Located in the heart of the Amazon, it has been billed as Brazil’s first sustainable aviation fuel (SAF) project, but the palm oil producer behind a planned biorefinery in Manaus is now grappling with a financial crisis triggered by concern over possible rights abuses.
Reporting in the region by Brazilian news outlet InfoAmazonia in partnership with Climate Home News, has also found that the company – São Paulo-based Brasil BioFuels (Grupo BBF) – is growing oil palm on three areas subject to sanctions by Brazil’s Ibama environmental agency over illegal deforestation.
The embargoed plots lie in São João da Baliza, a sparsely populated district strung along the highway where former grazing pasture and biodiversity-rich scrubland have steadily been replaced by neat rows of oil palms. Signs hanging on fences say the crop will be used to make SAF.
Aviation’s Green Dream: Read our investigative series on Sustainable Aviation Fuel
While many locals living in the district’s towns welcome the jobs and economic boost provided by BBF’s palm plantations, Indigenous people and environmentalists see them as a threat to nature, traditional ways of life and the rainforest.
“If these areas are completely replaced by crops for biofuel production, we will lose unique species, many of which are still little known to science,” said Lucas Ferrante, a researcher from the zoology postgraduate programme at the Federal University of Amazonas (UFAM).
BBF, which announced its plans for the Manaus SAF project back in 2022, makes much of the fact that – in line with Brazil’s strict environmental laws – it only grows oil palm on land that was degraded before 2007, rather than freshly deforested land.
Stressing the company’s green credentials in an interview with Brazilian newspaper Valor Econômico last year, CEO Milton Steagall said the firm – which grows palm on about 75,000 hectares (185,000 acres) in the northern Amazon states of Pará and Roraima – “only cultivates the plant in the areas permitted by law”.
“Our sustainable palm cultivation recovers areas already degraded by deforestation and contributes to keeping the Amazon rainforest standing,” he said.
Illegally cleared land
BBF, which says it is the biggest palm oil producer in Brazil, makes palm-based biodiesel that fuels a network of power stations in the Amazon region, supplying some 140,000 customers.
The plan to produce SAF from the same feedstock would be its first foray into a new market that is set to take off in the coming years, as more countries – including Brazil – require their aviation sectors to start using greener fuel.
But InfoAmazonia’s investigation suggests that sourcing rising amounts of SAF from crops like palm that are grown in tropical forest countries – from Brazil to Malaysia – poses a threat to rainforests that are vital stores of climate-heating carbon.
Is the world’s big idea for greener air travel a flight of fancy?
InfoAmazonia identified the illegally deforested areas being used by BBF in southern parts of Roraima by analysing data from the Earth Index platform, which draws on artificial intelligence (AI) and satellite images to determine land use.
The data was then cross-referenced with maps of embargoed areas produced by the government’s Ibama agency. In April this year, the InfoAmazonia team visited the sites and confirmed the existence of the palm crops.
Their analysis found that a total area of 164 hectares (405 acres) close to São João da Baliza had been embargoed by Ibama, meaning the land cannot be used for agriculture.
While the area – roughly equivalent to 250 soccer pitches – represents a small fraction of BBF’s total plantations, the findings highlight the deforestation risks of large-scale oil palm cultivation in the Amazon.
None of the plots are officially registered in BBF’s name – something that is relatively common in Brazil’s land registry – but when InfoAmazonia visited them, the company’s logo could be seen displayed clearly on the fences of each.
Pictures taken with a drone of one of the areas show a field that appears to have been recently planted with palms cutting into a forested area that stretches toward the horizon. A few tall trees dot the newly planted area.
Asked about InfoAmazonia’s findings, BBF said it had never been informed about the issuance of environmental penalties on any of its land in Roraima.
“(The company) has (completed) the environmental licensing processes with the State Foundation for the Environment and Water Resources (FEMARH) in all of its areas, which are necessary for the sustainable cultivation of oil palm in the state of Roraima,” a BBF spokesperson told InfoAmazonia.
Pasture and bananas make way for palm
Palm oil production in Roraima as a whole rose nearly 40 times between 2019 and 2023, according to data from the Brazilian Institute of Geography and Statistics (IBGE).
Even when palm is planted only on degraded land, the spread of plantations puts “indirect pressure” on forested areas, said Eder Carvalho, chief inspector at Ibama’s Roraima branch.
“Old pasture is replaced by palm, with forested areas in turn being cleared to make way for new pasture and banana cultivation,” he said, explaining a process often referred to in climate and environmental risk assessments as “indirect land use change”, or ILUC.
It is because of the high risk of ILUC linked to palm oil cultivation – and the related carbon dioxide emitted when forests are destroyed – that virgin palm oil is not permitted as a feedstock for SAF in Europe.
Large plantations of a single crop, a practice called monoculture, cause other environmental problems, too, opponents say, taking a heavy toll on biodiversity, depleting water supplies and often involving substantial use of pesticides and other agrochemicals.
In the Amazon, researchers say monoculture also depletes the so-called flying rivers – moist air currents – that carry rain to other parts of Brazil.
“The forest stores a lot of water in the soil, and the trees have deep roots, which lead to evaporation that cools the air, keeping the temperature low,” said climatologist Carlos Nobre, from the National Institute for Space Research (INPE), one of the first scientists to study flying rivers.
Green fuel of the future?
Environmental campaigners warn that allowing the use of non-waste vegetable oils like virgin palm oil as a feedstock for SAF would both fuel forest loss and harm the global and local climate in big commodity-producing nations with important rainforest ecosystems such as Brazil, Malaysia and Indonesia.
“We can’t go backwards and return to fuels made from plants, like palm,” said Cian Delaney, a campaign coordinator with the Belgium-based Transport & Environment organisation, adding that no agricultural crop should be used in SAF production.
“This is a fundamental point from an environmental point of view. This cannot open space for the expansion of first-generation crops,” he said.
Air travel’s ‘holy grail’: Jet fuel made from CO2 and water prepares for take-off
Due to such concerns, the EU and Britain require SAF to be made from waste products such as used cooking oil (UCO), as they began this year to mandate SAF blending into jet fuel as a way to reduce air travel’s hefty carbon emissions.
But a months-long investigation by Climate Home and its partner The Straits Times has uncovered an opaque global supply chain for UCO that exposes jet fuel providers and their aviation clients to fraud risks and raises doubts about the climate benefits of the sector’s main green hope for the years ahead.
The US takes a more lenient approach on SAF feedstocks, allowing crop-based SAF derived from corn or sugarcane.
‘Saudi Arabia of SAF’
Brazil, which is set to allow non-waste vegetable oils like palm to be used in SAF production, wants to position itself as a major global player in efforts to decarbonise transport – including flying.
Aviation currently accounts for about 2.5% of global carbon emissions.
The government of President Luiz Inácio Lula da Silva has highlighted Brazil’s potential to become a leading producer of feedstocks for SAF, which it has dubbed the “fuel of the future”.
As part of the government’s plans, airlines operating in Brazil will have to meet emissions-cutting targets by using a SAF fuel blend, starting with a 1% emissions reduction in 2027 that will rise to 10% by 2037.
Since BBF unveiled its trailblazing SAF plan, several more such projects have been announced, with tallow – a byproduct of cattle ranching – soy oil and ethanol made from sugarcane among the planned feedstocks. Brazil unveiled $1 billion in public financing last year for SAF projects, and received more than 70 proposals.
Gilberto Peralta, CEO of Airbus Brazil, told an agricultural investment conference last year that Brazil could become “the Saudi Arabia of SAF”, with its potential production far exceeding domestic needs. Like other SAF advocates, he argues that ample areas of degraded land could be used, without causing further deforestation.
But the controversy over using non-waste feedstocks could be one of the “key challenges” facing Brazil’s nascent SAF industry in competing abroad, said Pedro Guedes, biofuels analyst at Brazilian think-tank E+ Energy Transition Institute.
Human rights warning
Despite the growing hype around green aviation fuel, BBF’s financial difficulties and ongoing debt negotiations with its creditors have clouded its target to launch SAF production at the 2 billion reais ($390 million) biorefinery this year or in 2026.
Asked whether the refinery was scheduled to launch as planned, the company told InfoAmazonia it “will not be able to comment on new business operations due to the complex debt restructuring process”, adding that BBF aimed to “continue its strategic plan and resume sustainable growth of its operations”.
In its first-quarter report this year, the company told investors it faced “difficulty in obtaining new lines of financing to complete long-term projects”, without directly mentioning the refinery.
The company’s financing troubles began in August 2023, when Brazil’s National Human Rights Council (CNDH) recommended that seven banks – among them state development bank BNDES, state-run Banco do Brasil and Banco da Amazônia – should halt loan deals with the company over suspected violations against Indigenous people and others in Acará and Tomé-Açu in Pará, related to land disputes.
For years, tension between some local communities and BBF has simmered in the Amazon region over land ownership and rights – sometimes erupting into violence. The CNDH’s recommendation to banks came months after state prosecutors sought the arrest of a BBF director and its security chief for offences including torture.
The company denies wrongdoing in the case and says it has “suffered continuous invasions” of its properties in Pará since 2021.
‘No hunting, no fishing’
Back in Roraima, beside a muddy unpaved road outside São João da Baliza, signs reading “Private property” and “Hunting and fishing prohibited” stand in front of a plantation of mature oil palms.
The protected Indigenous Territory (TI) of the WaiWái people lies only about 10 km (six miles) away, but local leader Alexandre Waiwai said community members had no interest in hunting on the palm plantations, preferring to search for animals in the forest beyond.
Standing in his wooden house, the walls decorated with bows and arrows, Waiwai said many people feared that animals grazing on the plantations might ingest agrochemicals – despite BBF’s assurance it does not use them on its palm crops.
“Some animals like boar eat palm fruit. We’re afraid of contamination through the meat we hunt and also our water,” Waiwai said.
Villagers also complain about fires in areas surrounding their territory and smoke billowing out of the chimneys of BBF’s industrial plant. Community health worker Vanilda Waiwai said locals report high levels of respiratory problems.
The challenges facing BBF could hold lessons for other firms hoping to launch SAF projects in Brazil.
Guedes, from the E+ Energy Transition Institute, said Brazilian SAF producers expect human rights to be key parameters for entering international markets, adding that the country’s recently created national SAF programme is likely to take into account rights as well as biodiversity safeguards.
“We know we’ll have to present our credentials on human rights. There’s a concern in general (about human rights impacts) and Brazil is aware of that concern,” he said.
This investigation was developed with the support of Journalismfund Europe.
The post Brazilian firm behind SAF plan found growing oil palm on deforested Amazon land appeared first on Climate Home News.
Brazilian firm behind SAF plan found growing oil palm on deforested Amazon land
Climate Change
DeBriefed 29 May 2026: Europe’s ‘mind-boggling’ May | Indian heat deaths | Nigeria’s solar mini-grids
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
UK, Europe and India battle heatwaves
‘MIND-BOGGLING’ MAY: The UK and continental Europe have set “mind-boggingly crazy” temperature records for May amid a deadly heatwave, reported the Financial Times. According to the Associated Press, the UK “smashed a century-old temperature record for the second time in 24 hours on Tuesday”. The newswire added that records “also fell in France, where temperatures reached 36C on Monday in the country’s south-west”. On Wednesday, Portugal hit a record May temperature of 40.3C, said BBC News.
‘BRUTAL REMINDER’: In parts of Italy, the heatwave triggered blackouts, reported Reuters. The heatwave has also been linked to more than a dozen deaths in the UK and France, including from people drowning and suffering heat-related deaths while competing in sporting events, said ABC News. Simon Stiell, the executive secretary of UN Climate Change, said the intense heatwaves were a “brutal reminder” of the cost of global warming, reported Politico. Carbon Brief has in-depth coverage of the record-shattering heatwave.
INDIA’S DEADLY HEAT: In the southern Indian states of Andhra Pradesh and Telangana, more than 100 people died within three days following an intense heatwave, reported the Khaleej Times. The publication noted that authorities urged people to stay indoors and avoid direct exposure to the heat. Meanwhile, some parts of India are “grappling with power cuts as record-breaking heat has pushed electricity demand to an all-time high”, reported Reuters.
Around the world
- CRUDE DIPS: The International Energy Agency (IEA) said global investments in oil projects will fall below $500bn in 2026, continuing a three-year decline, reported Bloomberg. Carbon Brief’s analysis of the data shows the US’s “data-centre boom” means it is now investing more in fossil-fuel power than China.
- DODGING NET-ZERO: The world’s biggest miner, Australian giant BHP, has backtracked on climate action by halting or delaying projects to cut “vast” amounts of emissions, according to a Guardian investigation.
- SOLAR SLIP: China’s new solar installations dropped for a fourth straight month, reflecting weakening domestic demand, said Bloomberg.
- NO LOGGING: Deforestation in the Brazilian Amazon fell last year to its lowest level since 2019, according to a new report, said Agence France-Presse.
- EXECUTIVE ACTION: Puerto Rico’s governor announced a state of emergency to fight a surge in coastal erosion, citing the need to protect natural resources and vulnerable communities, reported the Associated Press.
Four million
The number of homes in the UK with air conditioning, double the figure from three years ago, reported the Guardian. There are 29m households in the UK.
Latest climate research
- Carbon Brief will soon be launching a new fortnightly newsletter focused on climate research. Sign up for free today.
- LGBTQ+ households in the US are “significantly more likely” to face energy poverty and insecurity than the general population | Energy Research & Social Science
- Global rice-paddy greenhouse gas emissions have doubled over the past six decades | Nature Food
- Vegetation greening and human-caused warming are the “main drivers” of a surge in flash floods over the last decade | Science Advances
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Tuesday, Wednesday, Thursday and Friday.)
Captured
A Carbon Brief investigation has shed light on the impact of weather-related flooding on National Health Service (NHS) facilities across the UK. At least 67 NHS hospital wards, departments and other sites have been forced to temporarily close or relocate due to weather-related flooding. The chart above shows sites of weather-related flooding incidents at NHS facilities. The size of the circles indicates the number of incidents reported at each site.
Spotlight
How solar mini-grids can ‘help boost’ Nigeria’s economy
This week, Carbon Brief covers a new report on Nigeria’s solar mini-grid industry.
Amid the impact of the US-Iran war on the Nigerian economy, a new report has argued that solar-mini grids can help to reduce the country’s reliance on fossil fuels and create more than 200,000 jobs.
In Nigeria, Africa’s third-largest economy, the war has led to an increase in energy prices and a decrease in petrol consumption. Petrol is one of the country’s main sources of transport and household fuel. According to one estimate, prices have surged by up to 40% since the conflict commenced in February.
Although the Nigerian treasury has benefited from rising crude oil prices – the country is a major exporter of oil and gas – the impact has been most visible on the wider population.
Rising energy prices “have affected the purchasing power of workers”, Agnes Funmi Sessi, a labour union leader in Lagos, told Carbon Brief.
However, scaling the deployment of solar “mini-grids” could help the country move away from fossil fuels, stimulate rural economies and improve livelihoods, according to the new report authored by the thinktank, the Africa Policy Research Institute.
“We estimate that, by deploying over 10,000 mini-grids, the sector could create 212,688 direct full-time informal and productive-use jobs across the off-grid and under-grid market segments,” the report said.
A nascent industry
Solar “mini-grids” are small-scale, localised electricity generation and distribution systems powered by solar panels.
The report positioned Nigeria’s mini-grid sector as one of the fastest-growing in Africa, with the country having just 11 mini-grids in 2015 and 155 by 2024, along with at least 42 active developers.
Many of the companies within the sector are young and apply novel local techniques in their deployment of solar technology, the report said.
However, access to finance remains a huge barrier. According to the report, the sector may require up to $8bn to connect 35.4 million people to mini-grids.
“Most Nigerians want solar power in their homes, but it is a capital intensive business for vendors and customers,” Dr Ben Iheagwara, a renewable energy entrepreneur and policy analyst, told Carbon Brief.
The report urged the Nigerian government and its international partners to “attract private capital by de-risking investments and ensuring regulatory clarity and long-term planning”.
Other key recommendations for policymakers and stakeholders include investment in skills development and paying attention to the gender gap.
Powering rural communities
Many rural communities, which make up about 37% of the country, are disconnected from the national grid system, so often have to generate their own electricity through mini-grid systems.
According to Nigeria’s electricity regulator, NERC, a mini-grid is defined as a power generating system with an installed capacity of up to 10 megawatts.
A mini-grid can be powered by fossil fuels such as diesel or petrol, but solar power is now considered a cheaper and cleaner source.
With more than 80 million people lacking access to electricity in Nigeria, solar mini-grids are increasingly viewed as the lowest-cost electrification solution, the report said.
Watch, read, listen
MOVING FORWARD: The Energy Transition Show dug into electricity reform in South Africa, discussing the country’s coal legacy and the role of renewables.
ENERGY POVERTY: In an opinion article for Project Syndicate, executive director of the African Climate Foundation, Saliem Fakir, argued that the energy transition in emerging and developing economies is driven by economics and security rather than emissions targets.
VANISHING CITY: BBC News reported on a coastal community in Nigeria where the ocean has “already swallowed more than half of the town”.
Coming up
- 31 May: Colombia presidential elections
- 31 May-5 June: Global Environment Facility council meeting, Samarkand, Uzbekistan
- 2-5 June: The Venice Agreement for Peatlands workshop, Kisumu, Kenya
Pick of the jobs
- National Oceanography Centre, engagement assistant (external communications) | Salary: £28,254. Location: Southampton, UK
- Dangote Industries, decarbonisation specialist | Salary: Unknown. Location: Lagos, Nigeria
- City of New York, chief decarbonization officer | Salary: $261,469. Location: New York City
- Climate Central, writer and associate editor | Salary: $72,000-$75,000. Location: US (Remote)
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 29 May 2026: Europe’s ‘mind-boggling’ May | Indian heat deaths | Nigeria’s solar mini-grids appeared first on Carbon Brief.
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, 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 (GEAPP).
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In an interview with Climate Home News, Carol Koech, GEAPP’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. So 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.
(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.
Q&A: Will subsidy cuts for Chinese clean-tech exports hurt Africa’s solar boom?
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.
Nigerians bet on solar as global oil shock hits wallets and power supplies
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.
The post Q&A: How can African electricity access power jobs not just lightbulbs? appeared first on Climate Home News.
Q&A: How can African electricity access power jobs not just lightbulbs?
The “data-centre boom” is driving a surge in gas investment in the US, pushing its fossil-power spending ahead of China, according to the International Energy Agency (IEA).
A rapid expansion of data centres across the nation is at the heart of the US tech sector’s plans to continue “dominat[ing]” the global artificial intelligence (AI) industry.
High demand for electricity to power these data centres has led to companies rushing to build new gas-fired power plants across the country.
This trend, combined with “soaring” gas-turbine prices, drove a threefold increase in US gas‑power investment in 2025 – and the IEA expects this to continue throughout 2026.
As the chart below shows, Chinese investment in coal- and gas-fired power is expected to drop this year, amid domestic policy changes and the Iran war sending gas prices spiralling.
Together, these trends mean the IEA expects US investment in fossil-fuelled power plants to overtake China’s in 2026.
The IEA’s latest world energy investment report shows that spending on renewables and electricity grids continues to dominate at the global scale.
In the US, Trump administration policies such as the phase-out of tax credits for renewables has led to the IEA revising its forecast for new wind and solar power downwards.
At the same time, US electricity demand is expected to rise by an average of 2% per year from 2026 to 2030, with data centres contributing half of the overall increase.
This is leading to what the IEA calls an “AI-driven push” to build new gas-power plants in the US, the world’s largest data-centre market and largest gas producer.
Globally, orders for new gas-power plants increased to 130 gigawatts (GW) in 2025 – a 25-year high – and US demand was a “major factor” in this, according to the IEA.
Much of the demand is coming from tech companies in the US seeking to bypass grid connection queues by building “captive” gas-power plants.
As the chart below shows, since the start of 2025 these US captive data centres alone have signed off on more investment in new gas turbines than any country in the world – aside from the US itself.
Overall, investment in grid upgrades, power equipment and electricity generation to support the buildout of data-centre infrastructure around the world hit $105bn in 2025, according to the IEA.
This is more than the total invested in the energy sector across the whole of Africa – a continent where more than 600 million people do not have access to electricity.
The IEA notes that strong demand for gas-power plants for data centres in the US – and, to a lesser extent, the Middle East – is “limiting the availability of turbines for near-term deployment elsewhere in the world”.
The agency also points out that as the tech sector becomes a “major energy investor”, accounting for around 40% of all corporate power-purchase agreements, it is also “underpinning momentum” for emerging clean technologies, such as small modular nuclear reactors and advanced geothermal.
The post AI boom means US is now ‘investing more’ in fossil-fuel power than China appeared first on Carbon Brief.
AI boom means US is now ‘investing more’ in fossil-fuel power than China
DeBriefed 29 May 2026: Europe’s ‘mind-boggling’ May | Indian heat deaths | Nigeria’s solar mini-grids
Q&A: How can African electricity access power jobs not just lightbulbs?
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