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UK chancellor Rachel Reeves has announced new measures to cut energy bills alongside a “pay-per-mile” electric-vehicle levy as part of Labour’s second budget.

The policy changes are expected to cut typical household bills by around £134 per year, amid intense political scrutiny of energy prices and a government pledge to reduce them.

This cut is achieved through a combination of moving a portion of renewable-energy subsidies from bills to general taxation and ending a support scheme for energy-efficiency measures.

Reeves has also retained a long-standing freeze on fuel-duty rates on petrol and diesel, albeit with a plan to “gradually” reverse the extra cuts introduced under the previous government.

With fuel-duty receipts set to fall as people opt for electric vehicles, the government has also laid out its plan for an “electric vehicle excise duty” from 2028, to replace lost revenue.

The government has also announced new “transitional energy certificates” to allow new oil and gas production at or nearby to existing sites, as part of its plan for the future of the North Sea.

Below, Carbon Brief runs through the key climate- and energy-focused announcements from the budget.

Energy bills

The chancellor used her budget speech to announce two major changes that will cut dual-fuel energy bills for the average household by £134 per year from April 2026.

The first is to bring the “energy company obligation” (ECO) to an end, once its current programme of work wraps up at the end of the financial year. This will cut bills by £63 per year, according to Carbon Brief analysis of the forthcoming energy price cap, which will apply from 1 January 2026.

The second is for the Treasury to cover three-quarters of the cost of the “renewables obligation” (RO) for households, for three years from April 2026. This will cut bills by £70 per year.

The total impact for typical households – those using gas and electricity – will be to cut bills by an average of £134 per year over the three-year period to April 2029.

(As explained in footnote 77 of the budget “red book”, this rises to an average of £154 per year, when including households that use electric heating and are not connected to the gas grid. This figure is then rounded to £150 per year in government communications around the budget.)

Notably, given the political attention on energy prices, this three-year period of discounted bills runs through to just before the next general election, which must be held by August 2029.

There has been furious debate over the past year over the causes and the most effective solutions to the UK’s high energy bills. A Carbon Brief factcheck published earlier this year showed that it was high gas prices, rather than net-zero policies, which has been keeping bills high.

Nevertheless, a politicised debate has continued and there has also been increasing attention on the factors that will put pressure on bills in the near future, such as efforts to strengthen the electricity grid.

At the same time, the advisory Climate Change Committee (CCC) has repeatedly advised the government that it should make electricity cheaper, as so much of the UK’s climate strategy depends on getting homes and businesses to use electricity for heat and transport.

The changes in the budget will go some way to addressing this.

Carbon Brief calculations show that they would cut unit prices for domestic electricity users by around 4p per kilowatt hour (kWh) – roughly 16% – from 28p/kWh under the next price-cap period from the start of 2026, down to around 23p/kWh.

However, the red book says the government wants to further “improve” the price of electricity relative to gas, often referred to as “rebalancing”. It explains:

“The government is committed to doing more to reduce electricity costs for all households and improve the price of electricity relative to gas…The government will set out how it intends to deliver this through the ‘warm homes plan’.”

Under ECO, which has been in place since 2013, utility firms must install energy efficiency measures in fuel-poor homes, funded by a levy on energy bills.

It replaced two earlier schemes, known as CERT and CESP, with reduced funding after then-prime minister David Cameron reportedly told ministers to “get rid of the green crap”. This shift coincided with a precipitous decline in the number of homes being treated with new efficiency measures.

The ECO scheme has been hit by a series of scandals, with a recent National Audit Office report citing “clear failures” in its design, resulting in “widespread issues with the quality of installations”.

Pre-budget media reports had speculated that the government would pay for ongoing energy efficiency initiatives after scrapping ECO, using funding from the forthcoming “warm homes plan”. This speculation had suggested that subsidies for heat pumps would be cut as a result.

Instead, the budget includes an extra £1.5bn of funding for the warm homes plan, to cover the additional cost of taking over from ECO. (The total cost of ECO was around £1.7bn.)

Adam Bell, head of policy at the consultancy group Stonehaven and the government’s former head of energy policy, tells Carbon Brief that, while this £1.5bn is not the total cost of ECO, the scheme had been “terribly inefficient”. He adds that a government-run alternative that tackles home upgrades on an area-by-area basis was “likely to be cheaper”.

Contrary to much pre-budget speculation in the media, the chancellor did not reduce the already-discounted 5% rate of VAT on energy bills. Nor did she scrap the “carbon price support”, a top-up carbon tax on electricity generators.

Finally, the budget red book says that the government “recently confirmed” an increase in the level of relief for certain industrial users, from electricity network charges.

It says that, in total from 2027, the “British industrial competitiveness scheme” will cut electricity costs for affected businesses by £35-40 per megawatt hour.

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Electric vehicles

The budget confirmed the introduction of a new “pay-per-mile” charge for electric vehicles, to raise more than £1bn in additional tax revenue by the end of this decade. 

It has long been expected that fuel-duty receipts will begin to fall as electric vehicles start making up a rising share of cars on the road.

In its report accompanying the budget, the Office for Budget Responsibility (OBR) forecasts a decline to around half of current levels in the 2030s in real terms, before falling to near-zero by 2050.

As such, the new charge on EVs will help maintain road infrastructure, the budget states. The “red book” notes that the new tax will see EV drivers paying a “fair share”. It adds: 

“All vehicles contribute to congestion and wear and tear on the roads, but drivers of petrol and diesel vehicles pay fuel duty at the pump to contribute their fair share, whereas drivers of electric vehicles do not currently pay an equivalent.”

The electric vehicle excise duty (eVED) will come into effect in April 2028 at a rate of 3p per mile for battery electric vehicles and 1.5p per mile for plug-in hybrid cars, according to the OBR report.

The budget red book says this will mean the average driver of a battery electric vehicle paying “around £240 per year”. This is roughly half of the rate of fuel duty paid per mile by petrol and diesel car owners. (See: Fuel duty.)

(EVs will remain significantly cheaper to run than their combustion-engine equivalents. According to the Energy and Climate Intelligence Unit thinktank, EVs would still be £1,000 cheaper to run per year than petrol equivalents, even after the new eVED charge.)

Currently, there is no equivalent to fuel duty for electric vehicles. Excise duty was brought in for EVs for the first time in April 2025, costing £10 for the first year and then rising to a standard rate of £195 per year – an increase announced in last year’s budget.

The introduction of the eVED is expected to raise £1.1bn in 2028-29 and £1.9bn in 2030-31, dependent on electric-vehicle uptake in the coming years.

Impact of introducing a mileage-based charge for electric vehicles, showing both tax revenue as a share of GDP (left) and electric and non-electric cars as a share of total car stock (right).
Impact of introducing a mileage-based charge for electric vehicles, showing both tax revenue as a share of GDP (left) and electric and non-electric cars as a share of total car stock (right). Source: OBR.

The revenue generated by the eVED will “support investment in maintaining and improving the condition of roads”, the budget adds, with the government committing to £2bn in annual investment by 2029-30 for local authorities to repair and renew roads.

A consultation will be published seeking views on the implementation of eVED, the budget notes. It adds that there will be no requirement to report where or when the miles are driven, or to install trackers in cars.

The OBR report states that the additional charge of the eVED “is likely” to reduce demand for electric cars, due to increasing their lifetime costs.

Overall, it estimates that there will be around 440,000 fewer electric car sales across the forecast period relative to its previous forecast.

New support for EV buyers and manufacturers also announced in the budget could help offset 130,000 of this impact, the report notes.

This includes a boost to the electric car grant, which was launched in July and currently offers up to £3,750 off eligible vehicles. 

The budget announces an increase of £1.3bn in funding for the programme, as well as an extension out to 2029-30.

Additional measures include an increase in the threshold at which EV owners have to pay the “expensive car supplement” from £40,000 to £50,000 from April 2026. This is expected to cost the government £0.5bn in 2030-31, the OBR notes.

The government will delay changes to “benefit-in-kind” (BIK) rules for employee car-ownership schemes until April 2030. This is a continuation of a policy announced in Reeve’s first budget as chancellor in 2024, which delayed the previously planned increase in BIK rates to 9% per year for electric vehicles by 2029, instead increasing them to just 2% per year out to 2029-30.

EV manufacturers will see the research and innovation Drive35 programme extended, with a further £1.5bn allocated to the project to 2035. This takes total funding for the project to £4bn over the next 10 years, according to the government. 

Beyond the vehicles, the budget includes investment for EV charging infrastructure – also partly funded through the eVED revenues, it notes – with an additional £100m allocated. This builds on the £400m announced in the spending review in June.  

Additionally, funding will be allocated to local authorities to support the rollout of public chargepoints, a consultation will be launched on permitting rights for cross-pavement EV charging and a 10-year 100% business-rates relief for eligible EV chargepoints will be introduced.

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Fuel duty

Former Conservative governments repeatedly cancelled inflation-linked increases in fuel duty – a tax paid on petrol and diesel – every year since 2010.

Fuel duty was cut by an additional 5p per litre in 2022 by then-Conservative chancellor Rishi Sunak in response to the energy crisis.

Successive freezes in fuel duty have substantially increased the UK’s carbon dioxide (CO2) emissions by lowering the cost of driving and, therefore, encouraging people to use their cars more and low-carbon transport options less.

Last year, Reeves opted to maintain the existing freezes and cuts introduced by her predecessors. 

In the new autumn budget, she has once again announced a freeze on fuel-duty rates for an additional five months from April until September 2026.

Beyond that, the government says the 5p additional cut introduced in 2022 will be reversed – “gradually returning to March 2022 levels by March 2027”. However, the planned increase in fuel-duty rates in line with inflation for 2026-27 will be cancelled.

Then, from April 2027 onwards, the government says that fuel-duty rates will increase annually to reflect inflation.

In total, the 16 years of delays to expected increases in fuel duty rates – plus the “temporary” 5p cut – will have cost the Treasury £120bn by 2026-27, compared to the expected rise in line with inflation from 2010 onwards, according to the OBR.

Increasing fuel duty is very unpopular. However, research by the Social Market Foundation thinktank suggests persistent freezes have “done little for average Brits”, with the wealthiest in the country disproportionately benefiting.

Meanwhile, the government is also responding to the long-term decline in fuel-duty receipts “as more people choose to switch to cleaner, greener electric cars” by introducing a new per-mile charge on electric-vehicle use from 2028. (See: Electric vehicles.)

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North Sea oil and gas

Much of the environmentally focused coverage previewing the budget centred on government plans to allow for new oil and gas production on or near existing field sites in the North Sea.

This was formally announced in the North Sea future plan, a 127-page document outlining the government’s approach to put the region “at the heart of Britain’s clean energy and industrial future” and “deliver the next generation of good, new jobs”.

(The plan was published in response to a consultation held earlier this year on the North Sea’s future, involving nearly 1,000 responses from stakeholders, including oil and gas companies and environmental groups.)

The future plan outlines that the North Sea is an ageing oil and gas basin, “much more so than other areas of the world”, and that production has been “naturally declining over the past 25 years”.

It includes the chart below, showing past and projected oil and gas production.

Past and projected oil and gas production in the North Sea.
Past and projected oil and gas production in the North Sea. Credit: UK Department for Energy Security and Net-Zero

It adds that the decline of the basin caused direct jobs in oil and gas production to fall by a third between 2014 and 2023, according to official statistics

The plan also has a section on the UK’s “proud history” of international climate leadership.

It notes that the UK is committed to the Paris Agreement, which has the aim to keep global warming to well-below 2C, while pursuing efforts to keep it at 1.5C, by the end of the century.

It continues:

“Scientific evidence from the International Energy Agency, UN Environment Programme and Intergovernmental Panel on Climate Change (IPCC) shows that new fossil fuel exploration risks exceeding the 1.5C threshold. The IPCC warns that emissions from existing fossil fuel infrastructure alone could surpass the remaining global carbon budget, reinforcing the urgency to phase out fossil fuels.”

The plan says that the UK “now has the opportunity to lead in clean energy”, which “is both a national and global imperative”.

With this backdrop, the plan reaffirms Labour’s manifesto commitment to not issue any new oil and gas licences.

However, the plan says that the government will introduce “transitional energy certificates” to allow new oil and gas drilling on or near to existing fields, as long as this additional production does not require exploration.

An analysis by the North Sea transition charity Uplift found that the amount of oil and gas that could be produced by such certificates is “relatively small”.

It suggested that new discoveries within a 50km radius of existing productions contain just 25m barrels of oil and 20m barrels of oil equivalent of gas.

(By comparison, the Rosebank oil field, which is currently seeking development consent from the government, would produce nearly 500m barrels of oil and gas equivalent in its lifetime.)

In a footnote on page 36, the plan says that these certificates will have no effect on the process for giving development consent to new oil and gas projects.

Last year, Carbon Brief reported that several large oil and gas projects are currently seeking development consent from the government.

Because they already have a license, these projects are able to get around Labour’s policy on not issuing any new oil and gas licenses and still seek final approval.

However, a landmark legal case in 2024 means that all of such projects, including Rosebank, will now have to present the government with information about how much emissions will come from burning the oil and gas they plan to produce, before they can be approved.

Responding to today’s budget news, Tessa Khan, executive director of Uplift, said that the “government is right to end the fiction of endless drilling”, but should “put an end to all new fields, including the huge Rosebank oil field”.

The North Sea future plan also says that the government will change the objectives of the North Sea Transition Authority, the government-run company that controls and regulates offshore oil and gas production.

Before the change, the NSTA was in the awkward position of being responsible for both ensuring the oil and gas sector reaches net-zero and maximising the economic recovery of oil and gas reserves from the North Sea.

Now, the government wants the NSTA to balance three objectives: to “maximise societal economic value”; support the energy secretary in meeting net-zero goals; and consider the long-term benefits of the transition for North Sea workers, communities and supply chains.

In addition, the North Sea future plan also announces that the government will establish the “North Sea jobs service”, a national employment programme offering support for oil and gas workers seeking new opportunities in clean energy, defence and advanced manufacturing.

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Nuclear, ‘green finance’, critical minerals and rail

The section in the budget about “investing in the UK’s energy security” largely focuses on the government’s plans for nuclear power.

At the last spending review, the government announced £14.2bn of investment in the planned Sizewell C nuclear-power plant in Suffolk.

The plant is set to be supported under the “regulated asset base” (RAB) model, which levies an extra charge on consumer energy bills to support the cost of the development. OBR analysis concludes this will generate £0.7bn in receipts in 2026-27, doubling to £1.4bn in 2030-31.

The budget also says the prime minister is issuing a “strategic steer” on the “safe and efficient delivery” of nuclear developments through “proportionate regulation and stronger collaboration”.

It says the government will additionally issue an “implementation plan”, within three months, in response to the recently published report on nuclear regulation. It says it will “complete implementation within two years”.

The government has also updated its “green financing framework”, which sets guidelines for the type of expenditures that can raise funding from investors under the UK’s green financing programme. It has now added nuclear power to the list of eligible expenditures.

Other climate-related measures mentioned in the budget include regional funding, such as £14.5m for a new low-carbon industrial centre in Grangemouth, Scotland, and support for “critical minerals, renewable energy and marine innovation” in Cornwall.

This builds on the government’s “critical mineral strategy” released last week, which specifically highlights Cornwall as a site of “mineral wealth”, where mining for lithium, tin and tungsten is being undertaken. 

The government has also announced a one-year freeze on rail fares, which it states could save commuters taking expensive routes “more than £300 per year”.

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Fossil fuel expansion threatens COP31 hosts’ credibility, experts warn

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Türkiye and Australia risk losing their credibility as hosts of this year’s COP31 UN climate summit if they keep betting on fossil fuels at home, climate policy experts have warned. 

As governments are expected to continue fraught talks over how to advance the global transition away from oil, coal and gas in Antalya this November, both of the co-host countries are pursuing fossil fuel expansion at home, without a national timeline to phase out their use.

Türkiye has accelerated its rollout of wind and solar energy in recent years. But that progress has yet to make a dent in the country’s dependence on fossil fuels for power, as demand growth has outpaced the renewables build-out, new analysis by Climate Action Tracker (CAT) has found.

The share of electricity generated by burning coal and fossil gas – 56% in 2025 – has barely changed since 2019, and total fossil fuel use in the power sector, and the emissions it produces, are still rising, according to the report released on Friday.

The Turkish government has also signalled that fossil fuels will remain a central component of its energy mix and has outlined plans to expand the country’s burgeoning domestic gas production in the Black Sea.

‘Need to demonstrate seriousness’

Australia, which will chair the Antalya negotiations, relies on fossil fuels for over 60% of its electricity, with coal alone still supplying 45%. According to experts, it lacks an ambitious plan to shift away from fossil fuels at home, relying heavily on carbon offsetting to reach its climate targets.

Australia is also the world’s third-largest fossil fuel exporter and has plans to expand its coal and gas production, which is backed by significant government subsidies. It recently upset climate groups by approving an extension of the Saraji open-cut coal mine in Queensland.  

Türkiye says it has “final decision” at COP31 despite Australia running negotiations

Jennifer Morgan, a senior fellow with the Fletcher School of Law and Diplomacy at Tufts University and former climate envoy for Germany, said Türkiye and Australia need to demonstrate their seriousness about their COP presidency roles by leading by example on the energy transition.

“They have made progress in renewable energy,” she told reporters this week. “But I think their credibility – and their ability to therefore bring momentum and good outcomes to the COP – will depend on their taking further action at home.” 

Türkiye’s electrification homework

The co-hosts’ fossil fuel policies are being scrutinised in the run-up to the annual UN climate summit, with much riding on the signal climate diplomacy sends on the energy transition.

Türkiye has so far stopped short of putting any overt political capital behind the fossil fuel transition itself. It has instead been rallying support for a new global electrification target of 35% by 2035, seen as the centrepiece of this year’s non-negotiated Action Agenda put forward by Ankara.

Electrification emerges as COP31 priority

COP31 president Murat Kurum said last week the push to electrify economies – through measures like electric vehicles and heat pumps – will “automatically” lead to a reduction in the use of fossil fuels.

Türkiye’s own energy plan projects the country’s electrification rate would fall short on the global target and only hit 25% by 2035, according to the CAT report, which called for a “substantial step-change” in electrification policies and the deployment of more renewable power and grid infrastructure. 

Coal still dominant

CAT’s analysts also warned that, without a parallel phase-out of fossil fuels, rising electricity demand risks being met in part by coal and gas, failing to deliver the emissions reductions the electrification target is meant to achieve. 

Türkiye has had some success in its clean energy build-out: the share of electricity generation from wind and solar rose to 22% in 2025, up from 12% in 2020, according to the CAT report.

But coal’s role in Türkiye’s electricity mix has also grown, in both its share and absolute terms, over the past decade. And while reliance on fossil gas has declined overall, it still plays an important role in Ankara’s energy policy, which is pushing to boost domestic gas production in the Black Sea.

Pilot boats assist the Osman Gazi as it navigates the Bosphorus on its way to the Black Sea on May 29, 2025 in Istanbul, Turkey. The platform will dock at the Filyos Port in the Black Sea and will stay for a 20 year mission and will provide double the natural gas intake of Turkey to 20 million cubic meters per day. (Photo by Chris McGrath/Getty Images)

Pilot boats assist the Osman Gazi as it navigates the Bosphorus on its way to the Black Sea on May 29, 2025 in Istanbul, Turkey. The platform will dock at the Filyos Port in the Black Sea and will stay for a 20 year mission and will provide double the natural gas intake of Turkey to 20 million cubic meters per day. (Photo by Chris McGrath/Getty Images)

Dr Niklas Höhne from the NewClimate Institute said the government could demonstrate leadership as COP31 president by building on its recent successes in increasing its renewable energy capacity and announcing targets and plans to phase out coal and gas ahead of the summit.

According to CAT, Türkiye should phase out coal by 2040 and fossil gas by 2045 at the latest to align its power sector with global efforts to limit the rise in global temperatures to 1.5C above preindustrial times. 

Türkiye quiet on fossil fuel roadmap

Ümit Şahin, coordinator of climate change studies at the Istanbul Policy Center (IPM), said Türkiye’s strategy is to approach the fossil fuel debate exclusively from the “end-use point of view”.

“I don’t expect any push from the Turkish presidency to the producer countries in terms of fossil fuel production,” he told reporters.

Neither does Şahin believe the Turkish presidency will throw its political weight behind another big-ticket item for COP31: a new global roadmap to transition away from fossil fuels. 

Brazil took on the responsibility to voluntarily draft this document outside of the formal negotiations as a way to break the deadlock at last year’s UN summit in Belém when governments clashed over whether to develop one. 

The outgoing COP30 presidency will deliver the roadmap in early November – but it will be up to Türkiye and Australia to guide countries towards a decision on how the blueprint will be taken forward, either inside or outside the negotiations.

Leadership needed

Australia’s Chris Bowen, COP31’s president of negotiations, promised to lobby producing countries to deliver a “meaningful step forward” on the fossil fuel transition in an interview with The Guardian earlier this year. But he has been quiet on the role Australia sees for the fossil fuel transition roadmap. 

Natalie Jones, senior policy advisor at the International Institute for Sustainable Development (IISD), said the COP31 co-presidents “must provide clear leadership” on this process.

“This roadmap cannot be left in a dusty drawer,” she told journalists. “Rather, it must be translated into action, with all countries identifying what elements they can adopt or develop in their own national roadmap.”

    Like Türkiye, Australia has yet to produce a national blueprint for winding down coal, gas and oil. Rather than moving toward a phase-out, state and federal governments have kept expanding fossil fuel licensing over the past year, according to a new analysis published this month by Climate Analytics.

    Under existing policy, both coal and gas are on track to remain in Australia’s power system as late as 2050 – a trajectory the report defines as incompatible with the 1.5C limit the country says it’s committed to. 

    No binding end dates for the Netherlands

    Analysts are watching out for national transition roadmaps as a bellwether for governments that claim to be leaders in the global shift away from fossil fuels.

    The climate and environment ministers of Colombia and the Netherlands, which are co-hosting the Santa Marta conference, embrace on the podium during the high-level segment in Santa Marta, Colombia, April 28, 2026 (Photo: Colombia Ministry of Environment and Sustainable Development)

    The climate and environment ministers of Colombia and the Netherlands, which are co-hosting the Santa Marta conference, embrace on the podium during the high-level segment in Santa Marta, Colombia, April 28, 2026 (Photo: Colombia Ministry of Environment and Sustainable Development)

    The Netherlands, which co-hosted the first fossil fuel transition conference in Santa Marta this year, published its own domestic roadmap earlier this week. The document followed through on a pledge that “leadership on transitioning away from fossil fuels must be backed by concrete action, not just ambitious words”, said a spokesperson for Stientje van Veldhoven, the Dutch minister for climate policy.

    But experts criticised the plan for failing to set a binding end date for the country’s fossil fuel production and use. While targeting a rapid increase in renewables capacity, the Dutch government only commits to phasing out oil, gas and coal “in the energy and feedstock system to eventually zero, and to minimise fossil use” by 2050. 

    Yvo de Boer, a former Dutch diplomat and executive secretary of the UN climate body, said the Dutch roadmap falls short of what’s needed to give industry the confidence to deploy capital in support of the energy transition with greater predictability. 

    “Ultimately, a roadmap without deadlines is nothing more than a footpath paved with good intentions,” he added, writing on LinkedIn. 

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    How clean energy can boost business for Africa’s food producers

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    Despite millions of dollars in grants and technical help for African businesses to power farming and other food production activities with renewable energy, most efforts remain stuck at the early stages because they struggle to find the investors, markets and expertise they need to grow.

    This was the message from a coalition of global institutions working on energy, water and agriculture at this month’s Africa Food Systems Forum in Kigali, Rwanda.

    “Energy, agriculture, water and nutrition actors rarely design solutions together,” the Agri-Energy Coalition said in a Call to Action on powering food systems with clean energy.

    Using more renewables – especially solar power – to drive food systems would reduce food losses, ensure year-round availability and affordability of healthy foods, and improve productivity, income and resilience among farmers, food processors and other small enterprises, the coalition added.

    In an interview with Climate Home News at the forum, Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA) – a body representing private-sector developers of small-scale, off-grid electricity systems across the continent – said its members are starting to recognise this interdependence and are increasingly considering businesses that combine energy with agricultural activities.

      This, Niyi-Afuye added, could lead to greater supply and use of clean power for key processes like irrigation, food processing and storage, creating new sources of revenue for both sectors.

      CHN: Conversations at the Africa Food Systems Forum highlighted how organisations working in energy and agriculture often operate in silos. What has hampered their collaboration, and how has that affected Africa’s economic development?

      A: Most mini-grid companies in Africa were primarily incentivised to achieve connections. If you look at some ongoing projects, you see a cost-per-connection model [of revenue]. When a subsidy is tied to achieving a connection, regardless of whether it is a productive connection, you might not notice the problem until five years down the line, when you realise the cash flows are not what you projected.

      Despite African walkout, fractious land COP ends without drought deal

      So now we’re in a “come-to-Jesus moment” as an industry, where we’re righting the wrongs and adjusting our business models to make sure companies do not go bust and there is some level of sustainability over the long term.

      The saying is not wrong that we’ve been working in our own silos because we’ve focused on the smaller things instead of the helicopter view. There needs to be cross-pollination [between the energy and agriculture sectors] because, if we are thinking about industrialisation, energy is a key driver of industrialisation. We will not achieve that if we’re not in the room and part of those conversations.

      CHN: Productive use of energy is intended to ensure electricity access goes beyond lighting homes to improving livelihoods, creating jobs and powering equipment. But what happens when farmers cannot afford the equipment they need to do that? How can energy, agriculture and equipment players work together to make the transition more accessible?

      A: That’s why we’re having conversations with companies set up to de-risk the agriculture sector. By leveraging that connection, we’re able to aggregate potential energy needs and develop instruments that make equipment more affordable through bulk procurement.

      We can have arrangements that make it easier for farmers and food producers to lease equipment and eventually own it over a period. There’s no real pressure to recover the capital very quickly because you’re looking at scale.

      Rice farmer Danjuma Okuwa adjusts his newly installed electric rice milling machine at his compound in Rukubi, Nasarawa, Nigeria, September 27, 2022. (Thomson Reuters Foundation/Afolabi Sotunde)

      Rice farmer Danjuma Okuwa adjusts his newly installed electric rice milling machine at his compound in Rukubi, Nasarawa, Nigeria, September 27, 2022. (Thomson Reuters Foundation/Afolabi Sotunde)

      There is a whole lot across the agricultural value chain that needs energy, from farming and harvesting to food processing and value-addition. We need to understand the energy needs across the value chain and bring our members in to provide solutions.

      Developers do not necessarily need to provide every productive-use solution themselves. They can partner with equipment suppliers, financiers, agribusinesses and other service providers to enable customers to use electricity productively. The objective is simple: do not just electrify communities; enable economic activity that uses that electricity.

      CHN: When Africa’s industrialisation is discussed, you hear things like renewables cannot provide enough baseload, while some food processors are sceptical about switching to renewable energy because of these concerns about reliability. What is your response?

      A: It’s not a controversial statement to say that a typical baseload is usually from the grid, and it’s usually from multiple sources including renewable energy. For large-scale operations, we can look at blending multiple sources of energy. But how do we solve the problem of a mid-sized farmer? We can solve it with a mini-grid using renewable energy.

      Comment: Every country needs a model to help optimise its energy transition

      If you go to a small farmer in a rural area, they don’t care about what source of energy they’re getting. They just want something that can help them get from A to B. If you look at the direct energy needs of farmers and food processors, I’m sure 90 percent of their consumption can be solved by renewable energy. Let’s start with that problem first. Then, as they scale, they might need to ramp up, and we can start talking about a bigger baseload.

      CHN: How much agricultural value is lost because farmers and food businesses lack reliable, affordable electricity?

      A: If you look at, for example, the fact that we need to maybe plant tomatoes or strawberries in Jos before it gets to Lagos [Nigeria], which most likely is by road, I can assure you that a good chunk, if not stored properly, would be bad by then. So the fact that we do not have energy is in itself a lost opportunity to maximise the potential of the agriculture sector. So until we’ve solved the energy problem, we will not salvage waste – and for me that is a lost opportunity.

      CHN: AGRA, an institution focused on scaling agricultural innovations to help smallholder farmers, estimates a massive shortfall between current investments in the continent’s food systems and what is actually needed to build a resilient, profitable agricultural economy – to the tune of $180 billion per year. Can integrating energy into food systems help bridge that gap?

      A: Yes – if energy can help unlock the potential to earn more money, investors will follow the money. Investments go where there is certainty, and until there is certainty around cash flow and revenue, investment will be limited.

      My vision is to see more Power Purchase Agreements (PPAs) being signed between energy players and the agriculture sector. We can start by getting people into the room, understanding their pain points, crafting a framework and documentation that works for both parties, and then seeing deals happen.

      This interview was shortened and edited for clarity.

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      Human security relies on adapting to the world’s new climate reality

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      Cristina Rumbaitis del Rio is a senior advisor on adaptation and resilience with the United Nations Foundation and Mattias Söderberg is global climate lead at Danish NGO DanChurchAid.

      Recent extreme events – from wildfires and heatwaves in Europe to flash flooding following a glacier collapse in Nepal – have shocked and devastated communities, bringing years of warnings about such climate impacts to the doorstep of communities around the world.

      One thing is certain: the new climate reality is here – and the adaptation strategies designed for yesterday’s world are no longer sufficient.

      Attribution science has since shown that the hotter and more frequent heatwaves we’re experiencing around the world would have been virtually impossible without today’s high concentrations of greenhouse gases in the atmosphere. Climate shocks are now so severe that they reverberate through supply chains, food and water systems, financial markets and the movement of people.

        They must be a catalyst for a new way of thinking about adaptation and resilience, and how we finance solutions that work. A failure to invest in adaptation in one region can create costs far beyond it, which is why the concept of shared resilience is critical for leaders to grasp.

        Investment not charity

        At the UN General Assembly (UNGA 81) this month, leaders have an opportunity to translate today’s urgency into concrete commitments on adaptation and loss and damage finance ahead of COP31.

        Those commitments are needed to underpin global stability, shared prosperity and human security. Governments should use this moment to show what a new response looks like: finance that reaches communities faster, supports locally grounded solutions, strengthens national systems, and helps countries prepare before the next shock arrives.

        If we want sustained economic growth, food and water security, and resilient and prosperous societies across every region, adaptation must be at the heart of today’s development and security agenda. It cannot be just a future planning consideration or a narrow issue for climate ministries. Adaptation is now everyone’s business – and it must be financed fast and fair.

        UN Secretary-General António Guterres has repeatedly framed climate finance as an investment rather than charity, warning that “a world in climate chaos cannot be a world at peace” and describing human security as freedom from the chronic and sudden disruptions that climate change multiplies.

        What’s more, adaptation delivers a real return-on-investment, with researchers estimating that every dollar invested produces $10 in benefits, saving lives, protecting livelihoods, and reducing the costs of future disasters.

        Hitting adaptation limits

        The urgency to scale adaptation systematically is growing. The newly released “Limiting Overshoot” report from the UN Environment Programme (UNEP) confirms what scientists have long warned: exceeding global warming of 1.5C is now unavoidable under current policies. Yet, how high temperatures rise – and how long the world remains above the 1.5C threshold – will determine whether communities, economies and entire ecosystems can keep pace.

        There are limits to adaptation. When we breach those limits, lives and livelihoods are lost, and people and ecosystems suffer greatly. We cannot simply build yesterday’s infrastructure a little stronger and assume it will be enough.

        Nepal flood destruction shows “limits to adaptation”, scientists say

        We need to fundamentally change the systems that determine how societies anticipate, absorb and recover from both immediate and evolving non-linear climate shocks. This includes transforming physical systems, such as infrastructure, and the governance systems that affect where and how we live to how we maintain our health and wellbeing.

        Finance today is nowhere near the scale of the challenge.

        The UNEP “Adaptation Gap Report 2025” estimates the shortfall in adaptation finance in developing countries at $284 billion–$339 billion a year – roughly 12 to 14 times current international public flows of around $26 billion. That gap is a development, economic and human security problem, especially for the most vulnerable populations who have contributed the least to causing the climate crisis.

        Building resilience into financial systems

        There are already signs of what a more systemic adaptation response could look like. Communities around the world are delivering practical solutions at local level, even as adaptation finance remains notoriously, and appallingly, difficult to access. Cyclone-resistant homes, local forecasting capacities, drought-resistant crops, heat insurance for pregnant informal workers and mangrove restoration are rooted in local knowledge and lived experience, while delivering benefits far beyond the communities where they originate from.

        But local innovation alone is not enough; the systems around it need to be resilient too.

        Jamaica offers one example. The country has built a multi-layered disaster-risk financing framework, including a catastrophe bond and contingency funds, through sustained fiscal discipline and proactive investment. Its debt-to-GDP ratio fell from around 147% in 2012 to around 62% in 202-25. That groundwork matters when disaster strikes.

        Hurricane Melissa’s destruction shows need for climate resilience push

        Following Hurricane Melissa, Jamaica was able to secure billions of dollars in reconstruction financing from multilateral banks – finance that might otherwise have been much harder to access. The lesson is clear: resilience can be built into the financial architecture of a country before a crisis arrives. That is the shift we now need to make at scale.

        The foundations already exist – in Kingston’s fiscal reforms, in early-warning systems from the Sahel to the Pacific, and in every community that adapted before disaster struck. What is still missing is the political will, and the finance, to take what works and put it to work everywhere, at the speed our world’s new climate reality demands.

        To hear more on this issue from high-level officials and experts, sign up for this event during Climate Week NYC, at 8am EDT on September 24 (in person or online), moderated by Climate Home News Editor Megan Rowling: Adapting to the New Climate Reality: Why Accelerating Impacts Demand New Responses.

        The post Human security relies on adapting to the world’s new climate reality appeared first on Climate Home News.

        Human security relies on adapting to the world’s new climate reality

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