This is the starting point for Europe’s lofty dreams of greener air travel – a collection point in Malaysia for greasy plastic bottles filled with discarded frying oil, thousands of miles from its final destination.
One Saturday morning last month in the city of Melaka, volunteers in green T-shirts rushed over as Adibah Rahim and her husband drove into the central square, eager to unpack, weigh and register her consignment of used cooking oil (UCO) – the “liquid gold” in European plans to ramp up production of sustainable aviation fuel (SAF).
Rahim left the collection point 90 ringgit ($21) richer, three ringgit per litre of oil – a welcome boost to her family’s household budget.
“We usually collect UCO from around 200 members of the public,” said Michael Andrew, sales manager for Evergreen Oil & Feed, the company running the Melaka collection with the local council and a supplier to leading European SAF producers including Spain’s Repsol, UK-based Shell and Finland’s Neste.
When made from waste such as UCO, rather than agricultural commodities like soy or palm oil, backers say SAF can slash planet-heating emissions by up to 80% over kerosene jet fuel, without taking up land that would otherwise be used for food crops, or fuelling forest destruction.
But behind SAF’s climate-friendly facade, a months-long investigation by Climate Home News and its partner The Straits Times has uncovered an opaque global supply chain that exposes jet fuel providers and their aviation clients to significant fraud risks, raising doubts about the climate benefits of the sector’s main green hope for the years ahead.
As SAF producers scramble for limited raw materials to meet new blending quotas in Europe and growing demand elsewhere, barely used and virgin palm oil is being passed off as UCO to traders that supply fuel companies, experts and industry operators told us. Palm oil that is not considered waste is not permitted under European Union rules for SAF because of its links to deforestation.
Our reporting focused on the UCO trade between Malaysia, the world’s second-biggest palm oil producer, and Spain, the EU’s largest aviation market and home to one of its SAF pioneers – oil-and-gas giant Repsol.
Fried in Spain?
Speaking at the World Economic Forum in Davos in January, Repsol CEO Josu Jon Imaz held up his company’s new 250-million-euro ($285 million) plant for renewable fuels, including SAF, near the historic Spanish port town of Cartagena as an example of how Europe can pursue a fair, green transition. Nearly half of the plant’s cost was financed by the EU’s lending arm, the European Investment Bank.
Repsol, which aims to reach net-zero emissions by 2050, started large-scale production of biodiesel and jet fuel – with its SAF mainly made from UCO – at the plant early last year.
Contrasting this with electric vehicles, many of them imported from China, Imaz said the raw material for Repsol’s renewable fuels “comes from Spanish farms and from the Spanish rural economy”.
In a promotional video for those fuels, Spanish celebrity chef Susi Díaz is seen dispensing advice to young cooks in the kitchen of her La Finca restaurant. Olive oil is then poured out of a pan into steel jugs as a voiceover explains how the waste cooking residue will be sent to the Repsol biofuels refinery.
Spain’s restaurants, however, are not the main source of Repsol’s UCO.
In 2024, more than 126,000 tonnes of UCO from Asia – enough to fill 50 Olympic-sized swimming pools – arrived in the Spanish region of Murcia, where Repsol’s flagship biofuels plant is located, according to trade data published by Spain’s tax agency.
Nearly two-thirds came from Malaysia, whose UCO exports to the region saw a 10-fold rise in the same year the energy heavyweight fired up its Cartagena SAF refinery.
The figures do not specify who provided or bought the raw material. But Climate Home obtained a list of shipments of UCO certified for the European market that were sourced from Malaysia by Repsol’s trading unit in Singapore, based on analysis of customs records provided by Data Desk, an investigative consultancy.
Repsol told Climate Home it “complements with imports when necessary” and receives raw material shipments from more than 20 countries. It declined to provide more details about its imports for “competitive reasons”.
The company is promoting the recycling of UCO from Spanish households – of which it says only 5% is currently collected – at its fuel stations across the country. But according to the trade data, Repsol purchased at least 53,000 tonnes of UCO from five Malaysian companies, including Evergreen Oil & Feed, in 2024.
No incidents involving fraudulent UCO were detected in Repsol’s supply chain, with its imports meeting EU rules on green certification. But our investigation found the company’s heavy reliance on Malaysian supplies exposes it to fraud risks that raise wider questions about global assertions over the sustainability of SAF.
-
Factbox: How we tracked Repsol’s UCO supply chain
Climate Home set out to find out what sustainable aviation fuels (SAF) are made of and how sustainable they really are. We focused on the supply chain of Repsol as the leading fuel supplier in the EU’s largest aviation market and a prominent advocate of SAF as a solution to decarbonising the sector.
Repsol does not publicly disclose detailed information on where the raw materials used in its SAF production are sourced from. A company representative told us that Repsol operates in “a global market, and for competitive reasons, we do not specify the origins or percentages of the raw materials”.
We analysed the summary audit report for the sustainability certificate issued for Repsol’s flagship SAF refinery in Cartagena. The document from International Sustainability and Carbon Certification (ISCC) lists the raw materials used at the plant, but provides only limited information on the origin of each specific feedstock.
We submitted a freedom of information request to the European Commission asking for a detailed list of shipments to Spain of used cooking oil (UCO), which we knew was Repsol’s main feedstock. In response, the Commission sent a highly redacted document obscuring the names of suppliers and recipients. We asked the Commission to review the decision, but after a nine-month wait, its original response was largely upheld.
Spanish authorities had asked for the names to be redacted, arguing that their disclosure would “infringe the legitimate interests” of those concerned, the Commission said.
We then analysed foreign trade records published by Spain’s tax authority. While the data did not include names of individual companies, it pointed to a spike in imports of UCO destined for the Murcia region – where Repsol’s SAF plant is located – from Malaysia and China in 2024.
Working with Data Desk – an investigative consultancy – we obtained a list of Malaysian companies that supplied UCO to Repsol’s trading unit in Singapore. This unit has said publicly that it is “deeply involved” in the supply chain for raw materials – mainly UCO – from Asia for renewable fuels, including SAF.
Having located Repsol’s suppliers, we then sent a reporter to attend a UCO collection event organised by the largest of these, Evergreen Oil & Feed, in the city of Melaka, where its owner confirmed it sells UCO to the Spanish energy giant.
Asked what steps it takes to fight fraud, Repsol said it operates a rigorous supplier monitoring system to ensure the sustainability and integrity of its SAF production. A “very strong” compliance process means dubious raw materials and suppliers suspected of misconduct are quickly weeded out, it added.
“Repsol firmly rejects any fraud that distorts competitiveness in the sector and supports all initiatives by relevant authorities to combat it,” the company said in emailed comments.
Shrinking air travel’s carbon footprint
Europe’s green aviation fuel refineries are boosting output because of new requirements by the EU and the UK for planes to use more SAF in the coming decades. From the start of this year, fuel supplied to airports across Europe needs to contain at least 2% of SAF, with targets rising gradually over the next 15 years, putting huge strain on tight global supplies.
SAF is crucial for shrinking aviation’s carbon footprint, according to industry body the International Air Transport Association (IATA), and is expected to account for 65% of emissions reductions by 2050, when the sector has committed to reaching net zero.
In 2023, emissions from international plane travel accounted for 2.5% of the world’s energy-related carbon emissions. As air travel increases, and other sectors are more easily able to decarbonise, that share is set to grow.
Repsol’s Imaz told financial analysts early last year that emissions-cutting alternatives to SAF – such as restricting short-haul flights – would represent “a drop in the ocean”.
But surging demand for SAF’s feedstock of choice, UCO, and a global certification system based on self-declaration at the start of the supply chain are encouraging fraud that undermines the new fuel’s green credentials.
‘Ridiculous’ collection numbers
This investigation found that by the time Asia-based traders ship UCO supplies overseas to refineries for processing into SAF, guaranteeing their environmental integrity is virtually impossible – despite the certification system on which fuel companies and airlines rely.
A source at a leading Malaysian UCO supplier to companies including Repsol told The Straits Times that some UCO collectors and restaurants are committing fraud by providing oil that does not qualify as used, although it is difficult to prove.
In Malaysia, which is among the world’s leading suppliers of both UCO and virgin palm oil, government-subsidised cooking oil is cheaper than UCO – providing a clear incentive for fraud.
In a 2024 report, Brussels-based environmental group Transport & Environment (T&E) cited figures showing that Malaysia already exports about three times as much UCO as it is estimated to collect domestically and import, raising concern about where that oil is coming from – and what it consists of.
The analysis by consultancy Stratas Advisors, used as a basis for the report, says the “substantial deficit” indicates the “risks of fraud and palm oil potentially compensating for the shortfall”.
In 2023, 458,000 tonnes of UCO originating in Malaysia were registered with International Sustainability and Carbon Certification (ISCC), the leading certification scheme recognised by the European Commission to demonstrate compliance with its biofuels sustainability criteria.
In absolute terms, that puts Malaysia second only to China. But if all that UCO were collected from its population, it would have had by far the highest volumes per person worldwide: 15.2 litres for each Malaysian inhabitant, compared with 0.9 litres per capita in neighbouring Indonesia and 3.8 litres in Spain.
Cian Delaney, campaigns coordinator at T&E, said that figure is “ridiculous”, adding that for it to be feasible, Malaysia would need to be “a world leading collection and refining system – which it isn’t”.
Exactly what it says on the bottle?
The waste ingredients from which SAF is made change hands multiple times in a largely opaque system. To verify their sustainability, European regulators rely on checks by private auditors and agencies that issue green certificates based on their findings.
But there is a blind spot: the restaurants, street stalls, households and factories from which the UCO is pooled self-declare the origin and authenticity of their contributions. Aside from ad-hoc spot checks and sampling, there is no way of knowing that all of these providers are telling the truth.
“The opportunity, or incidents, of fraud is very high,” said Vasu R Vasuthewan, the former Malaysia head for the ISCC.
Malaysian authorities recently uncovered criminal syndicates that had pocketed thousands of dollars a day by getting hold of large amounts of subsidised cooking oil, mixing it in with UCO, and then selling it on to industrial UCO traders.
Industry sources told Climate Home and The Straits Times that many households and restaurants are motivated to replace cooking oil after a single use – contrary to standard practice – and then sell it on as UCO. Cooking oil is considered waste when it is no longer fit for frying – generally after being used between three and five times.
“Restaurant compliance [with sustainability standards] may be very low,” said Vasuthewan, who now runs his own UCO import and export business. “Many will fake their declaration, hoping they won’t get caught.”
Malaysia’s Deputy Minister of Plantation and Commodities Chan Foong Hin, who has acknowledged that fraud is an issue in the UCO sector, said authorities are “actively monitoring the industry to prevent fraudulent activities” and strengthening enforcement mechanisms.
“To maintain supply chain integrity, various measures are in place, including traceability systems, certification requirements, and stringent export documentation,” he told The Straits Times.
Delaney of T&E said it is difficult for auditors to physically check the origin of the oil, since hundreds of restaurants can supply the same collection point, making it a “notable blind spot”.
Spot checks, patchy audits
In theory, there is a system in place to keep fraudulent stocks out of the supply chain. Buyers and regulators in Europe rely on audit companies to trace the raw materials used in SAF and prove their green credentials.
Those audits are verified by authorised certification systems like ISCC – which is led by the biofuels industry and, according to one source, enjoys “a kind of monopoly” in the sector. It then issues sustainability certificates to commodities traders and fuel suppliers.
ISCC says its certification process supports “sustainable, fully traceable, deforestation-free and climate-friendly supply chains”.
Yet while auditors conduct random field checks in some cases, that happens less often in countries outside the EU, industry experts say.
According to James Cogan, compliance and markets lead at Irish biofuel firm Clonbio, it is far easier for fraud to occur outside the EU where “it’s much less visible to us”.
An analysis by T&E in China, for example, showed that sampling of points of origin happened in less than 10% of the ISCC-approved audits, whereas in the EU it was about 30%.
Adam Kirby, ISCC’s senior sustainability manager, told Climate Home that auditors monitor volumes coming in and out of collection points for any suspicious behaviour, in addition to carrying out spot checks.
He added that the ISCC follows the requirements established by regulators like the European Commission.
-
Factbox: How ISCC verification works
Throughout the complex SAF supply chain, the ISCC requires operators to pass certified information on the origin of the raw materials and their carbon savings from one operator to another.
Traders typically receive UCO from individuals and restaurants at collection points or storage facilities audited under the scheme. But those bringing in the oil are mostly not vetted directly. In the majority of cases, they are simply required to fill out a self-declaration form stating that their UCO meets the definition of waste, meaning that it is not just regular palm oil, and is compliant with the ISCC’s sustainability criteria.
UCO collectors are required to keep all these forms in a database available for inspection by third-party auditors who check that the same amount of UCO coming into a facility is then going out.
If everything stacks up, the ISCC issues a “proof of sustainability” certificate which fuel producers like Repsol rely on to confidently buy the raw material in compliance with EU and/or international regulations.
Airlines are given access to these certificates as evidence they are buying SAF that meets sustainability requirements
In 2024, ISCC also conducted 79 special “integrity assessments” – around two-thirds targeting Asia-based suppliers – which independently monitored the work of auditors. In a third of cases, it found violations of its certification requirements, including an inability to demonstrate the traceability of products, leading to the withdrawal of 11 certificates.
From frying pan to frequent flier
Under the current system, the entire SAF supply chain relies on a long paper trail rooted in those self-declarations and sporadic inspections at the points where UCO is collected.
In Malaysia, Evergreen’s owner CK Lau told The Straits Times the company follows the “proper processes” in its collection based on the requirements established by the ISCC. He added that the documentation is “critical” as, otherwise, the company would not be able to export its UCO.
Repsol, for its part, said it requires “suppliers to be certified under European Commission-recognised voluntary regimes”.
In turn, airline companies that buy from Repsol such as International Airlines Group (IAG) – the parent company of British Airways, Iberia, Vueling, Aer Lingus and LEVEL – rely on documentation they get from it and other jet fuel providers, to show the SAF they are paying for has green certification.
In exceptional cases, IAG told Climate Home it has sent its own staff to carry out checks on the ground, as with a Shanghai-based Chinese supplier last year. It described the outcome of that audit – which included supply, record-keeping, environmental and health and safety standards – as “positive”.
Robert Boyd, Boeing’s Asia-Pacific sustainability lead who previously worked for IATA, thinks airlines’ exacting standards will bring positive change in the SAF industry. “You’ll see a race to the top… on sustainability, and it will, in a way, be self-regulated,” he added.
SAF certification faces EU scrutiny
In the meantime, following a string of fraud allegations about the authenticity of UCO-derived biofuels imported from China, the EU has been trying to ascertain whether the certification system governments and businesses rely on is fit for purpose.
EU authorities have been in talks to strengthen that system, leading to speculation that the ISCC could be suspended for failing to catch cases of biodiesel fraud. The ISCC denied in a statement that regulators had considered halting automatic EU-wide acceptance of its certificates, adding that its relationship with the European Commission remained constructive.
“There’s always bad actors, there’s always bad people, and there’s only a certain amount of policing that can be done in any industry,” said Kirby. “We at ISCC have done, I think, an incredible job.”
A European Commission spokeswoman said the bloc’s executive arm was “closely monitoring” the SAF market “to detect and prevent fraud, which risks undermining the EU’s ambition to effectively decarbonise air transport”.
Authorities in the US and Singapore, which wants to position itself as a regional SAF hub, have also voiced concern about fraud in the SAF supply chain.
“We are aware of concerns raised by various stakeholders, including the EU and the US, regarding fraudulent practices in the SAF supply chain. We share the same concerns as these pose risks to market confidence, fair trading and development of a nascent SAF market,” said Daniel Ng, chief sustainability officer at the Civil Aviation Authority of Singapore (CAAS).
He said the authority was working with the International Civil Aviation Organization’s Committee on Aviation Environmental Protection to develop “harmonised standards for feedstock verification to prevent further fraudulent practices”.
Demand for UCO sizzles
Whatever action regulators take to keep SAF fraud-free, leading European refiners such as Repsol are pushing for a level global playing field as well as more public funding to bring down costs and help develop the nascent sector on the continent.
IATA warned earlier this month that the European mandates had caused the SAF price paid by airlines to double because of hefty compliance fees being charged by producers.
Repsol’s aviation head Carlos Suárez Cubillo warned that fuel producers in parts of the world with laxer rules could produce SAF “with less regulation and less control of the feedstock… and here in Europe that could de-incentivise the production, the construction of new facilities”.
In Brazil, for example, an emerging SAF industry is gearing up to use crop-based feedstocks that are commonly linked to deforestation – and are therefore banned in Europe – such as soy and palm oil, as well as sugarcane-based ethanol, which has been linked to labour abuses and modern slavery.
An investigation by Climate Home’s partner in Brazil, InfoAmazonia, found that the palm oil producer behind a planned biorefinery in the Amazon region – billed as Brazil’s first SAF project – is growing the crop on land areas subject to sanctions by the national environment agency over illegal deforestation, and is struggling financially after rights abuse allegations.
Brazilian firm behind SAF plan found growing oil palm on deforested Amazon land
IATA hopes its efforts to put in place a global registry for SAF, launched in April as a voluntary initiative, will boost transparency around feedstocks and their greenhouse gas savings – and enable airlines to have some level of visibility and comparability between countries, fuel providers and airports.
SAF producers and airlines are also looking to other waste-based materials to meet rising mandates – especially as more advanced fuels made from green hydrogen and carbon dioxide, known as e-SAF, are still being developed and tested.
Air travel’s ‘holy grail’: Jet fuel made from CO2 and water prepares for take-off
Repsol, for example, recently closed a deal with US vegetable oils giant Bunge to source camelina and safflower – non-food crops that can grow on poor land – to produce hydrotreated vegetable oil (HVO) for biodiesel and SAF.
In January, it also announced it would invest more than 800 million euros ($906 million) in Europe’s first plant in the Catalan city of Tarragona to produce “renewable” methanol from organic urban waste that now ends up in landfill, for use in maritime, road and aviation transport from 2029.
But in the meantime, Europe’s overwhelming reliance on UCO means it will continue to import supplies from Asia – despite the concerns over fraud, said Sophie Byron, global head of biofuels pricing at S&P Global Commodity Insights.
“That trade flow is not going away anytime soon,” she said.
‘Token effort’ on aviation emissions?
At Repsol’s vast refinery complex near Cartagena, the colourful pipes and metal cylinders of the flagship SAF unit are dwarfed by the site’s traditional, fossil fuel-refining infrastructure.
Repsol’s plants processed 43.3 million tonnes of crude oil last year, according to its annual report. In contrast, its renewable fuels production capacity stands at 1.25 million tonnes per year – of which the Cartagena plant accounts for 250,000 tonnes, including SAF.
It is a token effort towards tackling rising aviation emissions, said Pedro Luengo of Spanish environmental network Ecologistas en Acción, standing on a hillside overlooking the complex.
As Spain’s airports prepare for another record-breaking summer holiday influx this year, Luengo warned that the hype around SAF could prove counter-productive in the fight against climate change by justifying yet more air travel.
“Instead of gradually substituting fossil fuels with other [green] sources and consuming less, what we are doing is expanding the opportunities because we have more fuels available to use,” he said. “That is a contradiction.”
This investigation was developed with the support of Journalismfund Europe.
The Straits Times in Singapore will publish a version of this story in the coming days.
The post Is the world’s big idea for greener air travel a flight of fancy? appeared first on Climate Home News.
Is the world’s big idea for greener air travel a flight of fancy?
In 2026, the dangers of fossil fuel dependence have been laid bare like never before. The illegal invasion of Iran has brought pain and destruction to millions across the Middle East and triggered a global energy crisis impacting us all. Communities in the Pacific have been hit especially hard by rising fuel prices, and Australians have seen their cost-of-living woes deepen.
Such moments of crisis and upheaval can lead to positive transformation. But only when leaders act with courage and foresight.
There is no clearer statement of a government’s plans and priorities for the nation than its budget — how it plans to raise money, and what services, communities, and industries it will invest in.
As we count down the days to the 2026-27 Federal Budget, will the Albanese Government deliver a budget for our times? One that starts breaking the shackles of fossil fuels, accelerates the shift to clean energy, protects nature, and sees us work together with other countries towards a safer future for all? Or one that doubles down on coal and gas, locks in more climate chaos, and keeps us beholden to the whims of tyrants and billionaires.
Here’s what we think the moment demands, and what we’ll be looking out for when Treasurer Jim Chalmers steps up to the dispatch box on 12 May.
1. Stop fuelling the fire
2. Make big polluters pay
3. Support everyone to be part of the solution
4. Build the industries of the future
5. Build community resilience
6. Be a better neighbour
7. Protect nature
1. Stop fuelling the fire
In mid-April, Pacific governments and civil society met to redouble their efforts towards a Fossil Fuel Free Pacific. Moving beyond coal, oil and gas is fundamental to limiting warming to 1.5°C — a survival line for vulnerable communities and ecosystems. And as our Head of Pacific, Shiva Gounden, explained, it is “also a path of liberation that frees us from expensive, extractive and polluting fossil fuel imports and uplifts our communities”.
Pacific countries are at the forefront of growing global momentum towards a just transition away from fossil fuels, and it is way past time for Australia to get with the program. It is no longer a question of whether fossil fuel extraction will end, but whether that end will be appropriately managed and see communities supported through the transition, or whether it will be chaotic and disruptive.
So will this budget support the transition away from fossil fuels, or will it continue to prop up coal and gas?
When it comes to sensible moves the government can make right now, one stands out as a genuine low hanging fruit. Mining companies get a full rebate of the excise (or tax) that the rest of us pay on diesel fuel. This lowers their operating costs and acts as a large, ongoing subsidy on fossil fuel production — to the tune of $11 billion a year!
Greenpeace has long called for coal and gas companies to be removed from this outdated scheme, and for the billions in savings to be used to support the clean energy transition and to assist communities with adapting to the impacts of climate change. Will we see the government finally make this long overdue change, or will it once again cave to the fossil fuel lobby?
2. Make big polluters pay
While our communities continue to suffer the escalating costs of climate-fuelled disasters, our Government continues to support a massive expansion of Australia’s export gas industry. Gas is a dangerous fossil fuel, with every tonne of Australian gas adding to the global heating that endangers us all.
Moreover, companies like Santos and Woodside pay very little tax for the privilege of digging up and selling Australians’ natural endowment of fossil gas. Remarkably, the Government currently raises more tax from beer than from the Petroleum Resource Rent Tax (PRRT) — the main tax on gas profits.
Momentum has been building to replace or supplement the PRRT with a 25% tax on gas exports. This could raise up to $17 billion a year — funds that, like savings from removing the diesel tax rebate for coal and gas companies, could be spent on supporting the clean energy transition and assisting communities with adapting to worsening fires, floods, heatwaves and other impacts of climate change.
As politicians arrive in Canberra for budget week, they will be confronted by billboards calling for a fair tax on gas exports. The push now has the support of dozens of organisations and a growing number of politicians. Let’s hope the Treasurer seizes this rare window for reform.
3. Support everyone to be part of the solution
As the price of petrol and diesel rises, electric vehicles (EVs) are helping people cut fuel use and save money. However, while EV sales have jumped since the invasion of Iran sent fuel prices rising, they still only make up a fraction of total new car sales. This budget should help more Australians switch to electric vehicles and, even more importantly, enable more Australians to get around by bike, on foot, and on public transport. This means maintaining the EV discount, investing in public and active transport, and removing tax breaks for fuel-hungry utes and vans.
Millions of Australians already enjoy the cost-saving benefits of rooftop solar, batteries, and getting off gas. This budget should enable more households, and in particular those on lower incomes, to access these benefits. This means maintaining the Cheaper Home Batteries Program, and building on the Household Energy Upgrades Fund.
4. Build the industries of the future
If we’re to transition away from fossil fuels, we need to be building the clean industries of the future.
No state is more pivotal to Australia’s energy and industrial transformation than Western Australia. The state has unrivaled potential for renewable energy development and for replacing fossil fuel exports with clean exports like green iron. Such industries offer Western Australia the promise of a vibrant economic future, and for Australia to play an outsized positive role in the world’s efforts to reduce emissions.
However, realising this potential will require focussed support from the Federal Government. Among other measures, Greenpeace has recommended establishing the Australasian Green Iron Corporation as a joint venture between the Australian and Western Australian governments, a key trading partner, a major iron ore miner and steel makers. This would unite these central players around the complex task of building a large-scale green iron industry, and unleash Western Australia’s potential as a green industrial powerhouse.
5. Build community resilience
Believe it or not, our Government continues to spend far more on subsidising fossil fuel production — and on clearing up after climate-fuelled disasters — than it does on helping communities and industries reduce disaster costs through practical, proven methods for building their resilience.
Last year, the Government estimated that the cost of recovery from disasters like the devastating 2022 east coast floods on 2019-20 fires will rise to $13.5 billion. For contrast, the Government’s Disaster Ready Fund – the main national source of funding for disaster resilience – invests just $200 million a year in grants to support disaster preparedness and resilience building. This is despite the Government’s own National Emergency Management Agency (NEMA) estimating that for every dollar spent on disaster risk reduction, there is a $9.60 return on investment.
By redirecting funds currently spent on subsidising fossil fuel production, the Government can both stop incentivising climate destruction in the first place, and ensure that Australian communities and industries are better protected from worsening climate extremes.
No communities have more to lose from climate damage, or carry more knowledge of practical solutions, than Aboriginal and Torres Strait Islander peoples. The budget should include a dedicated First Nations climate adaptation fund, ensuring First Nations communities can develop solutions on their own terms, and access the support they need with adapting to extreme heat, coastal erosion and other escalating challenges.
6. Be a better neighbour
The global response to climate change depends on the adequate flow of support from developed economies like Australia to lower income nations with shifting to clean energy, adapting to the impacts of climate change, and addressing loss and damage.
Such support is vital to building trust and cooperation, reducing global emissions, and supporting regional and global security by enabling countries to transition away from fossil fuels and build greater resilience.
Despite its central leadership role in this year’s global climate negotiations, our Government is yet to announce its contribution to international climate finance for 2025-2030. Greenpeace recommends a commitment of $11 billion for this five year period, which is aligned with the global goal under the Paris Agreement to triple international climate finance from current levels.
This new commitment should include additional funding to address loss and damage from climate change and a substantial contribution to the Pacific Resilience Facility, ensuring support is accessible to countries and communities that need it most. It should also see Australia get firmly behind the vision of a Fossil Fuel Free Pacific.
7. Protect nature
There is no safe planet without protection of the ecosystems and biodiversity that sustain us and regulate our climate.
Last year the Parliament passed important and long overdue reforms to our national environment laws to ensure better protection for our forests and other critical ecosystems. However, the Government will need to provide sufficient funding to ensure the effective implementation of these reforms.
Greenpeace has recommended $500 million over four years to establish the National Environment Agency — the body responsible for enforcing and monitoring the new laws — and a further $50 million to Environment Information Australia for providing critical information and tools.
Further resourcing will also be required to fulfil the crucial goal of fully protecting 30% of Australian land and seas by 2030. This should include $1 billion towards ending deforestation by enabling farmers and loggers to retool away from destructive practices, $2 billion a year for restoring degraded lands, $5 billion for purchasing and creating new protected areas, and $200 million for expanding domestic and international marine protected areas.
Conclusion
This is not the first time that conflict overseas has triggered an energy crisis, or that a budget has been preceded by a summer of extreme weather disasters, highlighting the urgent need to phase out fossil fuels. What’s different in 2026 is the availability of solutions. Renewable energy is now cheaper and more accessible than ever before. Global momentum is firmly behind the transition away from fossil fuels. The Albanese Government, with its overwhelming majority, has the chance to set our nation up for the future, or keep us stranded in the past. Let’s hope it makes some smart choices.
The 2026 budget test: Will Australia break free from fossil fuels?
Anne Jellema is Executive Director of 350.org.
The war on Iran and Lebanon is a deeply unjust and devastating conflict, killing civilians at home, destroying lives, and at the same time sending shockwaves through the global economy. We, at 350.org, have calculated, drawing on price forecasts from the International Monetary Fund (IMF) and Goldman Sachs, just how much that volatility is costing us.
Even under the IMF’s baseline scenario – a de facto “best case” scenario with a near-term end to the war and related supply chain disruptions – oil and gas price spikes are projected to cost households and businesses globally more than $600 billion by the end of the year. Under the IMF’s “adverse scenario”, with prolonged conflict and sustained price pressures, we estimate those additional costs could exceed $1 trillion, even after accounting for reduced demand.
Which is why we urgently need a power shift. Governments are under growing pressure to respond to rising fuel and food costs and deepening energy poverty. And it’s becoming clearer to both voters and elected officials that fossil dependence is not only expensive and risky, but unnecessary.
People who can are voting with their wallets: sales of solar panels and electric vehicles are increasing sharply in many countries. But the working people who have nothing to spare, ironically, are the ones stuck with using oil and gas that is either exorbitantly expensive or simply impossible to get.
Drain on households and economies
In India, street food vendors can’t get cooking gas and in the Philippines, fishermen can’t afford to take their boats to sea. A quarter of British people say that rising energy tariffs will leave them completely unable to pay their bills. This is the moment for a global push to bring abundant and affordable clean energy to all.
In April, we released Out of Pocket, our new research report on how fossil fuels are draining households and economies. We were surprised by the scale of what we found. For decades, governments have reassured people that energy price spikes are unfortunate but unavoidable – the result of distant conflicts, market forces or geopolitical shocks beyond anyone’s control. But the numbers tell a different story.
-
Santa Marta: Ministers grapple with practicalities of fossil fuel phase-out
Around 60 governments that want to make progress on transitioning away from coal, oil and gas are meeting in Colombia to work out how they can do it an equitable way -
Why the transition beyond fossil fuels depends on cities and collective action
Cities will help identify concrete pathways for an equitable shift to clean energy at the Santa Marta conference, with C40 members aiming to halve their fossil fuel use by 2030
What we are living through today is not an energy crisis. It is a fossil fuel crisis. In just the first 50 days of the Middle East conflict, soaring oil and gas prices have siphoned an estimated $158 billion–$166 billion from households and businesses worldwide. That is money extracted directly from people’s pockets and transferred, almost instantly, into fossil fuel company balance sheets. And this figure only captures the immediate impact of price spikes, not the permanent economic drain of fossil dependence. Fossil fuels don’t just cost us once, they cost us over and over again.
First, through our bills. Every time there is a war, an embargo or a supply disruption, fossil fuel prices surge. For ordinary people, this means higher costs for energy, transport and food. Many Global South countries have little or no fiscal space to buffer the shock; instead, workers and families pay the price.
Second, through our taxes. Governments around the world continue to pour vast sums of public money into fossil fuel subsidies. These are often justified as a way to protect the most vulnerable at the petrol pump or in their homes. But in reality, the benefits are overwhelmingly captured by wealthier households and corporations. The poorest 20% receive just a fraction of this support, while public finances are drained.
Third, through climate impacts. New research across more than 24,000 global locations gives a granular account of the true costs of extreme heat, sea level rise and falling agricultural yields. Using this data to update IMF modelling of the social cost of carbon, we found that fossil fuel impacts on health and livelihoods amount to over $9 trillion a year. This is the biggest subsidy of all, because these massive and mounting costs are not charged to Big Oil – they are paid for by governments and households, with the poorest shouldering the lion’s share.
Massive transfer of wealth to fossil fuel industry
Adding up direct subsidies, tax breaks and the unpaid bill for climate damages, the total transfer of wealth from the public to the fossil fuel industry amounts to $12 trillion even in a “normal” year without a global oil shock. That’s more than 50% higher than the IMF has previously estimated, and equivalent to a staggering $23 million a minute.
The fossil fuel industry has become extraordinarily adept at profiting from instability. When conflict drives up prices, companies do not lose, they gain. In the current crisis, oil producers and commodity traders are on track to secure tens of billions of dollars in additional windfall profits, even as households face rising bills and governments struggle to manage the fallout.
Fossil fuel crisis offers chance to speed up energy transition, ministers say
This growing disconnect is impossible to ignore. Investors are advised to buy into fossil fuel firms precisely because of their ability to generate profits in times of crisis. Meanwhile, ordinary people are told to tighten their belts.
In 2026, unlike during the oil shocks of the 1970s, clean energy is no longer a distant alternative. Now, even more than when gas prices spiked due to Russia’s invasion of Ukraine in 2022, renewables are often the cheapest option available. Solar and wind can be deployed quickly, at scale, and without the volatility that defines fossil fuel markets.
How to transition from dirty to clean energy
The solutions are clear. Governments must implement permanent windfall taxes on fossil fuel companies to ensure that extraordinary profits generated during crises are redirected to support households. These revenues can be used to reduce energy bills, invest in public services, and accelerate the rollout of clean energy.
Second, we must shift subsidies away from fossil fuels and towards renewable solutions, particularly those that can be deployed quickly and equitably, such as rooftop and community solar. This is not just about cutting emissions. It is about building a more stable, fair and resilient energy system.
Finally, we need binding plans to phase out fossil fuels altogether, replacing them with homegrown renewable energy that can shield economies from future shocks. Because what the current crisis has made clear is this: as long as we remain dependent on fossil fuels, we remain vulnerable – to conflict, to price volatility and to the escalating impacts of climate change.
The true price of fossil fuels is no longer hidden. It is visible in rising bills, strained public finances and communities pushed to the brink. And it is being paid, every day, by ordinary people around the world.
It’s time for the great power shift.
Full details on the methodology used for this report are available here.
The Great Power Shift is a new campaign by 350.org global campaign to pressure governments to bring down energy bills for good by ending fossil fuel dependence and investing in clean, affordable energy for all
The post What fossil fuels really cost us in a world at war appeared first on Climate Home News.
Computer models that use artificial intelligence (AI) cannot forecast record-breaking weather as well as traditional climate models, according to a new study.
It is well established that AI climate models have surpassed traditional, physics-based climate models for some aspects of weather forecasting.
However, new research published in Science Advances finds that AI models still “underperform” in forecasting record-breaking extreme weather events.
The authors tested how well both AI and traditional weather models could simulate thousands of record-breaking hot, cold and windy events that were recorded in 2018 and 2020.
They find that AI models underestimate both the frequency and intensity of record-breaking events.
A study author tells Carbon Brief that the analysis is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
AI weather forecasts
Extreme weather events, such as floods, heatwaves and storms, drive hundreds of billions of dollars in damages every year through the destruction of cropland, impacts on infrastructure and the loss of human life.
Many governments have developed early warning systems to prepare the general public and mobilise disaster response teams for imminent extreme weather events. These systems have been shown to minimise damages and save lives.
For decades, scientists have used numerical weather prediction models to simulate the weather days, or weeks, in advance.
These models rely on a series of complex equations that reproduce processes in the atmosphere and ocean. The equations are rooted in fundamental laws of physics, based on decades of research by climate scientists. As a result, these models are referred to as “physics-based” models.
However, AI-based climate models are gaining popularity as an alternative for weather forecasting.
Instead of using physics, these models use a statistical approach. Scientists present AI models with a large batch of historical weather data, known as training data, which teaches the model to recognise patterns and make predictions.
To produce a new forecast, the AI model draws on this bank of knowledge and follows the patterns that it knows.
There are many advantages to AI weather forecasts. For example, they use less computing power than physics-based models, because they do not have to run thousands of mathematical equations.
Furthermore, many AI models have been found to perform better than traditional physics-based models at weather forecasts.
However, these models also have drawbacks.
Study author Prof Sebastian Engelke, a professor at the research institute for statistics and information science at the University of Geneva, tells Carbon Brief that AI models “depend strongly on the training data” and are “relatively constrained to the range of this dataset”.
In other words, AI models struggle to simulate brand new weather patterns, instead tending forecast events of a similar strength to those seen before. As a result, it is unclear whether AI models can simulate unprecedented, record-breaking extreme events that, by definition, have never been seen before.
Record-breaking extremes
Extreme weather events are becoming more intense and frequent as the climate warms. Record-shattering extremes – those that break existing records by large margins – are also becoming more regular.
For example, during a 2021 heatwave in north-western US and Canada, local temperature records were broken by up to 5C. According to one study, the heatwave would have been “impossible” without human-caused climate change.
The new study explores how accurately AI and physics-based models can forecast such record-breaking extremes.
First, the authors identified every heat, cold and wind event in 2018 and 2020 that broke a record previously set between 1979 and 2017. (They chose these years due to data availability.) The authors use ERA5 reanalysis data to identify these records.
This produced a large sample size of record-breaking events. For the year 2020, the authors identified around 160,000 heat, 33,000 cold and 53,000 wind records, spread across different seasons and world regions.
For their traditional, physics-based model, the authors selected the High RESolution forecast model from the Integrated Forecasting System of the European Centre for Medium-Range Weather Forecasts. This is “widely considered as the leading physics-based numerical weather prediction model”, according to the paper.
They also selected three “leading” AI weather models – the GraphCast model from Google Deepmind, Pangu-Weather developed by Huawei Cloud and the Fuxi model, developed by a team from Shanghai.
The authors then assessed how accurately each model could forecast the extremes observed in the year 2020.
Dr Zhongwei Zhang is the lead author on the study and a researcher at Karlsruhe Institute of Technology. He tells Carbon Brief that many AI weather forecast models were built for “general weather conditions”, as they use all historical weather data to train the models. Meanwhile, forecasting extremes is considered a “secondary task” by the models.
The authors explored a range of different “lead times” – in other words, how far into the future the model is forecasting. For example, a lead time of two days could mean the model uses the weather conditions at midnight on 1 January to simulate weather conditions at midnight on 3 January.
The plot below shows how accurately the models forecasted all extreme events (left) and heat extremes (right) under different lead times. This is measured using “root mean square error” – a metric of how accurate a model is, where a lower value indicates lower error and higher accuracy.
The chart on the left shows how two of the AI models (blue and green) performed better than the physics-based model (black) when forecasting all weather across the year 2020.
However, the chart on the right illustrates how the physics-based model (black) performed better than all three AI models (blue, red and green) when it came to forecasting heat extremes.
The authors note that the performance gap between AI and physics-based models is widest for lower lead times, indicating that AI models have greater difficulty making predictions in the near future.
They find similar results for cold and wind records.
In addition, the authors find that AI models generally “underpredict” temperature during heat records and “overpredict” during cold records.
The study finds that the larger the margin that the record is broken by, the less well the AI model predicts the intensity of the event.
‘Warning shot’
Study author Prof Erich Fischer is a climate scientist at ETH Zurich and a Carbon Brief contributing editor. He tells Carbon Brief that the result is “not unexpected”.
He adds that the analysis is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
The analysis, he continues, is a “warning shot” against replacing traditional models with AI models for weather forecasting “too quickly”.
AI models are likely to continue to improve, but scientists should “not yet” fully replace traditional forecasting models with AI ones, according to Fischer.
He explains that accurate forecasts are “most needed” in the runup to potential record-breaking extremes, because they are the trigger for early warning systems that help minimise damages caused by extreme weather.
Leonardo Olivetti is a PhD student at Uppsala University, who has published work on AI weather forecasting and was not involved in the study.
He tells Carbon Brief that “many other studies” have identified issues with using AI models for “extremes”, but this paper is novel for its specific focus on extremes.
Olivetti notes that AI models are already used alongside physics-based models at “some of the major weather forecasting centres around the world”. However, the study results suggest “caution against relying too heavily on these [AI] models”, he says.
Prof Martin Schultz, a professor in computational earth system science at the University of Cologne who was not involved in the study, tells Carbon Brief that the results of the analysis are “very interesting, but not too surprising”.
He adds that the study “justifies the continued use of classical numerical weather models in operational forecasts, in spite of their tremendous computational costs”.
Advances in forecasting
The field of AI weather forecasting is evolving rapidly.
Olivetti notes that the three AI models tested in the study are an “older generation” of AI models. In the last two years, newer “probabilistic” forecast models have emerged that “claim to better capture extremes”, he explains.
The three AI models used in the analysis are “deterministic”, meaning that they only simulate one possible future outcome.
In contrast, study author Engelke tells Carbon Brief that probabilistic models “create several possible future states of the weather” and are therefore more likely to capture record-breaking extremes.
Engelke says it is “important” to evaluate the newer generation of models for their ability to forecast weather extremes.
He adds that this paper has set out a “protocol” for testing the ability of AI models to predict unprecedented extreme events, which he hopes other researchers will go on to use.
The study says that another “promising direction” for future research is to develop models that combine aspects of traditional, physics-based weather forecasts with AI models.
Engelke says this approach would be “best of both worlds”, as it would combine the ability of physics-based models to simulate record-breaking weather with the computational efficiency of AI models.
Dr Kyle Hilburn, a research scientist at Colorado State University, notes that the study does not address extreme rainfall, which he says “presents challenges for both modelling and observing”. This, he says, is an “important” area for future research.
The post Traditional models still ‘outperform AI’ for extreme weather forecasts appeared first on Carbon Brief.
Traditional models still ‘outperform AI’ for extreme weather forecasts
-
Climate Change9 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases9 months ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Renewable Energy6 months agoSending Progressive Philanthropist George Soros to Prison?
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits
-
Greenhouse Gases10 months ago
嘉宾来稿：探究火山喷发如何影响气候预测