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The World Bank has officially expanded its mission to include climate change, while pushing ahead with reforms that could unlock additional funding and cheaper loans for green projects.

In his first major speech since taking office, President Ajay Banga said a set of measures to stretch its balance sheet could allow the bank to increase lending by up to $15.7 billion a year.

The extra funding would support the implementation of the bank’s new vision statement approved by its governing body on Thursday.

The historical objective to “end poverty” should now be achieved “on a livable planet”. The new mission will give the lender the formal mandate to tackle a whole range of global challenges, among which climate change is seen as the most urgent one.

Banga said this will widen the aperture through which the bank looks at its task in the future. “If you can’t breathe and cannot drink clean water, there is little point in eradicating poverty,” he added.

Year-long reforms

Announced at the lender’s annual meetings in Marrakech, Morocco, the changes come a year after a group of its biggest shareholders, led by the United States and Germany, called for its fundamental shake-up to deliver more climate finance.

The overhaul quickly picked up pace. Former chief David Malpass resigned early, after sparking an outcry with climate sceptic comments, and was replaced by Banga, a former Mastercard CEO, who promised far-reaching reforms.

Banga is seeking to create a “better and bigger” bank capable of plugging a few more of the huge gaps in the provision of climate finance to developing countries.

But a lack of appetite to inject fresh funds into its coffers directed the focus on financial tweaks to make the existing capital go further. The reforms mainly concern the International Bank for Reconstruction and Development (IBRD), the lending arm for middle-income countries.

Accounting tweaks

The first concrete step came in April when the bank lowered its equity-to-loan ratio from 20% to 19%, freeing up $4 billion a year.

The lender is also creating a programme of guarantees backed by shareholders, which would step in to cover potential losses if borrowers cannot repay their loans. The measure would offload some of the risk currently shouldered by the World Bank to its donors, allowing the bank to channel those reserves into more new lending.

Another option under development is the launch of a hybrid capital mechanism, which allows shareholders to inject new funds by investing in special bonds issued by the World Bank.

US Treasury secretary Janet Yellen at the World Bank annual meetings in Marrakech. Photo: World Bank / Franz Mahr

Taken together, this suite of tools could boost the bank’s lending capacity by $157 billion over the next decade, Banga said on Friday.

He added that the plans have been “met with enthusiasm and generosity”. But, crucially, their potential will only be realised if shareholders fork out the money.

Saudi Arabia, Russia urge World Bank to keep funding fossil fuels

The US government favours the guarantees plan and wants Congress to approve $2.1 billion in new funding that could unlock $25 billion in new loans. Germany has become the first country to pledge 305 million euros ($321 million) of “hybrid capital”.

Cheaper energy loans

Another element of Banga’s blueprint is the extension to middle-income countries of the cheap loans that are currently exclusively offered to low-income ones. The concessional resources currently available “are insufficient to deliver on the new vision and mission”, a paper outlining the bank’s reforms said.

The rollout of clean energy in high-emitting countries is one of the primary areas the lender would be targeting with these measures.

“We’re investigating if we can reduce interest rates to incentivize exiting from coal as part of energy transitions,” said Banga, “and find ways to encourage a renewable energy transition by increasing concessional finance in the mix.”

A thermo-solar power plant supported by the World Bank. Photo: Dana Smillie / World Bank

Danny Scull, an analyst at E3G, said this is a welcome step as incentivising countries like India and Brazil to take out cheaper loans for climate action will benefit the whole world.

Amid all the optimism, the World Bank chief added words of caution on how far his organisation can go without external help.

An influential panel of experts commissioned by the G20 said in July that development banks need to triple their lending levels by 2030 if they want to make a serious dent in the trillions of dollars of climate finance needed by developing countries.

Appeals for more capital

“The World Bank is merely an instrument that reflects the ambition of our shareholders,” said Banga, “the progress we aspire to achieve requires our resources and capital to be commensurate with our vision.” In other words, governments need to inject more money into the bank to fulfill this new mission.

But support for a direct capital increase is limited. The UK is the only major Western country in favour of the idea, which is strongly championed by developing nations, China and India above all.

World Bank targets dirty subsidies to fund climate action

For the US and Japan – the bank’s biggest shareholders – these discussions prompt a  headache. They would need to contribute most to a capital increase, if they are to avoid their percentage ownership of the bank being watered down, perhaps as the share of geopolitical rival China rises.

Private sector engagement

Among rich countries, the preferred solution is to get the private sector to stump up more money.

Banga agrees, saying the lender needs “the scale, resources, and ingenuity of the private sector”. But he also acknowledged that “meaningful, sustainable progress has evaded us” on that front.

To change that equation the World Bank has set up a forum with a group of CEOs from some of the world’s biggest companies.

Banga said the initiative is initially focused on increasing private investment in renewable energy and the energy transition in developing countries.

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EU carbon credits could supercharge world’s clean cooking push, France says

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The European Union’s plan to use international carbon credits to help meet its 2040 climate target could provide a “super solution” to accelerate the rollout of cleaner cooking technologies across the Global South, according to France’s top climate envoy .

With the bloc set to become a “big investor” in carbon credits as a result of its new climate law, efforts to replace polluting cooking stoves with cleaner alternatives could be scaled up, French climate ambassador Benoît Faraco told a summit on clean cooking hosted by the International Energy Agency (IEA).

Faraco said he had discussed that possibility with French fossil fuel giant TotalEnergies, which is involved in clean cooking offsetting programmes in Africa and has major plans to expand the adoption of liquefied petroleum gas (LPG) for use in cookstoves in developing countries.

Controversial carbon credits

Starting in 2036, the EU will be allowed to count “high-quality” international carbon credits generated by partner countries under Article 6 of the Paris Agreement towards up to 5% of the emissions reductions required to meet its 2040 target of cutting greenhouse gas emissions by 90%. Several climate experts and activists accused the bloc of watering down its commitments by including carbon credits in its climate target for the first time.

The amended climate law adopted in early February says the credits will need to follow “robust safeguards” and “ensure environmental integrity”. The European Commission and its member states have yet to determine which types of credits would qualify or how they would be sourced.

But a French diplomatic source, speaking on condition of anonymity, told Climate Home News that clean cooking should be considered among the sectors to be supported through Article 6 funding, adding that France was willing to engage with its partners on the topic.

    Clean cooking credits have regularly faced significant criticism from researchers and campaigners who argue that climate benefits are often exaggerated and weak monitoring can undermine claims of real emission reductions.

    “There is a significant risk in trading credits that have repeatedly failed to deliver on their promises, which has been a particular issue with cookstove projects,” said Benja Faecks, an expert at Brussels-based NGO Carbon Market Watch (CMW), adding that it was “far too early” for France to make recommendations on specific credit types.

    The French diplomatic source told Climate Home News that France will continue to advocate for the EU to forge partnerships with countries to develop a high-quality carbon credits supply chain.

    Total’s cooking gas expansion

    Speaking at the IEA summit held in Paris late last month, Faraco said he had discussed the use of carbon credits to fund clean cooking initiatives with TotalEnergies a few days earlier when he joined the French multinational on a visit to deliver LPG cooking units.

    TotalEnergies says it is investing over $400 million in LPG infrastructure – including canister storage and filling stations – to give 100 million people in Africa and India access to cleaner cooking alternatives to wood and charcoal.

    Jayanty Pathinera, 78, cooks rice with firewood in the fuel shortage at her house at a residential area for low-income, amid the country’s economic crisis, in Colombo, Sri Lanka, July 31, 2022. REUTERS/Kim Kyung-Hoon

    Jayanty Pathinera, 78, cooks rice with firewood in the fuel shortage at her house at a residential area for low-income, amid the country’s economic crisis, in Colombo, Sri Lanka, July 31, 2022. REUTERS/Kim Kyung-Hoon

    But while the company promotes the programme as a win for public health and the climate, it also stands to benefit commercially: the rollout would create a vast new market to absorb the growing volumes of oil and gas the company wants to produce across Africa.

    In Uganda, where TotalEnergies is leading the development of a major and controversial oil drilling project on the shores of Lake Albert, the French firm says it also provides “affordable” LPG cooking solutions to local communities aiming to avoid “critical deforestation”.

    Campaigners have said that gas is not clean nor affordable and pushing its adoption for cooking would lock vulnerable communities into a fossil fuel system. Faecks from CMW said the distribution of LPG cookstoves “very much suits Total’s interests”.

    TotalEnergies did not immediately respond to a request for comment.

    Major carbon market player

    The French company has long been involved in carbon markets and, in 2025, spent $73 million to buy carbon credits used to offset, on paper, the greenhouse gas emissions caused by its oil and gas operations.

    Last year, it announced that it had partnered with a carbon credit developer to distribute 200,000 cookstoves to households in Rwanda that it said would prevent the emission of more than 2.5 million tons of carbon dioxide over the next 10 years. TotalEnergies will acquire the credits produced by the project and use them from 2030 to offset some of its direct emissions.

    “Clean cooking contributes to long-term social, economic and human development in a more sustainable way,” Arnaud Le Foll, senior vice-president new business and carbon neutrality at TotalEnergies, said at the time.

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    Explainer: Will AI data centres make or break the energy transition?

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    For tech entrepreneur Elon Musk, the answer to the rocketing energy needs of artificial intelligence (AI) data centres is to launch them into space, where they could tap limitless energy from the sun. But until that happens, the places on Earth where these number-crunching mega-hubs are located face big spikes in electricity demand to run them.

    In the US, this has sparked fears of higher energy prices for consumers. To allay those concerns, President Donald Trump will reportedly convene big tech firms this week to sign a pledge to provide or pay for the extra energy supplies they will need as their AI data centres expand.

    According to the International Energy Agency (IEA), data centres accounted for 1.5% of electricity demand worldwide in 2024 – a share set to rise to about 3% by 2030. Overall, data centre demand is expected to more than double to about 945 terawatt-hours (TWh) by then, which is slightly above the electricity consumption of Japan today.

    AI data centres, where AI models are trained and deployed, put far more strain on power supplies than traditional data centres, which each use between 10 and 25 megawatts (MW). In comparison, demand from a “hyperscale” AI centre can exceed 100 MW at any given time, which if running at full capacity could consume as much electricity in a year as 100,000 households.

    Data-centre electricity consumption in household electricity consumption equivalents (million households), 2024

    (Source: IEA, Paris, 2025, Licence: CC by 4.0)

    (Source: IEA, Paris, 2025, Licence: CC by 4.0)

    We look at where this power might come from and whether, as some warn, AI is going to blow the world’s efforts to transition away from fossil fuels out of the water.

    Why does AI need so much electricity?

    AI data centres differ in how they use electric power. In a conventional data centre, data requests from businesses, individuals and other users come in a randomised way, translating into a steady load level on the servers, with relatively little fluctuation in demand.

    But in an AI data centre, processors need to go through training or learning periods, using so-called “graphical processing units”. These are synchronised, being started up and switched off at the same time. This translates into “power bursts”, which last just a few seconds, but happen very frequently and concurrently, according to Gerhard Salge, chief technology officer at Hitachi Energy.

    “That is a different challenge than just providing the power and the energy for the conventional data centres,” he told journalists at the International Renewable Energy Agency assembly in Abu Dhabi earlier this year.

    Here, officials and business executives discussed how to meet those demand peaks, noting they cannot be dealt with just by installing huge batteries as those would wear out quickly.

    Martin Pibworth, chief executive of SSE, a Scotland-based energy firm, said AI-led demand will put pressure on the power system, but “the problem we all have is no one really knows the pace and trajectory of that demand lift”. In the UK, the government’s Clean Power Plan will be needed to make sure electricity operators can meet demand from AI and other data centres as more come online, he added.

      In the US, meanwhile, the Trump administration is eager to ensure that communities that are home to data centres, as well as the wider public, do not turn against the industry due to its perceived unfairly high use of energy and water.

      Ahead of a meeting scheduled on March 4, where US tech titans are due to sign a pledge on powering their own data centres, White House spokesperson Taylor Rogers told CNBC: “Under this bold initiative, these massive companies will build, bring, or buy their own power supply for new AI data centres, ensuring that Americans’ electricity bills will not increase as demand grows.”

      Will electricity for data centres and AI come from clean or dirty sources of energy?

      The answer to this question is key to how countries tackle climate change, as it will affect their energy mix, how electricity is produced and distributed, and therefore the trajectory of their greenhouse gas emissions. Decisions made by governments and businesses will shape how the AI industry powers the technology on which it relies.

      Under pro-fossil fuel Trump, the US has walked away from policy support for clean energy, meaning data centre operators can choose their energy sources freely. In January, data from Global Energy Monitor (GEM) showed the US now has the most gas-fired power capacity in development, surpassing China and accounting for nearly a quarter of the world’s total.

      More than one-third of this capacity is set to directly power data centres on-site, in hotspots like Texas, and many more grid-connected gas-fired projects are planned to meet an expected increase in energy demand from AI, GEM said.

      On the other hand, some tech companies – especially multinationals – have set goals to cut their emissions to net zero, and so are choosing to power their data centres with renewables, including in the US.

      For example, French energy giant TotalEnergies recently signed two long-term Power Purchase Agreements (PPA) to deliver 1 gigawatt (GW) of solar capacity for Google’s data centres in Texas. This followed two other PPAs with Google for 1.2 GW secured by Clearway, a California-based renewables company 50%-owned by TotalEnergies.

      Sources of global electricity generation for data centres – base case, 2020-2035

      (Source: IEA, Paris, Licence: CC by 4.0)

      (Source: IEA, Paris, Licence: CC by 4.0)

      Some countries are also moving to ensure the power needed for AI and the data centre industry is produced using clean energy.

      In Ireland, an effective ban on new data centre connections was lifted in December, provided at least 80% of the centres’ annual energy demand is met by new renewable electricity sources. The government also plans to build Green Energy Parks, where data centres can be located alongside renewables plants to avoid straining the national grid.

      Salge of Hitachi Energy said that with big investors wanting to drive investment in AI data-crunching so fast, “there is no other power generation technology than variable renewables which you can build in such a timeline” of two to three years. “Anything else will be in the 2030s and later,” he added.

      Some governments – such as Sweden’s centre-right coalition have proposed nuclear as a clean energy solution for AI data centres, saying they could fuel a “renaissance”. But building nuclear power plants requires massive investment and long timelines, while new small-scale modular reactors are not yet commercially available.

      How are power systems and regulators coping so far?

      In a February report forecasting electricity demand out to 2030, the IEA said AI and data centres are contributing to generation growth in advanced economies, which is now accelerating again after 15 years of stagnation. However, it flagged bottlenecks in connecting new data centres, because grids are not being built or improved fast enough to keep up with rising power demand, forcing big customers to wait.

      The report noted that at least 150 GW of queued data centre projects are estimated to be in the advanced stages, while one-fifth of the global data centre build-out is at risk of delay due to grid congestion.

      Comment: Using energy-hungry AI to detect climate tipping points is a paradox

      Planning, permitting and completing new grid infrastructure can take five to 15 years, whereas data centres need one to three years. Prices for key grid components have also nearly doubled over the past five years, the IEA noted.

      The European Commission, meanwhile, aims to support those operators that can save on energy use. It plans to adopt a “Data Centre Energy Efficiency Package” in April that will contain an assessment of data submitted under a reporting scheme, introduce a rating scheme for data centres in the EU, and start work on minimum performance standards.

      Can AI help to resolve the issue?

      Experts say it’s important to look at both sides of the coin, pointing to ways in which AI can contribute to more effective power grid management and integration of renewables into national power supplies.

      According to new analysis by energy think-tank Ember, AI applications such as short-term renewables forecasting, predictive maintenance, and real-time monitoring and adjustment of transmission line capacity can deliver operational improvements in power systems.

      It estimates that AI could enable Southeast Asian nations, for example, to reduce their power sector costs by $45 billion-$67 billion through to 2035, depending on how much renewable energy they deploy. Potential AI-driven efficiency gains could cut emissions by 290 million to 386 million tonnes of CO2 over the next decade in ASEAN countries, it adds.

      “While power-hungry AI might initially stress the power systems, with various powerful applications it has the potential to significantly accelerate the energy transition and offset consumed energy rapidly,” Ember data analyst Lam Pham said in a statement.

      The post Explainer: Will AI data centres make or break the energy transition? appeared first on Climate Home News.

      Explainer: Will AI data centres make or break the energy transition?

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      New Investigation Reveals Forced Labour Tied to Tuna Sold in Australia

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      A new investigative report released by Greenpeace Southeast Asia, in collaboration with the Uniting Church in Australia, Synod of Victoria and Tasmania, has uncovered disturbing links between suspected forced labour in the Indonesian tuna fishing industry and seafood sold in Australia.

      The investigation analysed testimonies from 25 fishers working on 17 Indonesian tuna fishing vessels that supply the Australian market. These vessels supply five Indonesian processing companies, which in turn export to 18 Australian seafood companies, including major brands seen on our supermarket shelves.

      The findings raise urgent questions about human rights protections at sea and the integrity of seafood supply chains reaching Australian supermarket shelves.

      The crew of an Asian-flagged tuna longliner at work during a transshipment to a carrier mothership. © Greenpeace

      What the Investigation Found

      Fishers interviewed described experiencing multiple internationally recognised indicators of forced labour.

      Of the 11 forced labour indicators identified by the International Labour Organisation, the most frequently reported were:

      • Abuse of vulnerability (56%)
      • Debt bondage (56%)
      • Deception (40%)

      The report reveals a multi-layered recruitment network in Indonesia that channels vulnerable workers from rural areas into exploitative situations. Labour brokers, known locally as calo, collaborate with vessel administrators and manage recruitment. Fishers reported being lured with promises of high salaries and advance loans, only to be charged illegal and inflated fees for travel, training and documentation.

      Diver Joel Gonzaga of the the Philippine purse seiner ‘Vergene’ at work in the international waters of high seas. © Alex Hofford / Greenpeace

      The investigation also found that labour exploitation at sea is intertwined with environmental crime. Companies allegedly pushed vessels and fishers to engage in illegal, unreported and unregulated fishing practices, including shark finning and the deployment of illegal fish aggregating devices.

      75 kilograms of shark fins from at least 42 sharks found in the freezer of the Shuen De Ching No.888. Under Taiwanese law and Pacific fishing rules, shark fins may not exceed 5% of the weight of the shark catch, and with only three shark carcasses reported in the log book, the vessel was in clear violation of both. © Paul Hilton / Greenpeace

      The link between labour abuse and environmental destruction is not accidental. It reflects an extractive system that externalises both human and ecological costs to sustain profit margins.

      Industrial fishing not only exploits vulnerable workers and undermines human rights, it also strips life from our oceans, degrading fragile ecosystems and pushing marine wildlife toward collapse.

      What Needs to Happen Now

      The report calls for urgent action from both governments and industry.

      The Indonesian Government must:

      • Enforce decent and effective work at sea policies aligned with international standards.
      • Ensure ethical recruitment practices.
      • Guarantee fair wages and protections for Indonesian fishers.

      The Australian Government must:

      • Prohibit seafood products linked to labour exploitation and forced labour from entering Australian markets.

      Seafood companies in both countries must:

      • Conduct robust human rights and environmental due diligence across their supply chains.

      These are not abstract policy fixes. They are necessary steps to prevent modern slavery at sea and to stop environmental crime from being embedded in global seafood trade.

      Environmental Justice and Ocean Protection Go Hand in Hand

      This investigation highlights something fundamental. Human rights and ocean protection are inseparable.

      Environmental justice means the fair treatment and meaningful involvement of everyone in creating a healthy environment. When workers are exploited and forced into dangerous conditions, environmental laws are often ignored too. Abuse at sea and ocean destruction are two sides of the same industrial system.

      Destructive industrial fishing methods such as longlining and bottom trawling continue to pillage and industrialise the ocean. They kill wildlife, destroy fragile habitats and undermine the resilience of marine ecosystems.

      If we want a thriving ocean, we must protect both the people who work on them and the ecosystems themselves.

      Why This Matters for Australia and the Global Ocean Treaty

      The Australian Government is on the cusp of ratifying the Global Ocean Treaty, the legal instrument allowing governments to create high seas ocean sanctuaries free from industrial fishing. Once Australia has ratified, it has the critical tool it needs to protect the ocean and safeguard beautiful and endangered species like whales, dolphins and sharks from destructive fishing methods in the high seas.

      A silky shark and other marine life. © Paul Hilton / Greenpeace

      Vast, robust ocean sanctuaries are a crucial solution to the ocean crisis. These high seas sanctuaries will provide a blue haven where wildlife can rest, recover and thrive. Greenpeace Australia Pacific is calling on the Australian government to champion multiple high sea ocean sanctuaries in our region, starting with a first generation ocean sanctuary in the South Tasman Sea between Australia and Aotearoa, free from industrial fishing, whaling and the threat of deep sea mining.

      As this investigation shows, the stakes are not only environmental, they are deeply human.

      Australia has an opportunity to lead by cleaning up seafood supply chains at home and by championing ambitious ocean protection globally by creating fully protected ocean sanctuaries. Protecting workers’ rights and protecting ocean wildlife must happen together.

      https://www.greenpeace.org.au/article/new-investigation-reveals-forced-labour-tied-to-tuna-sold-in-australia/

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