26 NOVEMBER 2025

Welcome to our news round-up. See previous issues here.

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AUS IN HOTSEAT AS COP30 PLEDGES TO TRANSITION FROM FOSSIL FUELS

As COP30 in Brazil drew to a close, Australia and dozens of other countries signed the Belem Declaration, a pledge to transition equitably from fossil fuels to clean energy alternatives consistent with limiting global warming to 1.5C. It requires wealthy and developed nations to assist emerging and developing economies to speed their transitions to renewables as the climate crisis escalates. While this falls short of a formal agreement on a phaseout of fossil fuels, as Adam Morton wrote in The Guardian: “The declaration backed by Australia explicitly acknowledged that the carbon dioxide emissions from continuing fossil fuel production, licensing, and subsidies were ‘incompatible’ with the 1.5C goal and recognised the need to ‘phase-out inefficient fossil fuel subsidies as soon as possible’.”

This escalates pressure on Australian Energy Minister Chris Bowen, who has been announced as the President (Negotiations) for COP31 next year, after Australia relinquished its bid to host the summit in Adelaide to Turkiye.

As a top 3 global fossil fuels exporter, there is nowhere to hide. The Albanese government needs to show good faith, not only in relation to international ambition, but critically, to lead by example in committing to a phase out of fossil fuel mining and export as well as policy reform to appropriately price carbon emissions. We cannot do this without making polluters pay the currently externalised and socialised costs of their carbon emissions, the key to driving the phaseout and pivoting investment into cleantech.

Time for the 2026 Safeguard Mechanism review to ratchet up the ambition, with a progressively higher carbon ACCU / SMC price and a progressively lower threshold, moving from the current limit that captures facilities emitting >100ktpa down to 25ktpa. The breadth of the SGM also needs to expand from scope 1 to include scope 2  by addressing the electricity sector, and capping and pricing thermal power plant emissions from, say, 2030 onwards. No compensation required; we paid that more than a decade ago, and we collectively pay with every year of delay.

It is past time for Treasurer Jim Chalmers to honour our Belem commitment and announce a cap and pivot on Australia’s $12bn per annum diesel fuel rebate, paid primarily to big miners who guzzle billions of litres of the imported high-emissions fuel a year. This is a massive headwind to Australian industrial decarbonisation that also undermines our energy independence by keeping us addicted to foreign oil. 

We urge the government to consider a $50m pa cap and the introduction of a Transition Tax Incentive, which would require miners to invest any credits they receive above $50m into alternatives to diesel to power their operations. This would create a tailwind to accelerate electrification and decarbonisation in our mining sector.  Fortescue supports this plan, but we need a Team Australia approach where laggards BHP and Rio Tinto – huge beneficiaries of taxpayer funds via the diesel rebate – honour their social licence to operate here as they use our public finite resources for their private gain.

See Matt Pollard's report: Transition Tax Incentive: Reforming Fuel Tax Credits into a Decarbonisation Tailwind

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NEW REPORT: THE GAS-LED WHYALLA RESCUE PROMOTED BY BLUESCOPE WOULD COST TAXPAYERS BILLIONS & UNDERMINE GREEN IRON & STEEL

Last week, CEF launched a new report on pathways to enable the transformation and decarbonisation of the Whyalla Steelworks. This is a generational opportunity, but the future of the region and South Australia currently stands at a critical juncture.

The forced administration of the Steelworks in February 2025 provides Australia a critical nation-building opportunity to pivot from fossil fuel-based steel to a model in which SA’s abundant, world-leading renewables and magnetite resources are deployed to produce green iron and steel in a global marketplace undergoing a nascent but momentous and inevitable shift to a future of zero-emissions iron and steelmaking.

However, there is growing concern and risk that the $2.4bn SA/Federal rescue package for the Steelworks will be directed into a fossil gas-led transition. This has been amplified by BlueScope – Australia’s largest steelmaker and leader of an international consortium bidding for Whyalla – and Manufacturing Australia’s spruiking of Australian gas oligopoly rhetoric that low-cost gas is critical to securing the long-term viability of Australia’s manufacturing base, and its erroneous view that it is impossible to decarbonise industry without using methane gas a transition fuel.  

CEF’s latest report analyses the damaging budgetary and national interest impacts of a gas ‘transition phase’ for Whyalla,  a strategic misstep which risks locking in high-emission, uncompetitive fossil gas for decades. 

Gas pricing in SA makes a gas-led transition in Whyalla uneconomic. CEF estimates gas supply subsidies for a would exceed $1.7-2bn over a decade. Even this level of taxpayer subsidy would only halve the competitive gap in gas pricing between SA and other ‘direct reduced iron’ (DRI)-producing nations in the Middle East and North America. In addition, hundreds of millions in gas pipeline infrastructure spending would be required to supply even one DRI plant.

Furthermore, Santos, as the gas supplier to Whyalla, would be the principal beneficiary of these subsidies – a company that has paid zero corporate tax in the last decade on revenues of $47bn, and is a key player in domestic gas price distortion that is gutting Australian heavy industry and households. 

A gas led revitalisation of Whyalla is a significant misalignment of economic incentives with Australia’s decarbonisation and climate ambitions. CEF’s latest report outlines a pathway for Whyalla to strategically deploy strategic public capital to crowd-in investment in renewable energy at speed and scale, thereby enabling a shift to green iron and steel without navigating the challenges and risks of a fossil gas-based ‘transition’. The scale of investment required is a challenge, but the future of Whyalla lies in the ambition and strategic vision of the SA and Federal Governments. 

The potential benefits of this intervention are highly nationally significant. Beyond safeguarding the region’s steelmaking workforce, the transformation of Whyalla has substantial multiplier effects, creating massive future-facing jobs in renewable energy deployment, manufacturing, and construction that are aligned with global decarbonisation trends rather than vulnerable to them.

>>> See this latest report from CEF, led by Matt Pollard: A Strategy for Whyalla: Enabling the Transformation and Decarbonisation of the Steelworks

>>> See our media coverage including a feature based on the report in the AFR, oped in Renew Economy, as well as coverage in Michael West Media, Canberra Times and syndicated widely across AAP, The Energy, The Guardian, InDaily South Australia, AusBiz, radio interviews in ABC Adelaide, ABC North and West SA, and 5AU Around SA.

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WAKE UP CALL: SOUTH KOREA TO CUT COAL POWER BY 2040. AUSTRALIA MUST URGENTLY PIVOT TO GREEN EXPORTS

South Korea committed at the COP30 climate summit to join the Powering Past Coal Alliance (PPCA) and ending coal-fired power by 2040. This has major implications for coal-exporting Australia.

South Korea pledged not to build any new unabated coal plants as part of its membership and reaffirmed its plan to shut down 40 existing coal-fired units by 2040.

South Korea is Australia’s third largest coal market and the world’s fourth largest thermal coal import nation, importing 91Mtpa in 2024. Its decision to join the Powering Past Coal Alliance sends a strong reminder to Australia as the world's second largest exporter of thermal coal behind only Indonesia that our key trade partners are responding to the climate science and their Paris Agreement treaty obligations, meaning coal demand will decline.

The Australian Office of the Chief Economist forecasts a near 15% decline in global thermal coal demand in the three years to 2027, and Korea’s new commitment is a strong reminder that Australia’s largest four commodity exports in 2024, including thermal and coking coal, LNG and low quality, high impurity iron ore, are all terminally challenged over the coming decades. This end-game is inevitable and accelerating as the world collectively reduces its emissions, decarbonising industry and power supplies.

Australia needs to urgently pivot our export focus to low- and zero-emissions industries of the future, in particular renewables-processed green iron,  as well as green aluminium, critical minerals and lithium. This will secure our crucial commodity export revenues as we help our key trade partners jointly deliver on their decarbonisation objectives. 

For private finance to mobilise behind the massive investment opportunity to develop green commodities we need a price on carbon in international trade or domestically – a critical lever to drive capital into low-emissions tech. This is coming, as seen by the European Union’s world leading carbon border adjustment mechanism (CBAM), and China’s massive extension of their world leading national emissions trading scheme.

Australia has also made progress with the enhanced Safeguard Mechanism, but we also need an Asian CBAM as detailed in Matt Pollard’s recent report “A Price on Carbon: Building Towards an Asian CBAM.”

What is clear, is that Australia’s overdependence on fossil fuel exports must end. Failure to course-correct now and accelerate Australia’s generational opportunities, including as a world-leading green iron exporter, undermines the national interest, risking our future prosperity in a decarbonising world.

>>> See our media coverage in AFR, ABC online, 9News, The Guardian.

>>> See our media release.

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FEDERAL & STATE GOVERNMENT MUST DELIVER LONG TERM SOLUTIONS TO SECURE TOMAGO’S FUTURE

CEF joined with a coalition of unions, environment and industry groups this month to call on state and federal governments to deliver a long-term, structural solution using renewable energy to secure the future of Tomago Aluminium — the Hunter’s largest employer and one of Australia’s most important industrial assets. 

The call comes as consultation with Tomago workers about the future of the smelter closed on 21 November, and as the Tomago board led by Rio Tinto is locked in negotiations with the NSW and Federal governments. 

Reports suggest the Federal government is considering potential interventions including using Snowy Hydro to write offtake agreements with renewable energy projects and deliver long-term electricity supply to the smelter at an affordable price. 

It is essential that state and federal governments play a strong, proactive role in delivering cheap renewable energy to industry. Governments should use every tool at their disposal — including their balance sheet — to drive rapid investment in transmission, storage and generation.

Rather than relying on short-term cash handouts or bailouts, state and federal governments should focus on long-term structural solutions that secure cheap, clean power for facilities like Tomago.

>>> See the full statement here. 

>>> Hear Tim Buckley on ABC Radio National’s AM program.

>>> See our previous newsletter featuring discussion of Tomago.

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CHINA MONTHLY DATA SUMMARY

China's renewable energy capacity expansion continues, albeit at a slower pace post tariff reforms that saw a hectic first 5 months of CY2025.

Year to date to October 2025 net new capacity adds according to the China NEA:

🪨 Thermal power capacity adds are still way too high at +65GW, +54% yoy

🌊 Hydro capacity adds +8GW, -6% yoy

☢️ Nuclear capacity adds +2GW, +29% yoy

🌬️ Wind capacity (onshore and offshore) adds 70GW, +53% yoy 

☀️ Solar capacity (utility and distributed) adds 253GW, +39% yoy

Renewable Energy capacity adds of 331GW represent 83% of China's total in the first 10 months of 2025, with growth of 40% yoy.

Rho Motion highlights global YTD BESS deployments have reached 156GWh, a yoy increase of 38%. The month of October 2025 saw 12.7GWh of new BESS capacity enter operations globally, ⏫ 29% yoy. China represented over 60% of global BESS installs to-date in 2025. https://lnkd.in/gdhEBjs9

As of October 2025, China's total number of electric vehicle charging infrastructure reached 18.65 million, ⏫ 54.0% yoy. 

For the month of October 2025 total electricity demand was 858TWh, +10.4% yoy. No sign of a Chinese recession here!  Year to date, 10M CY2025 total generation was ⬆️ 5.4% yoy to 8,653TWh (thanks to EMBER for the data).

☀️ Solar was +42.3% yoy to 1,003TWh, an 11.6% share.

🌬️ Wind was +11.9% yoy to 894TWh, a 10.3% share.

🌊 Hydro was 2.5% yoy to 1,142TWh, a 13.2% share. 

🪨 Coal power generation was -0.7% yoy YTD 2025 at 4,789TWh, a still dominate 55.3% share. The average thermal power plant utilisation rate over 2025 YTD is 46.8%, a decade low. China is building idle new coal plants!

Meanwhile, it is excellent to see China's Ministry of Commerce advocating to "actively expand green trade, promote trade optimization and upgrading, to help achieve carbon peaking and carbon neutrality goals." And to "Creating a Favourable International Environment for Green Trade Development. Promote the formulation of relevant standards and international alignment and mutual recognition."

Building momentum in carbon markets and preparedness, a key preparation leading towards a China CBAM to extend and leverage the EU CBAM: "Leverage the supporting role of carbon pricing mechanisms and green certificates and green electricity. Improve and refine carbon pricing mechanisms to guide foreign trade enterprises to make good use of them to expand international markets."

Away from COP30 and treaties, pragmatism sparks clean energy boom in the global south

An excellent media report by Jo Lauder of the ABC highlights the growing outbound foreign direct investment (FDI) by China in cleantech, particularly in the Global South.

Unshackled from established fossil-fuel industries and outdated technologies, the Global South – from Nepal to Pakistan to Kazakhstan and Brazil – is starting to move faster in the renewable energy system transformation than wealthier nations such as Australia. These shifts aren't being driven by climate motives, but rather energy security and economics.

Driven by ongoing cleantech deflation and R&D progress, the world is at a tipping point where renewable energy and electric cars are becoming so affordable that countries are leapfrogging the era of fossil fuels to go straight to green solutions, according to Kingsmill Bond, an energy strategist at global think tank Ember: "A lot of the electrification stories are China-adjacent. What you're seeing — as so often in technology revolutions — is countries near the centre of change are moving quicker. We have a real story of Asian electrification going on."

In Africa, solar module imports from China are ⏫ 60% yoy in the past year, according to Ember analysis. 

In Nepal, the aim to end its dependence on imported oil via India was the catalyst for its world-leading EV boom. The Nepalese government introduced a target of having 90% of new cars sold as electric by 2030 and this year it already reached 76%. 🇳🇵 🚘 

China's rapid shift to renewables hasn't just transformed its own economy and started to eat into fossil fuel emissions at home; it's also building out that manufacturing capacity in other countries. China leads the world in cleantech RD&D, cleantech manufacturing, cleantech domestic deployments and cleantech exports. China is also starting to lead on outbound FDI.

July 2025 saw State Grid Corporation of China begin construction of a 1,468km US$3.3bn UHVDC electricity transmission project, plus converter stations at both ends in Brazil. https://lnkd.in/gaim35B2 🇨🇳 🇧🇷 ⚡ 

Oct'2025 saw China Energy International group Co., Ltd. & "Samruk Energy"​ JSC advance 300MW of solar & 500MW of wind in Kazakhstan. 🇰🇿 🌬️ ☀️

Oct'2025 saw China's CRE International & Singapore's Equator Renewables Asia announce the development of a 900MW solar & 1.2GWh BESS in Indonesia, with 400MW for export to Singapore. 🇨🇳 🇸🇬 🇮🇩 ⚡ 

Nov'2025 saw China Southern Power Grid Co. receive environmental approvals for a 1,350km, 3GW, US$1.5bn HVDC transmission line to strengthen the north-south flow of clean energy in Chile.

Climate Energy Finance's Caroline Wang 王涵 has a forthcoming report updating on our October 2024 report that highlighted >US$100bn of OFDI in cleantech by China since the start of 2023. We have tracked that a year on, this has risen to >US$175bn. 

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A QUIET WITHDRAWAL BY WHITEHAVEN COAL AT BLACKWATER SIGNALS SHIFT IN COAL’s LONG GAME 

Christopher Wright & Matt Pollard

What does it tell you about the state of metallurgical coal markets when one of the country’s most bullish miners pulls back on an approved 60 year extension?

After increasing their coal production by 60% in the last financial year, Whitehaven Coal has quietly withdrawn their EPBC application for their Blackwater North coal mine extension project. After already achieving approval from the state government, the extension project would have approved an additional 220 million tonnes of coal mining at the Queensland complex with plans to continue mining through 2085.

Whitehaven’s pause is a rare opportunity for policymakers to ensure that future coal approvals align with climate reality before another generation of emissions is locked in.

CEF has a public op ed on this wider issue pending.

Meanwhile, done in collaboration with CEF, Carbon Bridge’s Chris Wright Whitehaven Coal emissions profile presentation is available here, with a detailed report forthcoming.

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This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.