The UK government has reclassified nearly £500m of aid for war-torn and impoverished countries as “climate finance”, in a bid to meet its international commitments under the Paris Agreement.
This follows reports that the UK’s pledge to spend £11.6bn on climate aid between 2021-22 and 2025-26 is slipping out of reach, due to government cuts.
A freedom-of-information (FOI) request by Carbon Brief reveals how, after the reclassification, money for humanitarian work in nations including Afghanistan, Yemen and Somalia is now being double-counted as climate finance to help the UK hit its goal.
The projects being double-counted include work to provide food and basic necessities that have no explicit link to climate action, Carbon Brief’s analysis reveals. Some of their internal reports even state clearly that they are not climate-finance projects.
This is part of a wider revision of climate-finance accounting, introduced by the government in 2023 to ensure the UK achieves its £11.6bn target.
By redefining existing funds pegged for development banks, investment in foreign businesses and humanitarian aid as “climate finance”, the government expects to add £1.72bn to its total.
Experts tell Carbon Brief it is “problematic” and “unjust” to relabel existing funds as climate finance rather than providing new money. One says the UK could meet its target, at least in part, by “double counting development and climate finance”.
The chair of the Least Developed Countries (LDC) group at UN climate talks says the UK’s actions are a “clear deviation from the path to climate justice”.
‘Moving the goalposts’
The UK government has committed to spending £11.6bn on international climate finance (ICF) between 2021-22 and 2025-26. This is the nation’s contribution to climate action in developing countries, which it is obliged to provide under the Paris Agreement.
Developed countries, such as the UK, have committed to sending “new and additional” climate finance to developing countries. This is generally interpreted as spending extra money on top of existing foreign aid.
The UK government itself has described the £11.6bn goal as “dedicated ring-fenced funding that is distinguishable from non-climate [aid]”.
However, reports began to emerge in 2023 that the government was not on track to meet its target.
Experts attributed this to the government cutting its overall foreign aid budget. In November 2020, the government suspended a target to give 0.7% of national income as overseas aid – reducing it to 0.5% as a “temporary measure”.
The government is also spending more of the remaining funds on supporting refugees within the UK. The latest figures show that in 2023, the UK spent more of its aid budget on supporting asylum seekers and refugees in the country than on overseas projects.
In order to remain on track for the £11.6bn goal, development minister Andrew Mitchell announced in October 2023 that the government was changing the way it calculated ICF spending.
This immediately sparked concerns that the government was inflating its climate-finance figures without providing any new aid money for developing countries. Mitchell provided limited details of how the government was getting its target back on track.
More information came in a report released in February by the Independent Commission for Aid Impact (ICAI). It concluded that, by “moving the goalposts”, the government had reclassified £1.72bn of spending as climate finance between 2021-22 and 2025-26.
This figure includes four tranches of funding that had not previously been considered ICF:
- £746m from assuming that a share of the “core” funding the UK gives to the World Bank and other multilateral development banks (MDBs) will be assigned to climate-related projects.
- £497m from automatically labelling 30% of the humanitarian aid spent in the 10% of countries that are most vulnerable to climate change as ICF.
- An estimated £266m from defining more payments into British International Investment (BII), the UK’s overseas development finance institution, as ICF.
- £215m from civil servants “scrubbing” the aid portfolio – namely, going back over existing projects and adding any climate-relevant funding they had previously missed.
The figures cited by ICAI are based on unpublished government analysis, which Carbon Brief has now obtained via FOI.
The analysis includes the annual contributions each of these sources are expected to provide over the period from 2021-22 to 2025-26, which can be seen in the coloured sections of the chart below.
As the chart indicates, even with the methodology changes, the £11.6bn target is still “backloaded”, with a significant uptick in ICF spending required beyond 2023-24 to meet it.
ICAI notes that, since the government cut its aid spending from the UN-backed benchmark of 0.7% to 0.5% of gross national income (GNI), “serious concerns remain over whether the heavily backloaded spending plan can be delivered”.
Core funding
The largest tranche of redefined ICF – some £740m – comes from the government starting to assume that a share of its “core” MDB funding counts as climate finance.
This is money that the UK government already hands to these organisations to distribute according to their own priorities, primarily through loans. None of this money has previously been counted by the UK government as ICF, even though some went towards climate action.
MDBs, including the World Bank, the African Development Bank (AfDB) and others have placed a growing emphasis on climate change in recent years. The World Bank, for example, has a target of spending 35% of its finance on climate-related projects.
Following the reclassification, the UK government will simply assume that 35% of the money it gives to the World Bank – some £495m of £1.4bn total due in 2025/26 – counts as ICF.
It will use a similar approach for its funding of other MDBs, with these changes adding a total of £740m to the amount of the UK’s aid spending that is classified as ICF.
This move will not result in the UK providing any new funds for climate action, as it was already planning on distributing this money. In fact, the government has cut its spending on MDBs in recent years, due to the overall cut in the UK’s foreign aid budget.
Humanitarian aid
The second-largest tranche of newly reclassified climate finance is from projects in climate-vulnerable countries, an additional £497m of which is being counted as ICF.
The government dataset obtained by Carbon Brief via FOI reveals the 28 humanitarian projects and five more general, country-specific funds that will contribute to this additional £497m.
The projects are based in some of the poorest and most war-torn countries in the world – Afghanistan, the Democratic Republic of the Congo (DRC), Somalia, Sudan, Uganda, Yemen and Zimbabwe.
They largely focus on essential provisions, such as food and basic infrastructure.
Prior to the recent changes, these programmes would have contributed just £47.5m to ICF, according to the government data released to Carbon Brief.
By automatically counting 30% of their spend as ICF, this figure has now multiplied more than 10 times. The chart below shows, in red, these additional ICF funds.
For the 23 of the 28 projects with documentation available online, Carbon Brief assessed the relevant sections of their “business case and summary” documents for evidence that they were related to climate action.
Many of the project documents reference climate change and say they will provide climate benefits. For example, all four projects in Somalia, a nation that has faced devastating drought and floods in recent years, mention the importance of climate resilience in their work.
However, some of the projects explicitly state that they are not intended to provide climate-finance.
The summary document for the Assurance and Learning Programme (ALP) in Afghanistan, published in 2021, states: “The programme will not be eligible for ICF nor will it monitor ICF funded programmes.”
Similarly, the Congo Humanitarian, Resilience and Protection (CHRESP) Programme summary document, also published in 2021, notes “we do not anticipate that any of our programming under this programme will be eligible as ICF”.
Another project, titled Yemen: Access, Logistics, Liaison, and Accountability, will provide “few opportunities” to address climate change, according to the summary document. A further four project documents do not contain any reference to climate change.
Despite this, following the government’s reclassification, these seven projects will collectively contribute £166.9m of UK climate finance in the coming years.
Euan Ritchie, a senior development finance policy advisor at the thinktank Development Initiatives, says blanket approaches to assigning climate finance are “problematic”. He tells Carbon Brief:
“Just because humanitarian aid is going to a country that is vulnerable to climate change doesn’t mean it addresses that vulnerability. And these projects have already been screened for their climate focus.”
He points to one of the projects, the Somalia Humanitarian and Resilience Programme, as an example. Ritchie says, based on International Aid Transparency Initiative data, that officials had already decided around 12% of this programme’s spending was ICF, and asks:
“So what rationale is there for bumping it up to 30%? Were officials wrong the first time?”
Fatuma Hussein, a programme manager at the thinktank Power Shift Africa, tells Carbon Brief such an approach is “unfair and unjust” as it “risks conflating” the “distinct needs” of climate aid and other humanitarian objectives.
In its guidance for categorising what counts as climate finance, the Organisation for Economic Co-operation and Development’s Development Assistance Committee recommends scoring many humanitarian projects “zero”, indicating programmes that “generally do not qualify” as climate aid.
More private investment
The third-largest tranche of reclassified development aid relates to state-backed private sector investment under British International Investment (BII).
The UK government will also now count more of its payments into BII as climate finance, amounting to around an extra £266m by 2025-26. Unlike aid spending, these are investments in the private sector and are expected to yield a financial return for the UK.
Previously, the government counted a fixed 30% of BII spending as climate finance. It now intends to include a higher percentage to reflect a growing focus on climate investments.
The new approach to BII investments assesses the share of each project that should count towards UK climate finance case-by-case, rather than using a blanket 30% share.
It will record 100% of investments in a programme covering the Philippines, Indonesia and other parts of south-east Asia as ICF, as part of the government’s “Indo-Pacific tilt”. Investments in other regions also contribute a higher share of ICF – rising as high as 46% in 2022-23.
The chart below shows the extra BII investment money (red) that now counts as ICF.
The figure above shows that the government expects private sector investment via BII to play an increasingly large role in its climate finance in the future.
Many observers have expressed concerns about the government leaning more on private investment through BII to boost its ICF spending.
A report last year by the parliamentary international development committee criticised BII’s investment in, among other things, fossil fuels and “high-net-worth individuals”.
BII prioritises loans and projects in middle-income nations where there is money to be made, rather than the nations that are most in need of climate finance.
ICAI highlighted this in its review of the UK’s climate finance commitments earlier this year, stating that private investment “is not always the most appropriate, realistic or preferred form of climate finance in the poorest and most fragile contexts”.
Not new, not additional
Developing countries will require trillions of dollars of investment in the coming years to meet their climate goals.
To help achieve this, developed countries, such as the UK, are expected to provide finance under the UN climate system that is “new and additional”. Discussions around a new climate finance goal will take centre stage this year at the COP29 climate summit in Baku.
Experts tell Carbon Brief that the UK government’s changes to its ICF undermine the notion that it is providing new, “ring-fenced” funding. Regarding the “arbitrary” labelling of humanitarian funds as ICF, Ritchie says:
“If the UK is counting a fixed share of projects as ICF it can no longer claim that ICF is distinguishable from non-climate [aid].”
Gideon Rabinowitz, director of policy and advocacy at the international development network Bond, tells Carbon Brief:
“The change of definition means they will be able to reach the target by spending less money than they would have done otherwise through double counting development and climate finance.”
Development NGOs say the best way for the UK to scale up its climate finance would be to return its foreign aid budget to 0.7% of GNI. However, with an election looming, neither the ruling Conservatives nor their Labour challengers have indicated a willingness to do this.
There will be considerable pressure on developed countries in the coming months to commit to providing plentiful, high-quality climate finance in the run up to COP29.
Evans Njewa, the chair of the LDC group, to which nearly all of the UK’s humanitarian aid ICF recipients belong, tells Carbon Brief:
“Reclassifying existing donor aid as climate finance is a clear deviation from the path to climate justice, and closing the finance gap cannot be achieved this way.”
Climate-finance reporting has been described as a “wild west”, with countries announcing figures based on vastly different definitions. This has led to nations counting money for coal, hotels and films in their totals, as there is no binding international standard to guide them.
The UK government noted last year that its changes are in line with other countries’ methods. But experts point out that the UK was previously viewed as setting a high standard for other countries to reach.
In contrast, the new approach “risks breeding cynicism and mistrust because you are going to find programmes that have very little to do with climate change, but end up being reported in the pot as climate finance”, Rabinowitz says.
Hussein agrees, telling Carbon Brief:
“This not only highlights the disparity between western countries’ rhetoric on climate finance and their actual financial commitments to developing countries but also risks undermining trust that underpins global climate action.”
She argues that nations should agree on common definitions and accounting methodologies for climate finance to ensure that governments cannot backslide as the UK has.
Responding to Carbon Brief’s questions about the government’s methodology changes, a spokesperson from the Foreign, Commonwealth and Development Office (FCDO) said:
“Since 2011, UK funding has helped more than 100 million people cope with the effects of climate change, given 70 million people access to clean energy and reduced or avoided over 86m tonnes of greenhouse gas emissions.
“The UK remains on track to meet the £11.6bn international climate finance commitment.”
The post Revealed: UK ‘double counting’ £500m of aid for war-torn countries as climate finance appeared first on Carbon Brief.
Revealed: UK ‘double counting’ £500m of aid for war-torn countries as climate finance
Climate Change
“Next year is too late for regulations”: Beetaloo Energy’s 2GW gas-powered AI data centre a “disaster proposal” destined to cause climate chaos
SYDNEY, Wednesday 22 July 2026 — Beetaloo Energy has secured land from the NT Government for a massive $40 billion “hyperscale” AI data centre near Darwin, which would be powered by 2 gigawatts (GW) of gas power fracked directly from the Beetaloo basin, prompting calls from Greenpeace for urgent federal legislation.
The proposal marks a dangerous escalation in the AI data centre industry’s expansion, which threatens to entrench fossil fuel infrastructure for decades and put immense pressure on the region’s fragile water resources — while continuing to be unregulated.
Joe Rafalowicz, Head of Climate and Energy at Greenpeace Australia Pacific, said: “This disaster proposal for a 2GW gas-powered AI data centre in the NT is a shocking example of the unchecked expansion of hyperscale data centres in Australia. It is also, critically, more evidence for the urgent need for a moratorium on all new data centres until strong, binding regulations are put in place to protect our communities and climate.
“This proposal mirrors the frenzied, unchecked expansion currently wreaking havoc on communities in the US. We are seeing cowboy data centre operators treat Australia like a playground, steam-rolling ahead with projects that would lock down precious water resources and spike emissions, despite the overwhelming community opposition.
“Every day, more councils, communities and environmental groups are joining Greenpeace’s call for a moratorium on data centres, yet as of today there is still no system of safeguards or rules in place to regulate these companies.
“While Beetaloo Energy and the NT Government prepare to bulldoze ahead with this climate and water disaster, the Prime Minister is asleep at the wheel, promising to legislate a vague set of standards next year.
“Next year is too late, and anything less than mandating data centres cover their own energy demand, and then some, with new renewable energy is not enough.”
-ENDS-
Media contact
Lucy Keller on 0491 135 308 or lucy.keller@greenpeace.org
Reports of human rights and environmental abuses linked to Chinese companies’ overseas investments in the mining and refining of minerals needed for the clean energy transition are on the rise, research by a monitoring group has found.
The number of recorded allegations of harm at projects tied to Chinese firms have increased every year since 2021, rising to 148 in 2025, according to the Business and Human Rights Centre (BHRC). On Wednesday it released new data showing that a total of 434 allegations of abuse were made against Chinese-backed projects over the five-year period in projects across the world.
The world’s top cleantech manufacturer, China is also the leading financier of critical minerals projects worldwide. The country has committed more than $120 billion in foreign direct investment into mineral mining and processing since 2023, Australian think-tank Climate Energy Finance recently found.
“China plays a central role in global transition mineral supply chains, and as such has a unique opportunity to raise the bar on human rights and community engagement at every stage of mining,” said Michael Clements, BHRC’s executive director.
“While there have been encouraging developments, from stronger regulations to more company engagement, there remains a gap between human rights commitment and action,” he said.
The report comes as communities affected by Chinese-backed mineral projects have filed the first two cases to a Beijing-based mediation mechanism intended to bring willing Chinese companies to the discussion table with affected communities.
Allegations of harms on the rise
BHRC’s latest analysis – including data for the period 2023-2025 – covered mining, smelting and refining projects for 11 minerals considered key to manufacturing clean energy technologies such as batteries, EVs and solar panels needed to move away from climate-heating fossil fuels.
The highest number of abuses was recorded in Indonesia, the world’s largest producer of nickel, which is used to make EV batteries. After the Indonesian government banned exports of raw nickel, Chinese firms invested billions of dollars to develop a large-scale nickel smelting and processing industry in the Southeast Asian country, largely powered by coal.
Other countries with a high number of recorded harms include the Democratic Republic of Congo, where Chinese firms dominate cobalt and copper production; Myanmar, where unregulated rare earths mining has caused widespread environmental destruction; Serbia, where Chinese-backed mining of some of Europe’s most significant copper and gold deposits is swallowing land and homes, and Zimbabwe, where Chinese investments have turned the nation into Africa’s top lithium producer.
Growing risks for people and nature
Allegations tracked by BHRC included negative impacts on local livelihoods, health and land rights, workers’ health and safety and work-related deaths, as well as water pollution and environmental contamination. In addition, 18 people were attacked for raising concerns about Chinese transition mineral projects between 2023 and 2025.
The report shows that 10 Chinese companies, including Zijin Mining, Tsingshan Group and Zhejiang Huayou Cobalt, accounted for nearly two-thirds of all allegations recorded in the last five years. It found that some Chinese companies “still appear to turn a blind eye to these issues” but noted that several others have been more responsive to allegations of abuse. However, even among companies with human rights policies, implementation remains a challenge, BHRC warned.
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Zijin Mining and Zhejiang Huayou Cobalt repeatedly responded to the allegations of harm by saying they take environmental and social risks seriously and adhere to international standards. Tsingshan Group never responded to BHRC’s requests for comment.
Platform for dialogue between communities and Chinese firms
At the same time, Chinese authorities have made “significant progress” on introducing a more specific framework for managing environmental and social risks in overseas investment, BHRC said.
This includes global consultation on a draft Sustainable Mining Code, adherence to UN guiding principles on business and human rights, and greater emphasis on oversight of companies operating overseas.
The China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC) set up a mediation and consultation mechanism intended to provide a platform for dialogue between affected communities or civil society groups that have raised concerns and Chinese companies.
More than three years since its launch, the mechanism has now received its first two complaints from local communities and many more are considering filing a case, Margaux Day, executive director at the nonprofit Accountability Counsel, told an event hosted by Climate Home News last month.
“This is incredibly exciting in that it fills a governance and accountability gap where often communities who are seeking to protect their rights and the environment can’t reach someone who will respond to them,” she told the panel discussion at London Climate Action Week.
Climate Home News understands that the complaints were filed by communities in Latin America and Southeast Asia over labour rights and resettlement issues. No information about the cases has yet been made public. The mechanism’s secretariat did not respond to Climate Home News’ questions.
The mechanism was set up after the Chinese regulator for banks and insurers called on investor-level institutions to establish complaints bodies to hear from communities outside of China. But whether the new initiative will prove effective in tackling grievances remains an open question.
“Real potential” for better mining practices
Participation in the mechanism is voluntary for Chinese firms and it doesn’t have a fact-finding function, nor can it impose provisions for compensation or compliance with human rights standards.
But Day told Climate Home News that, if successful, it could bring companies to negotiate an outcome that is better for people and the planet and leads to more sustainable mining practice.
Chen Yu, an independent China advisor for campaign group Global Witness, agreed that the mechanism holds “real potential”.
“There exists nothing else at a similar level to promote dialogue between communities and Chinese mining companies in particular,” she said.
For companies, the mechanism opens “a channel for problem-solving and dialogue with communities”, she added, as “Chinese companies often remain cautious of approaching affected communities directly, afraid of making the problem bigger”.
However, Chen said the mechanism remains at an early stage of development, faces resourcing challenges and is not yet sufficiently understood by communities in mining areas or Chinese firms.
To help it address some of these challenges, the secretariat is currently seeking technical support from a range of organisations, including civil society groups. But, Chen said, “it will take time for the mechanism to show its value”.
The post Allegations of harms at China-backed transition minerals projects rise appeared first on Climate Home News.
Allegations of harms at China-backed transition minerals projects rise
Andreas Sieber is head of political strategy at 350.0g. Cat Abreu is director of the International Climate Politics Hub.
From the US abduction of Venezuela’s president at the start of this year to the Iran war which rumbles on, disruption is the new normal for global geopolitics, more often than not linked to conflict over supplies of oil and gas.
Events so far in 2026 – driven largely by the desire of the Trump administration to grab control of fossil fuels around the world – show that the climate community’s approach to energy diplomacy will have to evolve if we are to operate effectively and push for climate action in such a volatile landscape.
Today’s climate and energy governance must be able to cope with trade wars, genocide, fascism, spiralling inequality and challenges to multilateralism. The increasingly dominant paradigms of economic competitiveness, energy security and green industrialisation can help drive the transition but they also challenge our collective mission to deliver an equitable green shift.
US-China rivalry dominates
Longer-term geopolitical trends that are seeing power move from West to East and North to South have fuelled a US–China “superpower rivalry”, which is pulling the global economy apart and reining in trade.
A key question will be how the fracture “lines” are drawn: by the US and China, or also by other countries or blocs? Many governments will try to remain “in the middle” between the two giants to capture economic gains from both sides. Yet despite the language of “strategic autonomy”, Washington and Beijing may be in a position to force choices via market access, export controls and sanctions.
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At first glance, this may not seem particularly relevant for climate and energy politics. But Huawei’s exclusion from 5G operations across the political West and India following the so-called Clean Network Campaign by the US government serves as a warning of what could happen to climate green tech.
And the recent debate to cut out Chinese inverters from European markets follows the same pattern – US security forces perceive a risk and start encouraging their allies to drop Chinese technology.
The new drivers: competition and security
Despite this fracturing geopolitical and economic context, energy transition is still happening. To ensure it is effective and equitable, we need to understand what is driving it and how to adapt climate politics so that it better responds to these drivers.
Put simply, China is supplying the world with low-cost renewables (roughly 60% of critical wind and 80% of solar components), batteries, EVs and other key elements. Other countries now also want their piece of the green tech pie and are forming industrial policies to get it.
It is this new competitiveness-driven logic that will shape the quest for decarbonisation, which has shifted from cooperating around the cost of tackling climate change to rivalry for the benefits of climate action.
Over 90% of new renewables projects are now cheaper than fossil alternatives. Gas-fired power is 3–4 times more expensive than solar and wind. In 2015, most decarbonisation policies were “traditional” emissions-cutting strategies like carbon pricing or net zero dates, whereas green industrial policies now underpin the majority.
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Meanwhile, security has become a central driver of energy politics. We are living through the second major fossil fuel crisis in just four years. Elevated oil and gas prices will impose up to $1 trillion in additional costs on the global economy by the end of the year if disruption continues in the Strait of Hormuz. Fossil fuel supply chains have exposed countries to conflict, coercion and brutal price shocks.
Fossil fuel volatility destabilises whole economies – higher fuel costs drive up food prices, increase political instability, and push millions into poverty and hunger. This incentivises governments to shield themselves from global shocks, especially in countries that are net fossil fuel importers and home to roughly three-quarters of the world’s population.
Yet security fears can cut both ways. The same instability that makes fossil fuel dependence untenable is also sharpening concern over China’s dominance of critical clean technologies and supply chains.
Equity, cooperation and the opportunity for change
Developing countries benefit from the rapid uptake of renewables enabled by low-cost Chinese technologies. But significant fiscal space and public investment is needed for the electricity grids and infrastructure required to fully unleash the energy transition, as well as for green industrialisation to diversify revenue streams.
Despite this, industrial-scale domestic production and ownership often remain out of reach for too many countries that lack the fiscal space to allow green supply chains to flourish and compete with their traditional industrial base. But more just and diversified green tech supply chains could be achieved with concomitant support.
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For the first time in decades, the international order is being substantially reshaped. If within this context, decarbonisation is increasingly driven by green industrial policy, energy security and competitiveness, the climate policy community must better anticipate where these debates are moving. We must speak the same language, and enter the forums where decisions are made, including security, trade and bilateral or trilateral spaces.
We should build on an enlightened self interest recognising that cooperation remains essential and beneficial. This includes using the UN climate process differently: less as an ever-expanding negotiation machine, and more as a space for norm-setting, political alignment and deal-making. In an age of fragmentation, effective cooperation must not only be framed as necessary but thought of as a strategically compelling source of resilience and shared advantage.
The post Energy transition policymaking must evolve to fit an age of rupture appeared first on Climate Home News.
Energy transition policymaking must evolve to fit an age of rupture
“Next year is too late for regulations”: Beetaloo Energy’s 2GW gas-powered AI data centre a “disaster proposal” destined to cause climate chaos
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