4 SEPTEMBER 2025

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

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FOSSIL FUEL LOBBY SICS NEWS CORP ONTO CEF, FINDS REDS UNDER OUR BEDS

You know you are having an impact when News Corp – certain parts of which have been the mouthpiece of the fossil fuel and mining lobby since their 2010s campaign to kill the resources superprofits tax and ETS – goes in for a beat-up. 

This was the case last week with the publication on Sky News online of the story Climate Energy Finance report circulated to Albanese government ministers by think tank with connections to Chinese government. Straight to the pool room!

This story made a change from our usual role as an independent expert commentator on Sky News TV, for example here and here and here and here and here and here and here and here...

Big thanks to Sky online for highlighting CEF's new report calling for the federal government to cap the multibillion dollar taxpayer-funded diesel fossil Fuel Tax Credit Scheme, a top 20 Budget expense which has slugged Australians  $122.7bn since inception. This handout incentivises big miners – including foreign coal majors – to keep burning billions of litres of high-emissions diesel fuel every year even as it lines their coffers with public money. 

The Sky story is eerily in alignment with the position of chief fossil fuel lobby group the Minerals Council of Australia and its partner-in-crime the gas cartel peak body Energy Producers Australia, who have mounted a campaign to ensure that the firehose of diesel cash that pays miners to pollute is maintained in perpetuity. The Sky article has these vested interests’ fingerprints all over it. 

The Sky reporter is correct to say CEF circulated our new report to government ministers and crossbenchers. This traction seems to have greatly displeased the coal and mining barons sloshing around in diesel credits thanks to the government’s unsustainable largesse. 

Our report proposed that major mining companies who currently rake in hundreds of millions dollars of credits each year, including iron ore and coal giants like BHP (who topped the table, pocketing $600m in 2024), Rio, Fortescue, Glencore, Whitehaven, Peabody and Anglo American, be required to invest credits above a $50m annual cap into diesel replacement – e.g. via battery electric haulage trucks, clean energy infrastructure etc. – or forgo the cash. Iron ore giant Fortescue, one of the Scheme’s biggest beneficiaries, publicly backed our report as it breaks with the pack to lead on efforts to electrify and decarbonise. 

Our proposal would unlock over $13.6bn of clean investment by 2030, leave farmers, road transport and SMEs completely unaffected, and would be revenue neutral for the federal budget.

The Sky News cub reporter assigned the story and those pulling the strings might want to actually read the CEF report before misrepresenting it. While the story led with a claim that our proposal would cost firms “hundreds of millions of dollars”, the fact is our proposed reforms would not cost the 15 mining firms impacted (those who claim above $50m per year) one cent. 

Rather, CEF's Transition Tax Credit proposal is designed to encourage them to accelerate decarbonisation, and provide them the investment incentive to do so, also building Australia’s energy independence by freeing us from reliance on $50-60bn per year of Middle East diesel oil imports.

Somehow, the incoherent mishmash of a story segued into Sinophobia with a set of baseless allegations that CEF is a front for the Chinese government by association with our “China-linked” partners. 

As to "CEF having partners tied to the Chinese government", we are proud to work with the Australia-China Relations Institute, UTS, along with our many other academic partners like UNSW, Macquarie University and the ANU Crawford School of Public Policy.

And just to set the writer’s mind at ease, we can also confirm that unlike BHP and Rio Tinto, CEF does not receive funding from the Chinese government – or from any fossil fuel vested interests, which distinguishes us from the vociferous lobby and its special pleading. 

The Sky article willfully distorts the China decarbonisation picture, referencing China's emissions profile. While China’s emissions skyrocketed in the last two decades due to its rapid economic growth and industrialisation, they most likely peaked back in March 2024, with CY2025 to-date emissions down 1.6% yoy – six years ahead of China's Paris Agreement commitments. This peak is likely to be followed by a plateau, then a decline, as the ABC correctly reports, critically important for global efforts to address climate change. 

We remain stunned by the fact that China installed a world record 371GW of renewable energy in CY2024  – a fact also cited by Sky, apparently oblivious to its significance – installing every week what Australia as an aspiring Renewable Energy Superpower did in the entire year. This trend is accelerating.

The reporter forgot to mention we circulated the report not only to government ministers and crossbenchers but to firms like BHP, Rio Tinto, Fortescue and Hancock Iron Ore  – each of whom derive the majority of their revenues from Chinese government-linked State Owned Enterprises (ironically, unlike us).

We also released our report publicly and widely to the media, where it was exceptionally well received, including (but not limited to) in a feature entirely focussed on the report in AFR, in an op ed on Pearls & Irritations republished from Renew Economy, a story in the Climate Change Authority’s newsletter – and on Sky News TV, which kindly featured us live discussing the report. 

The distinguished policy journal Pearls & Irritations is so irritated by the story’s “McCarthyism for the climate age, where any policy that trims fossil profits gets recast as Beijing’s master plan” that it has today published a brilliant demolition.

Have a read of that, and in the meantime we invite interested parties to review the comprehensive, publicly available information about CEF and our work on our website to verify for themselves our commitment to independent, objective, evidence-based policy analysis entirely free of influence.

Our diesel credits report in the Climate Change Authority newsletter.

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WE WON’T STOP TALKING ABOUT CHINA FOR GOOD REASON

Our China analyst Caroline Wang’s China Monthly Energy Update released last week demonstrates yet again the continual acceleration of decarbonisation momentum in the world’s great clean energy superpower. See the highlights below, with the full report here:

• Record hottest July: temperature hit average 23.6°C, driving +8.6% electricity demand 

• Solar generation +42% yoy in July; wind +15.2%, thermal -0.8%

• Renewables now meeting structural demand growth

• 42% of electricity zero-emissions (Jan–Jul 2025); non-fossil capacity >60% 

• 35.2% of large-scale industrial power from clean sources 

• Coal continues structural decline: coal plant utilisation 44.8%, coal output -3.8% 

• Energy storage surges: 94.9GW / 222GWh installed by mid-2025, +29% vs end-2024; lithium-ion tech makes up 96.4% 

• Renewable energy quotas mandated for steel, cement, polysilicon, data centres 

• CO₂ emissions -1% in H1 2025; record solar growth supports trend 

• Iron ore imports -2.3%, av. price -16% yoy; major risk to Australia’s economy.

While national electricity demand reached a record high in July, up 8.6% yoy due to record-breaking heat, solar and wind power generation rose 42% and 15.2% yoy respectively, as coal power generation dropped by 0.8%. This is highly significant: it confirms clean power deployment has reached a level where it can meet the structural growth in China’s electricity demand. 

Record clean energy growth has enabled a 1% yoy fall in China’s emissions in the first half of 2025, extending a declining trend that started in March 2024 – directionally promising and critical for global efforts to address climate change (see chart below from Carbon Brief’s recent analysis).

Of note for Australian policymakers, China’s iron ore imports were down 2.3% January-July 2025 yoy. We saw this reflected domestically in a 41% fall in profits reported by iron ore major Fortescue on lower prices for its ore as Chinese demand weakens.

85% of Australia's iron ore exports – Australia’s largest and most valuable commodity export – go to China.  China’s declining iron ore imports are a major threat to the Australian economy.

China’s steel output has plateaued at ~1 billion tonnes for five years, and new policies to cut overcapacity point to weaker demand ahead. At the same time, Beijing is securing alternative supply through equity stakes in projects like Simandou in Guinea – the world’s largest known undeveloped reserve of high-grade iron ore – which will help it to sharply reduce reliance on Australian ore.  The mine is expected to produce an annual output of 120 million tons, accounting for 10% of global seaborne iron ore trade and positioning Guinea as the third largest iron ore exporter around the globe. 

For a small economy so exposed to this single commodity, and with China set on reducing reliance on Australian iron ore, the shock to Australia’s economy and prosperity could well be severe if Australia fails to urgently build globally competitive, value-adding industries, such as green iron. 

Key to this will be strategic partnerships with world-class private Chinese clean tech and energy firms, which requires a welcoming policy approach to investment from China that appropriately weighs opportunity against risk to leverage our #1 trade relationship in the national interest, as we work with our partners to decarbonise the global steel chain.

PM Albanese’s commitment to the establishment of a Policy Dialogue on Steel Decarbonisation on his recent trip to meet senior officials in Beijing, flanked by our iron ore leaders, needs to materialise into concrete policy action. 

>> Standby for Caroline’s new report next month on overseas foreign direct investment by China into cleantech worldwide, updating our 2024 report. It shows investment around the world and especially the global south surging, but investment into Australia falling off a cliff in 2024. We reveal why this matters, why it is an urgent wake-up call to policymakers and the federal government, and what Australia needs to do.

>> Hear Tim Buckley in an ABC Radio National Rear Vision feature on the potential for Australia to pivot to green iron, alongside other experts such as The Superpower Institute’s Rod Sims.

>> See Tim’s commentary in the AFR on South Korean company POSCO’s plan to use methane to make green iron in WA.

>> Read Caroline’s commentary in the SCMP on China’s global investments into cleantech as the US vacates the space.

>> Read Tim’s LinkedIn post on China’s offshore wind leadership. China has now installed more than half the world's offshore wind turbines, as here, a range of offshore wind proposals have been withdrawn, most recently the Equinor/Oceanex’ A$10bn 2GW NSW Novocastrian Offshore Wind Farm.

>> See the new briefing paper Power Shift: The US, China And The Race To Net Zero from our partners at the Climate Council, which finds that as the Trump administration retreats, China advances to establish itself as a clean energy powerhouse in the context of a world rapidly shifting to renewables.

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MASSIVE DARWIN METHANE LEAK A SYMPTOM OF REGULATORY CAPTURE OF GOVT BY GAS CARTEL

Santos and ConocoPhillips have engaged in a Darwin methane leak cover up for over a decade, assisted by the captured regulators who yet again have failed to hold the gas cartel to account, as reported by the ABC. 

We say it’s time for Treasurer Jim Chalmers to give this regulatory oversight failure serious consideration when considering the bid by state owned foreign interest and competitor to Australia Abu Dhabi National Oil Company (ADNOC) to take control of the strategic energy infrastructure operated by Santos. 

Confidential documents leaked to the ABC and correspondence obtained via FOI by the Environment Centre NT, reveal a design fault in the DLNG tank has caused a major ongoing methane leak that is set to continue for decades to come. The NT EPA, CSIRO, Clean Energy Regulator and NOPSEMA are all complicit in ignoring and covering up the leak, which has persisted since the facility was commissioned nearly 20 years ago 2006.

Methane has a global warming potential that is ~80 times greater than CO2 over a 20 year timeframe. Effectively monitoring, measuring and reducing these emissions is critical to our climate goals. 

Kudos to Kirsty Howey of the Environment Centre NT for helping expose this profound negligence. She says the handling of the leak represents a “national scandal”:  “What we have here is a cover-up at every conceivable scale, by ConocoPhillips, by Santos and by a range of regulators. To know that there has been methane leaking from the facility in huge quantities, and the risk that that could pose in the event of an explosion, let alone the climate impacts, is pretty shocking”.

Rod Sims, chair of The Superpower Institute, says the National Greenhouse and Energy Reporting Scheme (NGERS) under which Santos is required to report emissions is flawed because Santos will be reporting estimates based on “default” formulas that do not take account of the leak at DLNG. Sims says it is “absolutely crucial” to start forcing companies like Santos to effectively measure, control and publicly report fugitive methane.

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A STRONG 2035 TARGET KEY TO DRIVING EMISSIONS REDUCTION AT LEAST COST

The above debacle highlights the need for regulatory rigour combined with strong, ambitious and credible emissions reduction targets if Australia is to play its part in mitigating climate change and accelerate decarbonisation. 

On preliminary June 2025 quarter figures released by DCCEEW, Australia is largely on track for its current target of 43% emissions reduction by 2030 from the peak year of 2005, with national emissions down 2.4% yoy. National emissions are preliminarily estimated to be 436 Mt CO2 equivalent in the year to June 2025, driven by decreases across all sectors for a 29% reduction since 2005.

We note that this fall is driven primarily by Land Use, Land-Use Change, and Forestry (LULUCF) accounting – cherry picking a record high baseline of record high land clearing from which to measure subsequent emissions reductions.

With Australia due to publish its new 2035 emissions reduction target ahead of the UN Climate Summit in November, reports, including in the AFR, suggest the Albanese government could hedge its bets by declaring a target range rather than a single number.

The new Businessfor75 group – which includes Australian leaders like Atlassian, Canva Fortescue, IKEA and Future Group – has published new modelling that argues a 75% target will be a lower-cost pathway to net zero by 2050 than a target of 65%. Modelling conducted by Deloitte argues that such a target would reduce the overall cost of reaching net zero by 2050, relative to a 65% target, by bringing forward investment in critical industries and technologies. The Deloitte work projects that under a 75% scenario compared to 65%, GDP would be $227bn greater by 2035 growing to $490bn by 2050, with export revenues $190bn higher by 2050.

Sign the open letter calling for 75% by 2035 at businessfor75.com.au  No surprise Climate Energy Finance has already signed on.

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Our previous newsletters covering major energy news can be accessed here. 

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AJ for Tim, Matt, Caroline and Fatima

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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.