The board of the loss and damage fund is set to pick its host nation in July as it speeds up the process to ensure hard-hit countries can directly access money to help them recover from the unavoidable effects of climate change.
As the 26-member board held its first three-day meeting in Abu Dhabi this week, discussions centered on the administrative steps needed to get the fund up and running, and giving out money as soon as possible.
Selecting the host country for the board is a priority because only then will it be able to take up legal responsibility and enter into formal arrangements with the World Bank, which governments have asked to host the loss and damage fund “on an interim basis” despite the initial reluctance of developing countries.
The World Bank has until mid-June to confirm it is willing and able to take on this role. The decision rests largely on the bank’s ability to meet 11 conditions, including allowing developing-country governments and organisations working with vulnerable communities to receive money directly without going through intermediaries like multilateral development banks or UN agencies.
“Too many cooks”
Daniel Lund, a loss and damage board member from Fiji, said that overhead costs and management fees from multiple layers of middlemen swallow up a high proportion of development funding in general.
“For small island developing states, it is always too many cooks and not enough ingredients,” he told Climate Home. “A lack of direct access is a particularly unacceptable scenario when it comes to finance for addressing loss and damage because much of what we need to do is direct support [to] the individuals and communities that bear the burden [of climate change]”.
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Concerns have been fuelled by the World Bank’s lack of experience in working with direct access to communities in its other operations, climate finance experts said. But during the meeting in Abu Dhabi, the bank sought to provide reassurances, indicating its willingness to be flexible on this matter and find a solution.
Renaud Seligmann, the World Bank representative at the meeting, told board members the bank is looking into a model that would “break new ground” and that it is “prepared to innovate and design with you to make it work”.
Host selection fast-tracked
For the World Bank, a primary concern lies with the risks attached to giving money to hundreds of small entities that may have less strict compliance processes. For that reason, it wants the board of the loss and damage fund to take on legal responsibility in case funds are misused. And as that legal personality can only be obtained from the host country, the selection process is being fast-tracked.
Interested countries have until early June to submit their candidacy – Barbados, Antigua and Barbuda, Bahamas and the Philippines have already thrown their hats in the ring. The board is expected to make a final decision at the next board meeting scheduled for July 9-12.
The board is picking up the pace of its work after its first meeting was delayed by three months as a result of developed countries’ failure to appoint their members on time.
A person moves their belongings at a flooded residential complex following heavy rainfall, in Dubai, United Arab Emirates, April 18, 2024. REUTERS/Amr Alfiky
The board was forced to tackle logistical challenges on the final day when stormy weather in Abu Dhabi moved the deliberations online. Scientists have warned that the Arabian peninsula will suffer more heavy rain at 1.5C of global warming than it did in pre-industrial times, and recent floods in the neighbouring city of Dubai shut down the airport and caused major economic damage.
Lund said the progress made at the first meeting “in some respects was surprising”, but there is still a long way to go before money reaches climate-vulnerable communities. “We have clear instructions, but translating that blueprint into contracts, roles, policies, locations, jobs and structures is going to be a shared headache for all board members over the course of this year and beyond,” he added.
Civil society at the table
Civil society representatives argued there is a need to broaden the direct participation of frontline communities struggling with climate impacts in the fund’s operations. The first board meeting limited participation to two people per UN stakeholder group – some of which represent millions, even billions, of people – such as Indigenous Peoples, youth, and women and girls.
“This fund must be different to fulfill the expectation – people-centered, human rights-based, gender-responsive – from the start, with meaningful participation and engagement throughout,” said Liane Schalatek, associate director of the Heinrich in Washington who attended the board meeting.
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“Board members all stressed the importance of civil society observer and communities engagement and welcomed it,” she added. “Now that verbal support needs to be operationalised, including through dedicated financial support.”
After sorting through all of its procedural matters, the board will start addressing thornier issues such as how to disburse money and how to fill its coffers with more cash. So far, it has garnered about $660 million in pledges.
While board members hope to have the fund’s structure in place by COP29 this November, it is not expected to start handing out money until 2025.
(Reporting by Matteo Civillini; editing by Joe Lo and Megan Rowling)
The post Loss and damage board speeds up work to allow countries direct access to funds appeared first on Climate Home News.
Loss and damage board speeds up work to allow countries direct access to funds
The world’s largest producer of renewable fuel for planes, Neste, is sourcing key ingredients for its “green” fuel from an opaque supply chain that enables fresh palm oil to be passed off as waste, highlighting a global problem facing the aviation industry.
Many governments and airlines are pinning their hopes for more climate-friendly flying on sustainable aviation fuel (SAF). Finnish biofuels giant Neste says it makes SAF with 100% “renewable waste and residue raw material”, such as animal fat and used cooking oil (UCO).
But Climate Home News and Swedish broadcaster SVT found that Neste’s biggest Malaysian supplier of UCO accepted fresh palm oil during a public drive intended to collect waste oil, without asking questions or carrying out checks.
Our investigation did not uncover direct evidence that this or other virgin palm oil has been used by Neste to produce SAF. But industry experts say that, once oil supplies are mixed at source, it is hard for refiners to keep it out of their supply chain.
Neste indicated it would look into our findings, adding that it is currently not aware of any verified cases of fraud that are directly connected to its raw material sourcing.
Planet-heating palm oil
Mounting evidence of widespread fraud risks in the SAF supply chain raises doubts about the climate benefits of the aviation sector’s main green strategy for the years ahead, analysts say.
Palm oil that has not been used for cooking or frying is not permitted under rules on which raw materials can be made into SAF supplied in Europe, Neste’s largest market, because of its links to deforestation.
The clearing of forests for palm oil plantations in Southeast Asia and beyond has long been associated with the loss of carbon-storing jungle, posing a threat to efforts to tackle planet-heating emissions and protect endangered wildlife.
Analysis of Malaysian custom records indicates that Neste sourced around 250,000 tonnes of UCO from Malaysia in 2024. That is more than double the total amount collected in the country annually, according to estimates published by Brussels-based NGO Transport and Environment (T&E). Discrepancies like these have fuelled suspicions about what UCO shipments from Malaysia contain.
A former director at Neste, speaking on condition of anonymity, told Climate Home News that, while the Finnish firm is a highly professional operator, no fuel producer can claim with 100% certainty that its supply chain does not include virgin palm oil or mislabelled raw materials due to the complexity of the sector and weak enforcement by regulators.
The findings add to questions about the integrity of green jet fuel after an investigation by Climate Home News and The Straits Times last year uncovered similar flaws in the supply chain. With more countries mandating the use of small but growing amounts of SAF, and fuel producers scrambling for limited raw materials, barely used and virgin palm oil is being passed off as UCO to traders, industry sources told us.
‘Very high’ fraud incidence
Demand for SAF has surged as governments and airlines promise to cut emissions from a sector with few low-carbon alternatives. Its backers say SAF can reduce planet-heating emissions by up to 80% over kerosene jet fuel when made with waste materials like used cooking oil that do not take up land for food crops or drive deforestation.
But the growing gap between what the world’s kitchens and food factories can realistically provide and what the aviation industry requires has created a clear incentive for fraud.
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That holds true in Malaysia, a key sourcing country for SAF suppliers like Neste, where government-subsidised palm oil for cooking can be bought cheaply and then sold on for a higher price as UCO. For that reason, there are additional requirements that the oil should not be deliberately contaminated or manipulated for profit.
“The opportunity, or incidents, of fraud is very high,” Vasu R Vasuthewan, former Malaysia head for the ISCC, a global biofuels certification body, told The Straits Times last year.
No questions asked
On a Saturday in mid-January, dozens of people arrive at the central square in the historic city of Melaka carrying plastic bottles of all shapes and sizes filled with cooking oil.
A banner above a stall advertises a public collection drive organised by Evergreen Oil & Feed, Malaysia’s largest supplier of UCO to Neste and a provider to other multinational fuel companies, including Repsol and Shell.
The idea is simple: individuals bring used cooking oil from home and receive 3 Malaysian ringgit per litre, the equivalent of about $0.65.
Among those bringing greasy containers that morning is an undercover reporter sent by SVT to put the system to the test. She carries a transparent plastic jerry can. Inside it is not waste oil from a kitchen, but fresh palm oil she had poured into the container earlier that day.
The journalist steps forward and hands the jerry can to a volunteer. Without asking any questions about the oil’s origin or contents, the volunteer places it on a scale and notes the weight. He then unscrews the cap and pours the liquid into a large plastic drum, mixing it with oil brought in by other members of the public.
Afterwards, the reporter walks to a nearby table where another volunteer asks her to fill out a simple form before receiving payment for the oil. She writes down a fake name and phone number. No verification is requested, and the cash changes hands.
The blue plastic drum is sealed and loaded onto the back of a truck, which will transport the batch to Evergreen Oil & Feed’s processing facility on the outskirts of Melaka. There, the oil will enter the industrial supply chain that feeds the global market for “waste-based” biofuels, including SAF.
Checks intended to catch fraud
Evergreen Oil & Feed did not reply to a request for comment on what happened at its UCO collection in January. In May 2025, the company’s owner CK Lau told The Straits Times that the firm follows the “proper processes” in its collection based on requirements established by International Sustainability and Carbon Certification (ISCC), the leading certification scheme recognised by the European Commission.
Carl Nyberg, senior vice president for renewable products at Neste, said in an interview with SVT that ensuring the traceability and integrity of the raw materials used in the production of green fuels is of utmost importance for the Finnish firm.
“If we receive concerns or hints that there are anomalies or suspicions around the raw materials we receive, we go in and investigate and then we stop the supplies from such suppliers,” he added.
After watching the footage of the oil collection in Melaka, Nyberg said Neste would “take this on board and dig a bit deeper” to understand the background. “Our objective is, of course, to ensure that we have suppliers that are behaving correctly, delivering the feedstocks that they have promised to deliver us, as we have in the contract,” he added.
A Neste spokesperson later added in a statement that each raw material shipment may undergo additional checks, including “advanced laboratory testing” performed at the company’s own facilities. “Based on the results of analyses on the raw materials we have received, we have not received raw material cargoes with typical profiles of crude palm oil,” they added.
Neste exports outweigh collection
As Neste’s largest provider of UCO in Malaysia, Evergreen Oil & Feed supplied the Finnish giant with more than 50,000 tonnes of the raw material – enough to fill 20 Olympic-sized swimming pools – in the first half of 2025, according to customs data obtained by SVT.
In total, Neste sourced around 250,000 tonnes of UCO from all the Malaysian traders it dealt with in 2024, the data showed.
However, only 100,000 tonnes of UCO are estimated to be collected annually in Malaysia, according to a 2024 analysis by consultancy Stratas Advisors for T&E. “Our suspicion is that not all of these volumes are legit waste oils, suggesting that some of them could be [virgin] palm oil,” said Simon Suzan, a data analyst at T&E.
Under the current system, the entire SAF supply chain largely relies on a long paper trail rooted in self-declarations submitted by restaurants, factories and households providing the UCO, alongside sporadic inspections at the points where the raw material is collected.
In Europe, the verification of green fuel supply chains largely rests on certification systems like ISCC, which is led by the biofuels industry and, according to one source, enjoys “a kind of monopoly” in the sector. The body 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”. But the certifier has come under frequent criticism from campaigners and researchers, who argue that its auditing system relies heavily on company-provided data and can struggle to detect fraud in complex global supply chains.
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The problems in Malaysia are not isolated. A separate investigation by AFP and SourceMaterial recently found that Indonesian companies targeted in a palm oil fraud probe had supplied European firms including Neste and Eni.
In February, Indonesian police detained 11 people over suspicions that local companies had conspired with government officials to pass off palm oil as a waste byproduct called palm oil mill effluent (POME), including by offering bribes.
Neste said it had instructed its supplier to exclude the implicated Indonesian companies from its supply chain after the investigation became public. Analysis of periodic samples from shipments between 2023 and 2025 were “consistent with palm-derived waste”, not palm oil, it added. There is no suggestion that Neste had any knowledge of, or involvement in, the alleged Indonesian fraud.
EU ‘not happy’ about fraud risks
Neste turns the raw materials it buys from Southeast Asia and other regions into renewable fuels at its refineries in Singapore, the Netherlands and Finland.
Last year, the company sold nearly three-quarters of its renewable fuels, including SAF, in Europe, where green fuels are central to efforts to reduce the climate impact of aviation. The European Union, alongside the UK, introduced the world’s first SAF mandates in January 2025, requiring fuel suppliers to blend at least 2% SAF with conventional kerosene.
Anna-Kaisa Itkonen, EU spokesperson for climate and energy, said the European Commission is “of course not happy” about the risk of virgin palm oil contaminating the SAF supply chain.
“This was not the purpose when we started the policy and when we wanted to create this global wake-up call of greening aviation,” she added in an interview with SVT. “It undermines the policy because it is basically [de]frauding those who are complying with the rules.”
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Itkonen said the European Commission is doing the best it can within its remit, but enforcement is up to individual member states. “We also have the possibility to make these rules more stringent and look into them and revise them,” she added.
Even if regulation is tightened, ensuring fraud-free SAF supplies will not be an easy task, industry insiders warn.
The former Neste director told Climate Home News that, with poor enforcement of the rules especially in source countries, complete control of the supply chain is practically impossible for companies handling enormous volumes of raw materials, like the Finnish firm.
“I don’t think anyone can say 100% putting their hand on a Bible,” the ex-employee added when asked whether Neste could confidently claim no virgin palm oil enters its SAF supply chain.
“The market needs a level playing field. If Neste rejects questionable supply, competitors will accept it. It’s a market-wide problem of fraudulent feedstocks.”
The post Top green jet fuel producer linked to suspect waste-oil supply chain appeared first on Climate Home News.
Top green jet fuel producer linked to suspect waste-oil supply chain
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