
“We’re not good at this,” she said. “We’re not bold enough to compete with Silicon Valley or the Asian (countries), who have been scaling industry now for decades.”
Clean energy sovereignty vs priceSince Northvolt’s bankruptcy filing, the European Union has announced policies to support European battery makers.
It is introducing a €1.5 billion ($1.7 billion) “battery booster“, providing interest-free loans to battery manufacturers. It is considering putting tariffs on imported batteries, subsidising European battery makers and tying electric car incentives to locally made batteries through the Industrial Accelerator Act. None of these policies are yet in place.
With trade disputes rising up the agenda of UN climate talks, Poliscanova conceded that such moves are protectionist, although she said she prefers to call them industrial policy.
“Honestly,” she said, “the EU and the UK are the two large global blocks left that don’t have such industrial protectionist policies. India has it, Brazil has it, China has it, the US has it – we’re literally the last fool standing thinking that [the World Trade Organization] is the way to go.”
Li Shuo, China Climate Hub director at the Asia Society Policy Institute, said that the trade-offs between cheap foreign batteries and more expensive European ones “need to be discussed honestly”.
“How much higher are Europeans willing to pay?” he said. “How much delay in climate deployment is acceptable? Can we really decarbonise and de-risk at the same time? How long can politicians condemn cheap Chinese imports while consumers simultaneously demand affordability?”
While European policymakers want to fight China, the average European just wants a cheap battery, he added.
Closing the cost gapBut once European battery makers scale up, the price gap with Chinese batteries will shrink, Poliscanova said.
While German LFP battery cells are 90% more expensive than those made in China, scale-up could close this gap to a “sovereignty premium” of just 25% by 2030, Transport & Environment estimates.
Nehrenheim acknowledged that most of Europe’s batteries will continue to come from Asia or the United States. “I’m very happy for that because they’re scaling fast and they get great support subsidies in their respective countries to supply us to help us in the [energy] transition,” she said.
But European-headquartered companies must make at least a quarter of the region’s batteries, she said, otherwise if supply is disrupted – whether by geopolitical factors, a pandemic or natural disaster – the industry will have nothing to scale up from.
Nehrenheim said she was almost 100% confident that Morrow’s factory will continue to produce batteries. The company said it expected a court-appointed bankruptcy administrator to assume control over the company’s assets and operations.
Citing investors’ €1.4 billion ($1.62 billion) reprieve of Swedish green steelmaker Stegra in April, Nehrenheim said there were reasons to be hopeful about Morrow’s survival as Europe demands batteries for diverse uses beyond cars – from energy storage to drones and forklift trucks.
“Somebody will pick this up,” she said.
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Nature cannot be ignored by Europe’s next big budget
Adeline Rochet is a programme manager for the Corporate Leaders Group Europe, a business coalition driving the transition to a sustainable, competitive, and resilient economy convened by the University of Cambridge Institute for Sustainability Leadership (CISL).
Europe’s economy depends on the natural world functioning as it should, but the effects of climate change risk undermining increasingly delicate ecosystems. Talks about the European Union’s next long-term budget miss this fact.
Climate-related losses in the EU have already reached €822 billion since 1980, with a quarter of that damage concentrated in just the past four years. Ecosystems are under increasing pressure: more than 80% of protected habitats are in poor condition, soils are degrading and water stress is rising across the continent.
The latest state of the climate report by the EU’s Earth monitoring service Copernicus confirms this worrying state of affairs: 95% of Europe experienced above-average temperatures in 2025.
Economic exposure to nature-related risk is also growing. Businesses, banks and insurers are beginning to reflect this in their risk assessments.
So, will the policymakers in charge of developing the European Union’s next big budget integrate this vision? We are in the midst of finding out.
Every seven years, the EU must negotiate a new budget that will help fund priorities over a seven-year-long period. The current one, which runs out next year, is worth more than a trillion euros.
Talks about the next multiannual financial framework (MFF) for 2028-2034 are now getting serious and the initial outline of this new budget shows it will focus on competitiveness, resilience and prosperity.
But, as the European Parliament adopted its negotiating position for the crunch budget talks and EU member states shape their approach ahead of a Council meeting on May 26, it is clear that the positioning of nature within this framework is strategically underestimated.
Why nature impacts economic growthBack in 2022, France’s nuclear power output was severely affected when heatwaves drove up the temperature of the rivers used to cool atomic reactors, impacting other European countries too. This was particularly poor timing given the energy price crisis triggered earlier that year by Russia’s illegal invasion of Ukraine.
Low river levels caused by drought have also heavily impacted economic activity and growth in countries like Germany, due to the negative effect on inland trade, while degraded fields in the Netherlands combined with heavy rainfall have ruined potato harvests.
These examples show that we cannot detach the health of the European economy from the good functioning of nature.
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Nearly three-quarters of businesses in the eurozone rely directly on ecosystem services such as clean water, fertile soils and pollination. That dependency extends into the financial system, where around 75% of bank lending is exposed to companies dependent on these natural assets.
They entirely underpin supply chains and financial stability across the European economy. If load-bearing ecosystems collapse, businesses not only face disruption in their own operations, but they will also be exposed to failures from suppliers and customers.
This is not just a risk for individual companies, it is a threat for the whole system.
A budget that looks greener than it isAccording to the latest proposals for the next MFF, a single 35% climate and environmental target will replace priorities that used to have distinct funding. As it stands, biodiversity has a 10% target, yet spending has struggled to reach even 8%, already showing how easily it is put to one side in practice.
In the new framework, biodiversity is absorbed into a broader category with no separate tracking or visibility. Dedicated instruments are folded into larger funding envelopes, and nature-based investments are placed in direct and distorted competition with industrial projects.
These are often faster to deploy and easier to measure, making them more attractive.
Headline figures reinforce some appearance of ambition, with €587–635 billion allocated to climate and environmental objectives. But since these are aggregated numbers, they do not show how much will reach ecosystem conservation or restoration.
Less visibility, weaker accountabilityBiodiversity funding also remains structurally fragile, with around 80% concentrated in agriculture policy rather than supported by a diversified investment strategy.
This shift is structural: nature has been relegated from a defined priority to a mere discretionary allocation, and the governance model reinforces this dynamic.
Webinar: From Santa Marta to Bonn – where next for the fossil fuel transition?
Greater reliance on National and Regional Partnership Plans (NRPPs) moves decision-making into national spending choices, where fiscal and domestic political pressure will likely mean long-term ecosystem investments struggle to compete with short-term economic demands.
The current MFF paints a worrying picture of structural triple risk for nature: reduced visibility, increased competition for funding and weaker accountability.
Nature is critical infrastructureIt is a point worth reiterating: investment in nature offers clear economic returns. Healthy ecosystems drive resilience by reducing exposure to climate damage and supporting local economic activity.
Public finance plays a decisive role in enabling these investments at scale, making budget design a question of risk management and capital allocation.
Nature-based solutions already perform essential economic functions. They regulate water systems, restore carbon sinks, provide a buffer against extreme weather events and support agricultural productivity.
These are characteristics of infrastructure. Energy systems, transport networks and digital capacity are treated as strategic investments because they underpin competitiveness.
Natural systems play the exact same role, so why does the current budget plan not reflect this?
The next EU budget will shape investment for the decade ahead. Its structure will determine how risks are managed and where capital flows. Nature cannot be erased in favour of competing short-term priorities.
In the upcoming negotiations, European leaders still have the option to treat nature as a structural objective and a core asset, supporting Europe’s resilience and long-term competitiveness. But they must act now, before it’s too late.
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Chinese EV brands woo Yemen’s wealthy elite as war prompts solar boom
Like many Yemeni farmers, Salem Abdallah first bought solar panels to power a well pump to irrigate his fruit and vegetable crops. Now, he has a new use for the surplus electricity they generate – a Chinese-made electric pickup truck.
“The roads between villages are rough and my farms aren’t all in one place, so the power and height give me a real advantage,” the 60-year-old told Climate Home News as he charged his plug-in hybrid Geely Riddara in Yemen’s capital of Sanaa, where nearly a dozen charging stations have sprung up in the last two years.
Prices for Abdallah’s Riddara model run from $25,000 to $40,000 – out of reach for all but a few in the impoverished country, where more than a decade of civil war has shattered the economy and made fuel supplies unaffordable for many.
The conflict has also taken a heavy toll on the national grid, which only 12% of Yemenis rely on for electricity, according to the World Bank.
Many homes and businesses have instead installed off-grid solar systems to confront frequent blackouts and patchy coverage in rural areas, and this improbable solar boom has caught the attention of Chinese electric vehicle (EV) brands.
Solar boom stirs Chinese interestChina’s BYD, Geely and Jetour have opened dealerships in Yemen in recent years, betting that enthusiastic solar uptake, coupled with high fuel prices and shortages, will lead to rapid growth in the nation’s small and incipient EV market, at least among those able to afford the initial outlay.
At the other end of the scale, electric two-wheelers are also starting to make inroads in Yemen among delivery services and salaried employees.
Mohammed Ali, 25, an accountant at an exchange office in Sanaa, said the $1,050 he spent on a Chinese-made electric motorcycle was “the best decision I ever made”.
“I charge my electric motorcycle at work and it saves me transportation expenses and time,” he said.
But even as the global energy shock caused by the Iran war spurs the shift to electric transport in some lower-income countries, buying an EV still remains an impossible dream for most of Yemen’s 40 million people, said Mustafa Nasr, head of the Yemen-based Centre for Economic Studies and Media.
“Most Yemenis can barely secure their basic needs,” Nasr said.
Shrinking incomes, rising pricesYemen has been gripped by civil war since 2014, plunging it into one of the world’s worst humanitarian crises.
Gross domestic product (GDP) per capita is projected to fall to about $384 this year, according to estimates from the International Monetary Fund – less than a quarter of what it was when the war began.
At the same time, petrol and diesel for transport and to power generators have become increasingly out of reach. A litre of petrol in Sanaa costs the equivalent of $0.94 – close to what many Yemenis earn in a day.
A billboard advertising electric car and truck models over a large avenue in Sanaa, Yemen (Photo: Hashed Mozqer) Charging stations spring upBut for those able to buy them, EVs are proving a revolutionary solution to Yemen’s road transport woes. Sustained fuel price rises and solar adoption could push a gradual widening of the market, particularly if EV and battery prices continue to fall, Nasr said.
For large-scale farmers like Abdallah who already own solar installations generating between 60 and 80 kilowatts, built to run irrigation systems, charging an EV at night is a no-brainer.
EVs started appearing on the streets of Sanaa and the southern port city of Aden in late 2024, when the first charging point was installed by Al-Raebi Company, which holds the concession to build charging infrastructure in Sanaa and several other provinces and also sells electric Farizon trucks and Riddara pickups.
Al-Raebi’s sales manager, engineer Mundhar al-Farran, said the company has sold hundreds of electric vehicles this year to farmers, traders and institutions. Like Abdallah, many of them say EVs’ simpler construction reduces breakdowns, while the immediate torque of electric motors suits Yemen’s mountainous terrain, he said.
Riddara plug-in hybrid vehicles for sale at the Al Raebi car agency in the Jadr neighbourhood in Sanaa, Yemen (Photo: Hashed Mozqer)There are now 11 charging stations in Sanaa, and one each in Aden, Dhamar, Ibb and Hodeidah. On long inter-provincial routes there is one station per corridor, al-Farran said.
The price per kilowatt at a public charging station is 120 Yemeni rials ($0.22). According to economic expert Ali al-Tuwaiti, this translates to a per-kilometre cost of about 18 rials for an EV – two and a half times less than for a fuel-efficient petrol car.
“The absence of charging infrastructure was the biggest obstacle at the start,” al-Tuwaiti said. “Al-Raebi’s initiative was the first turning point in this sector.”
Al-Raebi is also working to bring fuel station operators into the transition, offering to cover half the cost of installing solar-powered charging equipment and financing the rest, al-Farran said.
Solar power backboneSuch efforts seek to leverage the country’s investments in solar generation. Over recent years, the country has imported solar systems totalling more than 1,000 megawatts of capacity, representing an estimated investment of about $250 million, al-Tuwaiti said.
That accounts for almost a quarter of Yemen’s current electricity needs of 4,500 megawatts, he added.
It has also given an unexpected boost to the climate-vulnerable country’s efforts to further shrink its tiny carbon emissions. Al-Tuwaiti estimates that solar generation now displaces the equivalent of 7,800 barrels of oil and more than 1.2 million litres of diesel per day.
Recent estimates show Yemen contributes only around 0.03%-0.06% of global emissions, with most energy-related emissions coming from transport and power generation.
Chinese electric trucks in the Farizon showroom at the Al Raebi car agency in Sanaa, Yemen (Photo: Hashed Mozqer) China’s BYD starts with hybridsYemen’s nascent EV market comes amid faster-than-expected transport electrification in some emerging countries, where Chinese manufacturers are seeking to attract buyers with lower prices in markets seen as having unlocked potential.
China’s EV giant BYD mostly sales hybrid models at its dealership in Aden for now, but it also offers repayment plans for its popular battery electric Seagull car model, which retails for about $13,000.
The dealer also sells several other models that are available as plug-in hybrids, which tend to be popular in places with limited charging infrastructure and erratic power supplies.
One recent buyer, food trader Amin, 50, paid $50,000 for his new BYD model.
“It’s powerful, has four-wheel drive, and a better launch than modern conventional cars,” he told Climate Home News outside his home, adding that the air conditioning runs efficiently even when stationary – a serious consideration in Aden’s sometimes sweltering heat.
“It’s wonderful … it has all that I want in a car,” he said.
This story was published in collaboration with Egab.
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New data shows rich nations likely missed 2025 goal to double adaptation finance
New data on international climate finance for 2023 and 2024 suggests that wealthy countries are highly unlikely to have met their pledge to double funding for adaptation in developing nations to around $40 billion a year by 2025 amid cuts to their overseas aid budgets.
At the COP26 climate summit in Glasgow in 2021, all countries agreed to “urge” developed nations to at least double their funding for adaptation in developing countries from 2019 levels of around $20 billion by 2025. Funding for adaptation has lagged behind money to help reduce emissions and remains the dark spot even as the data showed overall climate finance rose to a record $136.7 billion in 2024.
A United Nations Environment Programme report warned last year that wealthy nations were likely to miss the adaptation finance target and the data released on Thursday by the Organisation for Economic Co-operation and Development (OECD) shows that in 2024 adaptation finance was just under $35 billion.
The OECD, a policy forum for wealthy countries, said the increase between 2022 and 2024 was “modest”, adding that meeting the doubling target would require “strong growth” of close to 20% in government funding for adaptation in 2025.
More cuts likelyThe OECD’s figures do not go up to 2025, but several nations announced cuts to climate finance last year. The most notable was the abandonment of US pledges to international climate funds by the new Trump administration but the UK, France, Germany and other wealthy European countries also pared back their contributions.
Joe Thwaites, international finance director at the Natural Resources Defense Council, said developed countries were “not on track” to meet the adaptation funding goal.
Power Shift Africa director Mohamed Adow said adaptation finance is needed to expand flood defences, drought-resistant crops, early warning systems and resilient health services as the world warms, bringing more extreme weather and rising seas. “When that money fails to arrive, people lose homes, harvests and livelihoods – and in the worst cases, their lives,” he warned.
Imane Saidi, a senior researcher at the North Africa-based Imal Initiative, called the $35 billion in adaptation finance in 2024 “a drop in the ocean”, considering that the United Nations estimates the annual adaptation needs of developing countries at between $215 billion and $387 billion.
If confirmed, a failure to meet the goal is likely to further strain relations between developed and developing countries within the UN climate process. A previous pledge to provide $100 billion a year of total climate finance by 2020 was only met two years late, a failure labelled “dismal” by the UAE’s COP28 President Sultan Al Jaber and many other Global South diplomats.
Missing that goal would also raise doubts about donor governments’ commitment to meeting their new post-2025 adaptation finance goal. At COP30 last year, governments agreed to urge developed countries to triple adaptation finance – without defining the baseline – by 2035.
African and other developing countries have pointed to lack of funding as a key flaw in ongoing attempts to set indicators to measure progress on adapting to climate change.
Speaking to climate ministers from around the world in Copenhagen on Wednesday, Turkish COP31 President Murat Kurum stressed the importance of climate finance. “It is easy to say we support global climate action,” he said, “but promises must be kept.”
He said the COP31 Presidency will use the new Global Implementation Accelerator and recommendations in the Baku-to-Belem roadmap, published last year, to scale up climate finance – and will hold donors accountable for their collective finance goals.
He noted that developed countries should this year submit their first reports showing how they will deliver their “fair share” of the new broader finance goal set at COP29 in 2024, to deliver $300 billion a year in climate finance by 2035. They are due to report on this once every two years.
Broader climate financeThe OECD data shows that the overall amount of climate finance – including funding for emissions cuts – provided by developed countries grew fast in 2023 before declining in 2024. In contrast, the amount of private finance developed countries say they “mobilised” increased in both 2023 and 2024, pushing the top-line figure to a record high.
While the OECD does not say which countries provided what amounts, data from the ODI Global think-tank suggests that the 2024 cuts to bilateral climate finance were spread broadly among wealthy nations.
Thwaites of NRDC welcomed the fact that overall climate finance provided and mobilised by developed countries exceeded $130 billion in both 2023 and 2024. He said that this was “well above earlier projections” and “shows that when rich countries work together, they can over-achieve on climate finance goals”.
But Sehr Raheja, programme officer at the Delhi-based Centre for Science and Environment, said these figures are “modest” when set against the new $300-billion goal.
“While the headline total figure of climate finance remains alright,” she said, “declining bilateral climate spending raises important questions about the predictability of high-quality, concessional public finance, which has consistently been a key demand of the Global South.”
Germany’s State Secretary for the Environment Jochen Flasbarth said the figures “make it clear that public funds alone will not suffice” and “the crucial task now is to mobilize significantly more private investment for climate mitigation and adaptation.”
“Private financiers and international capital markets must live up to their responsibilities and invest more heavily in resilient infrastructure, renewable energies, and sustainable development,” he said.
Raheja also lamented that loans continue to dominate public climate finance and that mobilised private finance is concentrated in middle-income countries and on emissions-reduction measures rather than adaptation projects. “Private capital continues to follow bankability rather than climate vulnerability or need,” she added.
Flasbarth echoed Raheja’s concern about the high proportion of loans which he said “places an additional burden on many of the countries most severely affected”.
Ritu Bharadwaj, climate finance and resilience researcher at the International Institute for Environment and Development, said the figures painted an outdated picture as climate finance has since declined as rich countries shrink their overseas aid budgets and increase spending on defence.
Last month, the OECD published figures showing that international aid – which includes climate finance – fell by nearly a quarter in 2025. The US was responsible for three-quarters of this decline. The OECD projects a further decline in 2026.
With Thursday’s climate finance report, the OECD is “publishing a victory lap for 2023 and 2024 at almost the same moment its own aid statistics show the funding base eroding underneath it,” Bharadwaj said.
This article was updated on 22 May 2026 to include Jochen Flasbarth’s comments
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UN General Assembly backs “climate obligations” set by world’s top court
The UN General Assembly on Wednesday adopted a “historic” resolution calling on countries to comply with their climate obligations, as outlined in a landmark advisory opinion issued last year by the International Court of Justice (ICJ).
Last July, in the opinion first requested by the Pacific island state of Vanuatu, the world’s top court ruled that harming the climate by increasing fossil fuel production may constitute an “international wrongful act”. This could result in affected countries claiming compensation from those responsible, the court said.
To follow up on the ICJ ruling, a dozen nations led by Vanuatu submitted a proposal to the UN’s main deliberative body to recognise the advisory opinion and identify ways of implementing it.
Several large oil-producing nations mounted a late push to weaken the text by introducing last-minute amendments, but the General Assembly rejected those and adopted the resolution with 141 countries in favour at a plenary session in New York.
The resolution urges countries to implement measures to cut carbon emissions, including by tripling renewable energy capacity, “transitioning away from fossil fuels in energy systems”, and phasing out “inefficient” fossil fuel subsidies.
It also requests the UN Secretary-General to draft a report “containing ways to advance compliance with all obligations in relation to the court’s findings” by next year’s UN General Assembly in September 2027.
How countries voted on the UN resolution on the ICJ’s advisory opinion on climate change and human rights Pacific islands celebrate “historic” resolutionThe group of Pacific island nations, which led the diplomatic push for the resolution, as well as Latin American nations and the European Union, celebrated its adoption as a “historic” moment, while some countries noted the persistence of diverging views.
Belize’s UN representative Janine Coye-Felson said in a statement on behalf of the Alliance of Small Island States (AOSIS) that the General Assembly resolution, as well as the ICJ advisory opinion, are important because “climate change is not governed only” by the Paris Agreement, but that “climate justice requires the application of the full breath of international law”.
“When future generations look back at this moment, they will ask whether we rose to meet the defining crisis of our time with the full force of international law. Today, this General Assembly answers: yes,” she told the plenary.
The EU said in a statement during the session that, with the adoption of the resolution, countries are moving beyond “simply recognising” the ICJ’s work and instead “actively upholding the legal integrity” of the multilateral system by seeking to implement the court’s recommendations.
Yet the bloc also warned the process that follows must not “seek to establish new mechanisms or engage in any determination of state responsibility”, referring in particular to the upcoming report by the Secretary-General. Earlier drafts of the resolution contained proposals to establish a register of climate-driven loss and damage and a dedicated compensation mechanism, but these were removed during negotiations on the text.
France’s ambassador to the UN, Jérôme Bonnafont, highlighted the resolution’s provision to reduce dependence on fossil fuels, and said “science clearly establishes their role in climate change”. The recent increase in oil and gas prices, which have soared because of the war in Iran, “underscores the cost vulnerability of this dependence”, he added.
Push-back by oil-producing nationsSome oil-producing countries – among them the US, Saudi Arabia and Russia – were critical of the new resolution, arguing that it creates “quasi-binding” obligations from an advisory opinion that should be non-binding, and rejected the request for a report from the Secretary-General.
“This is a direct duplication of work that is being done at the [UN climate convention],” said Russia’s delegate. “Creating a parallel process will waste resources, will undermine the fragile consensus at the conference of the parties and will lead to the fragmentation of the climate regime.”
In an effort to weaken the resolution, a group of seven oil-producing Middle Eastern states – including Saudi Arabia, Kuwait and Iran – tabled four last-minute amendments proposing to delete certain paragraphs and softening the language on the obligations of states.
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In response, Pacific island nations said these amendments sought to “reopen provisions that were [the] subject of extensive negotiation”, while the EU added that they were “difficult to reconcile with the spirit of cooperation”. They were all rejected in a series of votes.
The US, for its part, described the resolution as “highly problematic” and denied the obligation of preventing climate harm beyond its borders, as well as the assertion that climate change is an “unprecedented civilizational challenge”. The country urged others to vote against the resolution.
India, which abstained, said the text failed to address the need for climate finance flows from developed to developing countries, which is “a serious omission”. The Indian delegate pointed to the absence of the term “climate finance” in the text, which “deserves more attention in a resolution that deals with the obligations of states”.
“Turning point in accountability”, activists sayWWF’s climate chief and former COP president Manuel Pulgar-Vidal said the General Assembly’s vote was a step forward that “raises the pressure on all states to act in line with their obligations”.
Rebecca Brown, CEO of the Center for International Environmental Law (CIEL), said the UN resolution shows that “multilateralism works” and with it, countries “carry the ICJ’s historic ruling forward as a roadmap for climate action and accountability”.
“By acting together, we can prevent further climate harm, in line with science and the law, by speeding up a just and equitable transition away from fossil fuels, protecting climate-vulnerable communities, and advancing climate justice,” she added in a statement.
Vishal Prasad, director of Pacific Islands Students Fighting Climate Change – a group of young people who first made the push for an advisory opinion from the ICJ – said “the world has not only reaffirmed that ruling, but committed to making it a reality”.
“This must be a turning point in accountability for damaging the climate. Communities on the frontlines, like in the Pacific, have been waiting far too long and continue to pay too high a price for the actions of others,” he said. “The journey of this idea from classrooms in the Pacific to The Hague and the United Nations gives us continued hope that when people organise, the world can be moved to act.”
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Electrification emerges as COP31 priority
The Turkish and Australian COP31 host governments and the International Renewable Energy Agency have called for a stronger global push to run vehicles, industry and buildings on electricity rather than fossil fuels, ahead of this year’s COP31 climate talks.
COP31 President Murat Kurum told the Copenhagen Climate Ministerial on Wednesday that governments should be “decarbonising the way we generate electricity, but also expanding electrification into every sphere of life”.
“We must make the technologies of the future accessible at scale – and we must ensure that no one is left behind,” he told the gathering of climate diplomats and ministers from around 40 countries in the Danish capital.
Kurum said that the percentage of final energy consumption which is met by electricity – the key metric of electrification, which is currently around 20% globally – should be increased “as much as we possibly can”.
The head of the International Renewable Energy Agency (IRENA), Francesco La Camera, also addressed the Copenhagen gathering. While his comments to ministers were not public, IRENA released a statement ahead of the talks calling for a goal to increase electricity’s share of final energy consumption to 35% by 2035.
The two officials did not reference the war with Iran and the price hikes in oil and gas as a result of related supply disruptions, but UN and other leaders have used this as an argument in favour of transitioning away from planet-heating fossil fuels towards clean, domestically produced renewables.
35 by 35 goal“The world must adapt to a new energy reality,” La Camera said in the IRENA statement. “Beyond the goals of tripling renewables and doubling energy efficiency [by 2030] lies the wider challenge of transforming entire energy systems and reducing fossil fuel use across supply and demand. Electrification and fossil fuel phase-out are inseparable and must advance together.”
He said electrification, which can be achieved through technologies like electric heat pumps, vehicles and cookers, will reduce greenhouse gas emissions, enhance energy security and bolster economic competitiveness.
A new “transitioning away from fossil fuels” roadmap released by IRENA says this 35% by 2035 electrification goal is vital if the world is to “remain” on a pathway to limit global warming to 1.5C. Electrification should reach at least 50% by 2050, it adds.
To enable this goal to be met, the amount of money invested in power grids each year should double from $0.5 trillion in 2025 to around $1 trillion each year until 2035. Significant investment in electricity storage and demand flexibility is also needed, the roadmap says.
Clémence Dubois, campaigns manager for green group 350.org, welcomed Kurum’s remarks but added that electrification and energy justice should be funded through large developed countries taxing the windfall profits of fossil fuel companies.
Also on Wednesday, Australian climate minister and COP31 President of Negotiations Chris Bowen met with the EU’s energy commissioner Dan Jørgensen.
An official summary of the meeting said they discussed electrification “as one of the most powerful policies available to reduce exposure to volatile fossil fuel markets and improve energy security”.
Collective goal or coalition?The statement says they “agreed to work together on a new global initiative on electrification”. It is not yet clear whether the Turkish government, or the Australian government which is tasked with leading the COP31 negotiations, will attempt to get all countries to agree to an electrification goal at November’s climate summit in Antalya.
If so, such a goal could be collectively endorsed by all nations in a COP decision, as with the COP28 targets to triple renewables capacity and double the rate of growth in energy efficiency, both by 2030. Where there is narrower support, other goals have been voluntarily launched at COPs, backed by coalitions of countries, including pledges to boost nuclear energy, biofuels and grid investment.
A source with knowledge of Türkiye’s priorities confirmed that electrification is important to the COP31 host, alongside energy storage, energy security, clean cooking and resilient and clean energy systems.
This article was updated to include information about Chris Bowen’s meeting with Dan Jørgensen
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Electric car sales race ahead in SE Asia and Latin America amid oil supply crisis
Nearly 30% of cars sold this year are set to be electric as the war in Iran has sent petrol and diesel prices soaring and drivers in many parts of the world look to electric vehicles as a cheaper alternative.
The analysis, released on Wednesday by the International Energy Agency (IEA), shows that in March, after Iran effectively closed the Strait of Hormuz following US and Israeli military strikes, around 30 countries saw record-breaking monthly sales of battery electric cars and plug-in hybrids.
In the first three months of the year, sales grew by 80% in Asian countries outside of China and by 75% in Latin America – driven by adoption in Brazil and Mexico – compared to the same period last year. In Europe, sales were up close to 30% year-on-year.
Iran war creates upside potential for EV salesGlobally, electric car sales are expected to grow to 23 million this year, accounting for 28% of total car sales, despite falling in China and the US in the first quarter of the year.
In Europe, one in three cars sold this year is projected to be electric. In China, early data for April shows that monthly sales grew to more than 60% of total car sales. Outside China, sales are projected to rise by more than 50% in Asian countries and 45% in Latin America this year.
Araceli Fernandez, the head of the IEA’s technology innovation unit, said the energy crisis caused by the Middle East war has spotlighted the benefits of driving an electric car and created “an upside potential” for the agency’s EV forecast this year. But, she added, it will take time for this to be reflected in the market, partly because of the time lag between ordering a car and it being ready to drive.
Consumers might also be weary of the impact of the war on the economy and wait for government support and policy incentives to make the switch to electric. As a result, the extent to which the growth in sales recorded since the start of the year can be attributed to the energy crisis is hard to estimate, IEA analysts said.
Attractive response to the energy crisisThe road transport sector is the largest consumer of oil, accounting for close to half of global demand.
The IEA has described the blockade of the Strait of Hormuz, through which around a fifth of oil and gas trade passes, as the “largest supply disruption in the history of the global oil market”. Earlier this week, it warned that global oil inventories were depleting at record pace.
How governments respond to soaring oil prices could shape the global car market for years to come, according to the Paris-based agency, which was set up to respond to the oil crisis of the 1970s.
Unlike in the 1970s, electric vehicles are now an alternative to oil dependence for transport. In 2025, a quarter of all new cars sold were electric. That year, the global EV fleet avoided the consumption of around 1.7 million barrels of oil per day, according to the IEA’s analysis.
“Many governments in oil-importing countries in particular will potentially turn to identify ways for scaling up electric vehicle deployment,” said Timur Gül, the IEA’s chief energy technology officer.
Southeast Asia’s ‘spectacular growth’Countries in Southeast Asia, including Vietnam, the largest EV market in the region, have already announced plans to expand or extend EV tax incentives in response to the energy crisis.
“It’s possible that other countries will follow,” said Gül, adding that supportive policies being implemented this year could lead to “important upside potential for EV sales”.
The region, which heavily depends on fuel imports from the Middle East, has been particularly affected by the crisis, with prices at the pump spiking.
In Nepal, where nearly three-quarters of new cars sold are electric, the EV roll-out has helped cushion the impact of the oil shock. In Bangladesh, where significant barriers to EV deployment remain, dealers of electric cars, scooters and three-wheelers said they have seen a rise in sales and customer enquiries in recent months.
Gül said electric car sales across Southeast Asia have seen “spectacular growth” over the last two to three years, reaching nearly 20% of car sales across the region last year, led mainly by Vietnam, Thailand and Indonesia.
More than half of the cars sold in the region were made by Chinese carmakers but around a third were manufactured by Vietnamese company VinFast, whose small affordable models have enabled mass adoption in the country. Nearly 40% of new car sales in Vietnam were electric in 2025 – above levels seen in most European countries.
China’s hegemonyTechnological advances and cheaper prices have continued to drive EV deployment in China, the world’s largest oil importer.
In 2025, seven out of 10 electric cars sold in the country were cheaper to buy than their petrol and diesel engine counterparts in Europe. The cost of owning an electric truck is now competitive with owning a diesel one and last year, one in four trucks sold in China were electric – a market that doubled twice in just two years.
Cheaper EVs saw car exports from China double in 2025, mostly targeting Europe and Asia. Chinese automakers manufactured 60% of electric cars sold around the world last year and imports of Chinese cars account for more than half of sales outside Europe and the US.
“We are seeing increasingly intense competition domestically in China, which is squeezing the margins for electric car manufacturers and is making them increasingly look for export opportunities overseas,” said Fernandez.
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