Europe is laying the foundation for renewed economic growth. Regulatory simplification is gaining traction. Public investment is accelerating in technology, energy and defense. Private capital is supplementing these efforts. These are meaningful steps, which, in the eyes of many, are long overdue and still need to gain pace. But an additional ingredient is required.  Our new research finds that closing the continent’s competitiveness gap requires Europe’s major companies to place a new emphasis on entrepreneurial courage: that is, the increased willingness to embrace uncertainty and take calculated risks in service of renewal and growth. Corporate leaders willing to make bold investments and engage in modern public-private collaborations, much like their American and Asian peers, stand to reap the rewards for acting decisively and with greater urgency.   Europe’s global competitiveness is ultimately a function of individual companies making a material difference, particularly large corporations and dynamic scale-ups. And it doesn’t require many acting boldly to have a disproportionate impact. In examining a sample representing about 15 percent of the U.S. economy, the McKinsey Global Institute found that more than two-thirds of productivity growth between 2011 and 2019 was driven by just 44 ‘standout’ companies. Meanwhile, 13 standout companies drove a similar proportion of the German sample’s productivity growth during the same period. These highly valued ‘outliers’, together with differences in growth and return on invested capital, underpin much of the valuation gap between European companies and their international peers, as highlighted in research we conducted on UK capital markets.   The status quo is not tenable.  Since the global financial crisis, Europe has endured a prolonged slump in private investment that has been especially pronounced in future-shaping industries. In the past five years alone, our analysis found that companies with headquarters in the United States have invested €2 trillion more in digital technologies such as artificial intelligence (AI) than their European peers. And in traditional manufacturing industries, China is out-investing Europe at a rate of 3:1.  > This investment gap not only stifles European economic growth, but prevents > the continent from inventing, developing and deploying the technologies it > needs to increase productivity and drive prosperity.  And the need to boost investments is growing: when the landmark Draghi report on European competitiveness was released in 2024, it estimated that an additional €800 billion needed to be mobilized annually to start closing the continent’s competitiveness gap. With the required additional investment in defense, that figure is now estimated to be €1.2 trillion annually for the next five years.  Of course, the regulatory landscape is also important. The positive news over the past year is that the European Commission has implemented dozens of initiatives, from regulatory simplification to streamlining and enhancing funding and market-creation mechanisms, as well as preparing to propose a ‘28th regime’ to make it easier for companies to scale across its 27 member states. Governments are also stepping up, with growth in strategic public investment in technology, energy and defense capabilities creating tailwinds for private investment. For instance, Germany amended its constitution to exempt defense spending above 1 percent of GDP from its debt brake and established a €500 billion fund to support infrastructure and climate-neutral investment. Similar programs are taking shape in France, Italy, the Netherlands and the Nordics.  But, while private sector activity shows some signs of acceleration, more is needed. Driving Europe’s economic vitality requires the emergence of standout companies, acting both individually and in close collaboration with the public sector. Without it, Europe risks another decade of ‘secular stagnation’: sluggish real GDP growth of around 1 percent annually as excess savings and a dearth of investment depress aggregate demand and push interest rates back to near zero.  > So, what does it take to show more entrepreneurial courage? Informed by our > global research and what we see standout firms doing, our research highlights > a range of actions leaders could explore.  One example is making broader ecosystem plays, such as semiconductor company ASML joining with the Dutch government and regional partners to launch Project Beethoven, a €2.5 billion public-private investment to ensure ASML’s continued presence and expansion of the broader microchip cluster in Eindhoven. Another is re-inventing potential stranded assets to position them for the industries of the future, illustrated by the range of European utilities converting or marketing former coal and gas power plant sites for hyperscale data centers. And a clear one is radical adoption of AI and automation technologies, which MGI’s research shows could add up to 3.4 percentage points to annual productivity growth globally through 2040.  > Europe has an opportunity to take steps to decisively alter its competitive > trajectory.  But while public sector leaders can lay the foundations necessary to accelerate investment and growth, the continent’s leading companies are distinctly positioned to amplify this and make a critical contribution to the continent’s prosperity, security and strategic autonomy. There’s growing consensus on what needs to be done. What’s now needed is a hefty dose of entrepreneurial courage to act.

KYIV — The Russian army attacked Ukraine with more than 90 killer drones in the early hours of Thursday morning, causing complete blackouts in the key industrial regions of Dnipro and Zaporizhzhia, Kyiv’s energy ministry reported. “While energy workers managed to restore power in the Zaporizhzhia region in the morning, some 800,000 households in the nearby Dnipro region were still without electricity and heating on Thursday morning,” Artem Nekrasov, acting energy minister of Ukraine, said during a morning briefing. In Dnipro, eight coal mines stopped working because of a power outage. All the miners were safely evacuated to the surface, Nekrasov added. Power outages were also reported in Chernihiv, Kyiv, Ivano-Frankivsk, Poltava and other regions. Freezing weather is coming to Ukraine over the next three days, with temperatures forecast to drop to minus 20° C during the night, when Russia often launches massive missile and drone attacks. Precipitation and cold could cause additional electricity supply disruptions due to snow accumulating on power lines, Ukrainian Prime Minister Yulia Svyrydenko said Wednesday evening. “Ukraine’s energy system is under enemy attack every day, and energy workers work in extremely difficult conditions to provide people with light and heat. Deteriorating weather conditions create additional stress on critical infrastructure. We are working to minimize the consequences of bad weather,” Svyrydenko added. Local governors in the eastern regions of Zaporizhzhia and Dnipro reported that hospitals and other critical infrastructure had to turn to emergency power supplies because of the latest Russian attack. President Volodymyr Zelenskyy thanked Ukrainian energy workers for the speedy power restoration in Zaporizhzhia, and used the opportunity to remind Kyiv’s partners around the world they need to respond “to this deliberate torment of the Ukrainian people by Russia.” “There is absolutely no military rationale in such strikes on the energy sector and infrastructure that leave people without electricity and heating in wintertime. This is Russia’s war specifically against our people, against life in Ukraine — an attempt to break Ukraine,” Zelenskyy added.

BELÉM, Brazil — The European Union is preparing to veto the final deal at this year’s climate summit if countries do not agree to stronger efforts to cut planet-warming emissions, according to four European diplomats. The negotiators said the 27 countries were united in their anger at the draft deal that the COP 30 talks’ Brazilian presidency offered Friday morning, saying it had crossed the bloc’s red lines on financing and did not reflect their push for countries to do more to slash pollution. The European Commission took the unusual step of publishing a short speech that climate chief Wopke Hoekstra gave in a closed-door meeting at noon local time Friday. The current draft deal contains “no science… no transitioning away [from fossil fuels]… But instead, weakness,” Hoekstra said. “Under no circumstances are we going to accept this… You can count on us to do our absolute utmost to deliver. Not for the EU. But for all of us.” At a coordination meeting this morning, EU ministers were asked to secure support from their governments to block the final agreement if no changes are made, the four diplomats said. “We’ve told ourselves in the past that we should have the balls to walk out if the text is not strong enough. But until today I’ve not heard us say it this loudly and as part of an actual strategy,” one of the diplomats said. The diplomat, like others in this article, was granted anonymity in order to discuss the private meetings. The divisions set up a possibility that countries could walk away from these talks without a final outcome. The Brazilian president of this year’s COP30 talks, André Aranha Corrêa do Lago, pleaded in an opening speech for countries to come together and show their support for the 2015 Paris Agreement, especially after the United States walked out of the deal and refused to send delegates to the conference in Brazil. “This cannot be an agenda that divides us,” Corrêa do Lago said. “But at the same time that we have to face the fact that the largest economy in the world has left the Paris accord, we have to remember that we all stay in because we all believe in it. We cannot be divided inside the Paris accord.” But a second European diplomat said that, in the absence of the U.S., a group of emerging economies including China, Russia, India, Brazil and South Africa, known as the BRICS, had seized the initiative to stamp down on efforts to cut emissions. “This is a BRICS COP,” the diplomat said. “They’re circling around now a text which is designed for them and they’re all now saying it’s a take-it-or-leave-it text.” Alden Meyer, a long-time COP watcher and senior associate at climate think tank E3G, said: “There’s definitely a possibility this could fall apart.” A proposed roadmap for tracking and marking national progress in transitioning off fossil fuels, backed by more than 80 countries including most of Europe, did not appear in the text. It has become one of the key asks for governments trying to enhance global progress for ditching fossil fuels that are heating the planet. But a clutch of oil-, gas- and coal-producing countries has resisted the effort, which has become the most divisive issue at the negotiations. “We can only talk about things that are in the text,” Maesela Kekana, South Africa’s lead negotiator, said in an interview. “Why are you talking about something that does not exist?” The text largely accounts for where the world is with respect to hitting national climate goals and a challenging geopolitical situation, said Li Shuo, director of the China Climate Hub at think tank Asia Society. He said that includes U.S. President Donald Trump’s threats on trade and an EU bloc whose nations are responding to domestic calls to restore industrial competitiveness. “I see the current text as actually a pretty accurate reflection of that situation,” he said, describing “the lack of ambition and the fact that many countries are having a hard time on their domestic climate push.” But for the EU and many vulnerable countries, it’s essential to leave Belém with a strategy to address the enormous gap between the world’s collective emissions-cutting efforts and the Paris Agreement targets to curb global warming. “We cannot negotiate with a text that does not include a mention of fossil fuels, a mention of a roadmap to end deforestation. We cannot take as good faith a text that fails to set a global goal on adaptation finance,” said Juan Carlos Monterrey Gómez, Panama’s lead negotiator. “It is simply so weak that it’s offensive.” The European countries were also preparing to cross their own red lines on proposals to funnel more money toward developing countries’ efforts to prepare for climate disasters. The draft text includes a commitment to triple the finance now flowing to poorer countries to help them cope with the ravages of climate change, known as adaptation finance, by 2030. That’s an unacceptable timeline, said the second European diplomat. But indicated that 2035 might be acceptable. It “goes well beyond the red lines of what most of us came in with,” said the diplomat. “The trebling is more than most donors can do, but we’re kind of over a barrel.” If the EU gets more on climate action, Hoekstra said in his speech published online, “yes you can ask the EU to move beyond its comfort zone on the financing of adaptation.”

BELÉM, Brazil — European Commission President Ursula von der Leyen said Friday that the fight against climate change was not against the fuels that cause it — only the pollution they emit. “We are not fighting fossil fuels, we are fighting the emissions from fossil fuels,” said von der Leyen at a press conference at the G20 in South Africa. The comment could undermine the EU position, just as European ministers were set to make a stand for a “roadmap” to move away from coal, oil and gas at the COP30 climate talks, taking place on the other side of the Atlantic in Brazil. A draft deal, suggested by the Brazilian presidency, contained no reference to past deals to move away from fossil fuels, nor did it have the roadmap pushed for by many EU countries, though notably not the EU itself. Overnight, 14 EU member states joined 22 other countries, many of them highly vulnerable to climate impacts, threatening to collapse the talks over the absence of fossil fuels from the deal. “We cannot support an outcome that does not include a roadmap for implementing a just, orderly, and equitable transition away from fossil fuels,” said a letter from those countries to the Brazilian organizers, seen by POLITICO. Von der Leyen emphasized Friday that the EU was not resiling from its legal climate goals. “We are staying the course,” she said. “We’re very clear that we want to reach those targets. We are well on track for the 2030 target. On the way forward we have to be adaptable and flexible. because thsi is a huge transition taht is happening. No one has done this before. So we really are in uncharted waters.” Asked about von der Leyen’s comments just as he was walking into a United Nations plenary, EU climate chief Wopke Hoekstra said: “The problem is caused by emissions, and the reality is that the dirtier the fossil fuel, the more damage they are doing.” That, he added, was why the EU was calling for greater efforts to cut planet-warming emissions at COP30. Danish Climate Minister Lars Aagaard, walking beside Hoekstra, said: “Emissions are a consequence of fossil fuels, so I find it a bit hard to see the distinction. What we need to see here is to have the emissions down. That’s what we are aiming for, that’s what we came for.” European lawmakers on the ground in Belém were more critical of von der Leyen’s words. “I believe she’s trying to be diplomatic, but one thing is very clear: We need to exit fossil fuels to lower our emissions,” said Lena Schilling, an MEP from the Greens. “Europe is fighting to increase ambition” on reducing emissions at COP30, “and that’s the goal I think von der Leyen should stand behind, like every member state,” said Mohammed Chahim, vice president of the center-left Socialists & Democrats in the European Parliament. Emissions, he added, “are fully connected to fossil fuels, so I think Europe should support the call of phasing out fossil fuels.” Noting that the focus on tackling emissions rather than their source often implies extensive use of carbon capture technology (CCS), which is as yet unavailable at scale, he referred to something Hoekstra said repeatedly at last year’s climate summit: “Like a very smart commissioner said at the previous COP, you cannot CCS yourself out of everything.”

BELÉM, Brazil — Turkey will host next year’s U.N. climate conference after Australia’s bid imploded. Turkey and Australia had faced off for more than a year over the talks’ location, an impasse that extended almost until the final day of the current climate summit in Belém, Brazil. If no resolution had emerged, next year’s summit would have defaulted to Germany, which has said it wouldn’t have time to plan the event properly. While Turkey will provide the venue for the 2026 talks, Australia will hold the presidency — and therefore the diplomacy, said Chris Bowen, Australia’s minister for climate change and energy. That means that “I would have all the powers of the COP presidency,” he said. A Turkish official, who did not give his name, said the final deal would be announced on Thursday. Turkey had proposed hosting the talks in the Mediterranean city of Antalya. It is a highly unusual arrangement for the annual climate conference, which normally has a single host and presidency. But it’s not unprecedented: In 2017, Germany hosted a Fijian-led conference. “Obviously it would be great if Australia could have it all. But we can’t have it all,” Bowen said. “It’s also a significant concession for Turkey.” He added that before the summit, separate talks will occur in the Pacific where money would be raised to help that region cope with climate change. German State Secretary Jochen Flasbarth, whose country chairs the Western Europe and Others Group from which the host of next year’s talks is due to be selected based on the rotating system of the U.N., put a positive spin on the discussions. “There was a positive spirit,” he said. “It’s something extraordinary that two countries from very different sides of the planet but being in one group reached an agreement.” But others were more candid. “It’s an ugly solution,” said a European diplomat who was granted anonymity to discuss the confidential discussions. “Turkey just wants to showboat and don’t care about content really, and Aussies do but they don’t control the event and logistics.” The new host country’s climate track record is mixed. Turkey aims to reach net-zero greenhouse gas emissions in 2053, a date chosen more for its symbolism — 600 years after the Ottoman conquest of Constantinople — than science. This year, it presented a new climate target that will see its emissions increase by around 16 percent until 2035. The country overtook Poland last year as Europe’s top coal user, and harbors ambitions of stepping up gas exploration to become a regional transit hub. Australia had secured the backing of the U.K. and some European countries, as well as the Pacific region, with which it planned to co-host the summit. But during a series of long meetings on Wednesday, Australia failed to persuade Turkey to back down. Australia had been favored to host the talks in the city of Adelaide. But on Tuesday, Prime Minister Anthony Albanese blinked, saying his country would not block Turkey as host country if Ankara were to prevail. His office later clarified the statement to indicate he meant that he expected Turkey to do the same if Australia won the competition. But by then, news stories had circulated around the world that Australia had backed down.

BERLIN — Brazilian President Luiz Inácio Lula da Silva lashed out at Friedrich Merz after Germany’s chancellor made remarks disparaging the South American country. Merz said last week that he and the national press corps had been happy to return to Germany from the Amazon city of Belém, Brazil, where they had attended this year’s U.N. climate talks. “He should have gone dancing in Pará,” Lula said about the state where Belém is situated. “He should have tasted Pará’s cuisine. Because he would have realized that Berlin doesn’t offer him 10 percent of the quality that the state of Pará offers.” At a trade conference in Berlin last week, Merz attempted to spread optimism about the struggling German economy — but put his foot in his mouth. “We live in one of the most beautiful countries in the world. Last week I asked some journalists who were with me in Brazil: Which of you would like to stay here? No one raised their hand,” Merz said upon returning from Brazil. “They were all happy that, above all, we returned from this place to Germany.” His comments sparked a backlash among Brazilian state politicians — and, according to a Spiegel report, might even jeopardize the efforts of the German delegation on the ground. “Pará opened its doors and showed the strength of a welcoming people. It is curious to see that those who contributed to global warming find the heat of the Amazon strange,” Helder Barbalho, the Pará state governor, wrote on X. Although Merz has repeatedly stressed that he wants to maintain an ambitious climate agenda and existing climate targets, his government has also relaxed the timeline for a phaseout of coal plants and is planning to construct new gas-fired power plants.

BELÉM, Brazil — United Nations climate summits have for years ended with bold promises to stave off global warming. But those commitments often fade when nations go home. Three years ago, in a resort city on the Red Sea, delegates from nearly 200 countries approved what they hailed as a historic fund to help poorer nations pay for climate damages — but it’s at risk of running dry. A year later, negotiations a few miles from Dubai’s gleaming waterfront achieved the first-ever worldwide pledge to turn away from fossil fuels — but production of oil and natural gas is still rising, a trend championed by the new administration in Washington. That legacy is casting a shadow over this year’s conference near the mouth of the Amazon River, which the host, Brazil, has dubbed a summit of truth. Days after the gathering started last week, nations were still sorting out what to do with contentious issues that have typically held up the annual negotiations. As the talks opened, Brazilian President Luiz Inácio Lula da Silva said the world must “fight” efforts to deny the reality of climate change — decades after scientists concluded that people are making the Earth hotter. That led one official to offer a grim assessment of global efforts to tackle climate change, 10 years after an earlier summit produced the sweeping Paris Agreement. “We have miserably failed to accomplish the objective of this convention, which is the stabilization of greenhouse gases in the atmosphere,” said Juan Carlos Monterrey Gómez, Panama’s climate envoy and lead negotiator, during an interview at the conference site in Belém, Brazil. “Additional promises mean nothing if you didn’t achieve or fulfill your previous promises,” he added. It hasn’t helped that the U.S. is skipping the summit for the first time, or that President Donald Trump dismisses climate change as a hoax and urged the world to abandon efforts to fix it. But Trump isn’t the only reason for stalled action. Economic uncertainty, infighting and political backsliding have stymied green measures in both North America and Europe. In other parts of the world, countries are embracing the economic opportunities that the green transition offers. Many officials in Belém point to signs that progress is underway, including the rapid growth of renewables and electric vehicles and a broader understanding of both the world’s challenges and the means to address them. “Now we talk about solar panels, electric cars, regenerative agriculture, stopping deforestation, as if we have always talked about those things,” said Ana Toni, the summit’s executive director. “Just in one decade, the topic changed totally. But we still need to speed up the process.” Still, analysts say it’s become inevitable that the world’s warming will exceed 1.5 degrees Celsius since the dawn of the industrial era, breaching the target at the heart of the Paris Agreement. With that in mind, countries are huddling at this month’s summit, known as COP30, with the hope of finding greater alignment on how to slow rising temperatures. But how credible would any promises reached in Brazil be? Here are five pledges achieved at past climate summits — and where they stand now: MOVING AWAY FROM FOSSIL FUELS The historic 2023 agreement to “transition away” from fossil fuels, made at the COP28 talks in Dubai, was the first time that nearly 200 countries agreed to wind down their use of oil, natural gas and coal. Though nonbinding, that commitment was even more striking because the talks were overseen by the chief executive of the United Arab Emirates’ state-owned oil company. Just two years later, fossil fuel consumption is on the rise, despite rapid growth of wind and solar, and many of the world’s largest oil and gas producers plan to drill even more. The United States — the world’s biggest economy, top oil and gas producer and second-largest climate polluter — is pursuing a fossil fuel renaissance while forsaking plans to shift toward renewables. The president of the Dubai summit, Sultan al-Jaber, said at a recent energy conference that while wind and solar would expand, so too would oil and gas, in part to meet soaring demand for data centers. Liquefied natural gas would grow 65 percent by 2050, and oil will continue to be used as a feedstock for plastic, he said. “The exponential growth of AI is also creating a power surge that no one anticipated 18 months ago,” he said in a press release from the Abu Dhabi National Oil Co., where he remains managing director and group CEO. The developed world is continuing to move in the wrong direction on fossil fuels, climate activists say. “We know that the world’s richest countries are continuing to invest in oil and gas development,” said Bill Hare, a climate scientist who founded Climate Analytics, a policy group. “This simply should not be happening.” The Paris-based International Energy Agency said last week that oil and gas demand could grow for decades to come. That statement marked a reversal from the group’s previous forecast that oil use would peak in 2030 as clean energy takes hold. Trump’s policies are one reason for the pivot. Still, renewables such as wind and solar power are soaring in many countries, leading analysts to believe that nations will continue to shift away from fossil fuels. How quickly that will happen is unknown. “The transition is underway but not yet at the pace or scale required,” said a U.N. report on global climate action released last week. It pointed to large gaps in efforts to reduce fossil fuel subsidies and abate methane pollution. Lula opened this year’s climate conference by calling for a “road map” to cut fossil fuels globally. It has earned support from countries such as Colombia, Germany, Kenya and the United Kingdom. But it’s not part of the official agenda at these talks, and many poorer countries say what they really need is funding and support to make the shift. TRIPLE RENEWABLE ENERGY, DOUBLE ENERGY EFFICIENCY This call also emerged from the 2023 summit, and was considered a tangible measure of countries’ progress toward achieving the Paris Agreement’s temperature targets. Countries are on track to meet the pledge to triple their renewable energy capacity by 2030, thanks largely to a record surge in solar power, according to energy think tank Ember. It estimates that the world is set to add around 793 gigawatts of new renewable capacity in 2025, up from 717 gigawatts in 2024, driven mainly by China. “If this pace continues, annual additions now only need to grow by around 12 percent a year from 2026 to 2030 to reach tripling, compared with 21 percent originally needed,” said Dave Jones, Ember’s chief analyst. “But governments will need to strengthen commitments to lock this in.” The pledge to double the world’s energy efficiency by 2030, by contrast, is a long way behind. While efficiency improvements would need to grow by 4 percent a year to reach that target, they hit only 1 percent in 2024. ‘LOSS AND DAMAGE’ FUND When the landmark fund for victims of climate disasters was established at the 2022 talks in Sharm El-Sheikh, Egypt, it offered promise that billions of dollars would someday flow to nations slammed by hurricanes, droughts or rising seas. Three years later, it has less than $800 million — only a little more than it had in 2023. Mia Mottley, prime minister of Barbados, excoriated leaders this month for not providing more. Her rebuke came little more than a week after Hurricane Melissa, one of the strongest tropical cyclones ever seen in the Atlantic, swept across the Caribbean. “All of us should hold our heads down in shame, because having established this fund a few years ago in Sharm El-Sheikh, its capital base is still under $800 million while Jamaica reels from damage in excess of $7 billion, not to mention Cuba or the Bahamas,” she said. Last week, the fund announced it was allocating $250 million for financial requests to help less-wealthy nations grapple with “damage from slow onset and extreme climate-induced events.” The fund’s executive director, Ibrahima Cheikh Diong, said the call for contributions was significant but also a reminder that the fund needs much more money. Richard Muyungi, chair for the African Group of Negotiators and Tanzania’s climate envoy, said he expects additional funds will come from this summit, though not the billions needed. “There is a chance that the fund will run out of money by next year, year after next, before it even is given a chance to replenish itself,” said Michai Robertson, a senior finance adviser for the Alliance of Small Island States. GLOBAL METHANE PLEDGE Backed by the U.S. and European Union, this pledge to cut global methane emissions 30 percent by 2030 was launched four years ago at COP26 in Glasgow, Scotland, sparking a wave of talk about the benefits of cutting methane, a greenhouse gas with a relatively short shelf life but much greater warming potential than carbon dioxide. “The Global Methane Pledge has been instrumental in catalyzing attention to the issue of methane, because it has moved from a niche issue to one of the critical elements of the climate planning discussions,” said Giulia Ferrini, head of the U.N. Environment Program’s International Methane Emissions Observatory. “All the tools are there,” she added. “It’s just a question of political will.” Methane emissions from the oil and gas sector remain stubbornly high, despite the economic benefits of bringing them down, according to the IEA. The group’s latest methane tracker shows that energy-based methane pollution was around 120 million tons in 2024, roughly the same as a year earlier. Despite more than 150 nations joining the Global Methane Pledge, few countries or companies have devised plans to meet their commitments, “and even fewer have demonstrated verifiable emissions reductions,” the IEA said. The European Union’s methane regulation requires all oil and gas operators to measure, report and verify their emissions, including importers. And countries and companies are becoming more diligent about complying with an international satellite program that notifies companies and countries of methane leaks so they can repair them. Responses went from just 1 percent of alerts last year to 12 percent so far in 2025. More work is needed to achieve the 2030 goal, the U.N. says. Meanwhile, U.S. officials have pressured the EU to rethink its methane curbs. Barbados and several other countries are calling for a binding methane pact similar to the Montreal Protocol, the 1987 agreement that’s widely credited with saving the ozone layer by phasing out the use of harmful pollutants. That’s something Paris Agreement architect Laurence Tubiana hopes could happen. “I’m just in favor of tackling this very seriously, because the pledge doesn’t work [well] enough,” she said. CLIMATE FINANCE In 2009, wealthy countries agreed to provide $100 billion annually until 2025 to help poorer nations deal with rising temperatures. At last year’s climate talks in Azerbaijan, they upped the ante to $300 billion per year by 2035. But those countries delivered the $100 billion two years late, and many nations viewed the new $300 billion commitment with disappointment. India, which expressed particular ire about last year’s outcome, is pushing for new discussions in Brazil to get that money flowing. “Finance really is at the core of everything that we do,” Ali Mohamed, Kenya’s climate envoy, told POLITICO’s E&E News. But he also recognizes that governments alone are not the answer. “We cannot say finance must only come from the public sector.” Last year’s pledge included a call for companies and multilateral development banks to contribute a sum exceeding $1 trillion by 2035, but much of that would be juiced by donor nations — and more countries would need to contribute. That is more important now, said Jake Werksman, the EU’s lead negotiator. “As you know, one of the larger contributors to this process, the U.S., has essentially shut down all development flows from the U.S. budget, and no other party, including the EU, can make up for that gap,” he said during a press conference. Zack Colman and Zia Weise contributed to this report from Belém, Brazil.

BRUSSELS — The EU is seeking reassurances from Ukraine over future financial support to the country after a far-reaching corruption probe revealed a $100 million kickback scheme tied to its energy sector. Ukrainian anti-corruption agencies revealed this week that some of Volodymyr Zelenskyy’s close associates were allegedly involved in the plot, prompting the Ukrainian president to issue sanctions against his former business partner and dismiss several senior ministers. That’s divided Kyiv’s European partners. For many, the revelations are a positive sign of the continued independence of Ukraine’s anti-graft watchdogs. Some, however, want concrete commitments from the country that show it is serious about preventing similar incidents in the future. “The endemic corruption” revealed in the probe is “revolting,” said one EU official, who, like others for this story, was granted anonymity to speak freely on the sensitive matter, and “won’t help” the country’s reputation with international partners. “It will mean [the European] Commission will surely have to reassess how it spends” funds on Kyiv’s energy sector, the official argued, adding that in the future, “Ukraine will have to give more attention and transparency in how it spends cash.” “We expect Ukraine to press ahead with anti-corruption measures and reforms in its own country,” German Chancellor Friedrich Merz said Thursday, after calling Zelenskyy.  The president “needs to comfort everyone,” added an EU government official, “most likely with a plan on how to fix corruption.” The scandal comes at a delicate time for Ukraine. The country is facing a €41 billion budget crunch next year, while EU countries are currently deadlocked over unblocking a €140 billion reparations loan for Kyiv from frozen Russian assets. Ukraine’s foreign and energy ministries didn’t respond to POLITICO’s request for comment. But on Wednesday, Zelenskyy said “there must be maximum integrity in the energy sector in absolutely all processes,” adding: “I support … every investigation carried out by law enforcement and anti-corruption officials.” HIGH WIRE ACT So far, the scandal — the worst to hit Zelenskyy since he took office in 2019 — is not prompting allies to threaten to cut aid to Ukraine. On Thursday, the EU confirmed it would earmark €6 billion in new aid for Ukraine. Earlier this week, Estonia officially approved an additional €150,000 for Kyiv’s energy sector, while Germany is reportedly considering a €3 billion top-up for the country next year. As they met at the G7 on Wednesday and flocked to Warsaw for the EU-Ukraine Investment Conference on Thursday, allies sought to put on a united front. In recent months, Moscow has ramped up its bombing campaign on Ukraine’s critical energy infrastructure, pummelling its gas production facilities and coal power plants. | Maxym Marusenko/NurPhoto via Getty Images “It is painful to see how corruption affects the energy sector, especially as winter approaches and Russia continues its brutal attacks on energy infrastructure,” said Lithuanian Energy Minister Žygimantas Vaičiūnas. But we “stand firmly with the people of Ukraine — our support will not stop,” he told POLITICO. Ending aid for Kyiv’s battered energy sector would have a “terrible” impact ahead of this winter, said Aura Sabadus, a senior energy analyst specializing in eastern Europe at the ICIS energy consultancy. In recent months, Moscow has ramped up its bombing campaign on Ukraine’s critical energy infrastructure, pummelling its gas production facilities and coal power plants. As a result, the country has secured €500 million in aid from the European Bank for Reconstruction and Development to buy up emergency gas imports. Behind closed doors, Ukraine’s EU backers are also wary that being too vocal could feed into its opponents’ narratives aimed at discrediting Kyiv and scuppering its efforts to join the bloc. “A wartime mafia network with countless ties to President Zelenskyy has been exposed,” Hungarian Prime Minister Viktor Orbán, a consistent critic of Ukraine, claimed on social media on Thursday. “This is the chaos into which the Brusselian elite want to pour European taxpayers’ money.” “By [highlighting] corruption scandals, they only give ammo to those like Hungary who are saying it is a corrupt nation,” said one EU diplomat. “Those who are opposed to Ukraine … will milk this for all it’s worth,” added a second diplomat. A former senior Ukrainian official said he expected Brussels to double down on making some funding conditional on reforms. “But the overall taboo on criticizing Ukraine in public will hold,” he said. CLEANING UP Ukraine’s defenders say the probe is limited to one company, arguing international backers shouldn’t punish the energy sector as a result. But some allies still want to see more reforms. Up until now, the investigation has largely focused on Energoatom, Ukraine’s state nuclear energy company, accusing seven officials of manipulating contracts to extract kickbacks worth 10-15 percent of contract values. “There will be a cleansing and reset of Energoatom’s management,” Zelenskyy said Wednesday. In total, the Commission has granted “more than €3 billion” in energy-related aid to Kyiv since 2022, a spokesperson for the EU executive said. Around one tenth of that has been channeled through the Energy Community, an international organization that supplies Ukraine with in-kind energy equipment like transformers based on requests from Kyiv. In total, it has mobilized €1.5 billion in donations from Ukraine’s western partners. Energy Community Director Artur Lorkowski called the scandal “frustrating.” But at the Vienna-based organization, the corruption “risk is mitigated,” he said, since it retains “full control” over the coordination, purchase and post-arrival monitoring of the equipment — with procurement handled by an independent agency in the U.K. The EBRD, meanwhile, has allocated €3.1 billion in aid to Ukraine’s energy sector, a bank spokesperson said, around a third of its total support since 2022. Its “very robust procurement requirements,” including open tenders and direct payments to contractors, they said, gives the bank a “very high degree of comfort” for future donations. Still, others argue there is still a long way to go in eliminating corruption in the sector. Going forward, Ukraine should make its energy sector more transparent and give reassurances to its European partners that their money will be well spent, two EU diplomats and two European government officials said. “This is also a chance to cleanse and rebuild stronger,” said Vaičiūnas, the minister. Andrii Zhupanyn, an MP from Zelenskyy’s ruling Servant of the People party who sits on the parliament’s energy committee, agreed. Kyiv should start by improving the corporate governance of state-owned energy firms and strengthening their supervisory boards, he said, adding: “More transparency is necessary for sure.” Tim Ross, Jamie Dettmer and Veronika Mekoverova contributed to this report.

NEWPORT, Wales — Road signs around Newport still refer to this sprawling former industrial site as a radiator factory. But soon, it will generate a different kind of heat. Microsoft has chosen this area of South Wales — once the world’s steel capital — to build hulking new data centers. Five buildings, covering an area larger than three football pitches, are springing up to meet what the company describes as “exploding demand” for artificial intelligence compute power.  For Microsoft, the area’s industrial heritage is precisely why it’s investing. Newport’s legacy of heavy-duty factories means it has the infrastructure needed for energy-intensive data centers. But doubts over whether Britain can supply enough energy to keep up with demand from data centers are an urgent problem for the government’s AI ambitions. The government’s former AI adviser Matt Clifford has warned that without energy and planning reform, new data center projects and the billions of pounds of investment they bring are at risk.  Britain’s industrial electricity prices are 60 percent higher than the average of countries in the International Energy Agency, and waits for a grid connection can stretch to a decade.  “We had the biggest AI funders in the world lining up to invest tens of billions into our infrastructure if only we could sort out our energy mess,” Clifford said at an event about his time in No.10. U.S. Ambassador to the U.K. Warren Stephens, Donald Trump’s point man in London, is also watching closely, calling Britain’s energy costs the country’s “chief obstacle” to growth. “If there are not major reforms to U.K. energy policy, then the U.K.’s position as a premier destination in the global economy is vulnerable,” Stephens warned a business gathering in London. A TALL ORDER The Newport project will need 80MW of energy – enough to power a small town – but the Department for Science, Innovation and Technology (DSIT) predicts the country needs to boost its total data center capacity five-fold by 2035, from 1.8GW to 9.6GW. That expansion will mean data centers’ power total demand will treble over the same period, according to NESO, the body which manages U.K. electricity demand. A spokesperson for the DSIT said it was looking at “bespoke options” to support data centers’ energy demands, adding: “The work of our AI Energy Council — bringing together regulators, energy companies and tech firms — will ensure we can do that using responsible, sustainable sources.” AI Minister Kanishka Narayan told a conference for AI researchers in London in October that there was “no better place to build” than Britain, arguing its combination of talent, access to capital and large public markets is unmatched. Investors aren’t so sure.  “People aren’t willing to pay a premium on U.K. power rates to run their workloads here,” Mike Mattacola, international general manager at AI infrastructure company CoreWeave said at the same conference. “We need to fix that.” SELLING THE SHOVELS It’s not just energy prices that are the problem. The boss of Hitachi Energy U.K., which is working with the National Grid to upgrade Britain’s power network, warned that the grid is the biggest hurdle to Britain’s AI ambitions. Laura Fleming said data centers should be at “the heart” of the country’s energy planning, but added: “I’m still not sure whether as the U.K. we have sufficiently planned for this.”  More than half all applications for a grid connection are now made by data centers, according to the National Grid. Energy regulator Ofgem is trying to get a grip of things, grumbling that amid the “credible data center projects” applying for a grid connection, they want to get rid of “less viable projects that may crowd out those with genuine merit.” Power providers, meantime, are lining up to find the opportunities in this uncertainty. Two hundred miles to the north of Newport, the U.K.’s largest power station is offering itself as one solution. Drax Power Station burns wood pellets imported from North America and wants to build data centers hooked up to its four biomass terminals.  Richard Gwilliam, director of future operations, revealed that Drax has already held talks with hyperscalers and plans to bring a data center online in the early 2030s. He hoped the 2.6-gigawatt power station could offer “big scale stuff” to the market. Gwilliam also said the existing connections gave biomass a trump card to play in the data center race. SQUARING THE CIRCLE The rush for power is also clashing with Britain’s net zero ambitions. The most in-demand energy source for data centers is still fossil fuels, specifically gas. National Gas said it has had inquiries from five big data center projects since last November, equivalent to 2.5GW worth of energy capacity, or twice the capacity of Britain’s biggest nuclear power station, Sizewell B.  Its chief commercial officer, Ian Radley, argued gas provided customers with “the flexibility and capacity they need to enable the Government’s strategic AI ambitions.”  But environmental groups point out that the surge in carbon emissions from new data centers have not been factored in to the  U.K.’s Carbon Budget Delivery Plan, which sets out a path for the government to hit legally-binding climate goals up to 2037.  “It’s unclear how the government intends to square the circle of encouraging a construction frenzy of new, highly polluting data centers while not overshooting the binding climate targets they need to meet,” said Donald Campbell, director of advocacy at campaign group Foxglove. This tension is also being played out at the AI Energy Council, a body the government formed in January to bring AI and energy companies together, but which has only met twice.  It is co-chaired by two ministers with different priorities. Ed Miliband, as energy secretary, needs to cut Britain’s emissions to zero by 2050, while Technology Secretary Liz Kendall needs to turn AI’s promises of investment and growth, particularly to left-behind areas, into a reality.  The government has pushed the idea AI Growth Zones — huge data center campuses on former industrial land, which already have grid connections and will get fast-tracked through planning — as a solution. One has already been announced in Northumberland, but a decision on a second, planned for Teesside in north-east England, has been delayed until the end of this year by Miliband, whose department has to make a call on whether to greenlight plans for a hydrogen plant on the same site, which could preclude data centers being built there. “There is a large fight going on inside of government where Ed Miliband seems to have set himself up against not just the prime minister, but a number of secretaries of state,” Houchen told POLITICO during Conservative Party Conference in October.  THE NUCLEAR OPTION Long term, the government is betting on a cleaner, but more expensive energy source — nuclear, specifically small modular reactors. Michael Jenner, CEO of nuclear firm Last Energy UK, said they had received dozens of enquiries from data center builders and argued that the green credentials of nuclear was an ace card it could play against rival bids from gas companies.   “If you’re thinking about building data centers in South Wales, which a lot of people are, you have a problem with the authorities because they don’t want new gas there,” he said.  In September, EDF Energy announced plans to work with American company Holtec International building a crop of data centers next to small modular nuclear reactors at a disused coal plant in Nottinghamshire.  The Tony Blair Institute, which is influential with government ministers, has argued nuclear has a “unique” advantage when it comes to data centers. It also believes the country should scale back its net zero plans in favor of reducing energy costs to attract data center investment.  “Cheap, firm power is … not a ‘nice to have’ but a prerequisite for attracting AI-driven growth,” it argued in a report last month. Gas, meanwhile, should be part of that energy mix, the Institute recommended in July. Firms represented at the AI Energy Council have urged ministers to green-light greater use of gas turbines in the short term. The clock is ticking. Gas, nuclear, renewables or even wooden pellets — ministers willing on an AI revolution need to make decisions fast.  

President Donald Trump is no longer content to stand aloof from the global alliance trying to combat climate change. His new goal is to demolish it — and replace it with a new coalition reliant on U.S. fossil fuels. Trump’s increasingly assertive energy diplomacy is one of the biggest challenges awaiting the world leaders, diplomats and business luminaries gathering for a United Nations summit in Brazil to try to advance the fight against global warming. The U.S. president will not be there — unlike the leaders of countries including France, Germany and the United Kingdom, who will speak before delegates from nearly 200 nations on Thursday and Friday. But his efforts to undermine the Paris climate agreement already loom over the talks, as does his initial success in drawing support from other countries. “It’s not enough to just withdraw from” the 2015 pact and the broader U.N. climate framework that governs the annual talks, said Richard Goldberg, who worked as a top staffer on Trump’s White House National Energy Dominance Council and is now senior adviser to the think tank Foundation for Defense of Democracies. “You have to degrade it. You have to deter it. You have to potentially destroy it.” Trump’s approach includes striking deals demanding that Japan, Europe and other trading partners buy more U.S. natural gas and oil, using diplomatic strong-arming to deter foreign leaders from cutting fossil fuel pollution, and making the United States inhospitable to clean energy investment. Unlike during his first term, when Trump pulled out of the Paris Agreement but sent delegates to the annual U.N. climate talks anyway, he now wants to render them ineffective and starved of purpose by drawing as many other countries as possible away from their own clean energy goals, according to Cabinet officials’ public remarks and interviews with 20 administration allies and alumni, foreign diplomats and veterans of the annual climate negotiations. Those efforts are at odds with the goals of the climate summits, which included a Biden administration-backed pledge two years ago for the world to transition away from fossil fuels. Slowing or reversing that shift could send global temperatures soaring above the goals set in Paris a decade ago, threatening a spike in the extreme weather that is already pummeling countries and economies. The White House says Trump’s campaign to unleash American oil, gas and coal is for the United States’ benefit — and the world’s. “The Green New Scam would have killed America if President Trump had not been elected to implement his commonsense energy agenda — which is focused on utilizing the liquid gold under our feet to strengthen our grid stability and drive down costs for American families and businesses,” White House spokesperson Taylor Rogers said in a statement. “President Trump will not jeopardize our country’s economic and national security to pursue vague climate goals that are killing other countries.” ‘WOULD LIKE TO SEE THE PARIS AGREEMENT DIE’ The Trump administration is declining to send any high-level representatives to the COP30 climate talks, which will formally begin Monday in Belém, Brazil, according to a White House official who declined to comment on the record about whether any U.S. government officials would participate. Trump’s view that the annual negotiations are antithetical to his energy and economic agenda is also spreading among other Republican officials. Many GOP leaders, including 17 state attorneys general, argued last month that attending the summit would only legitimize the proceedings and its expected calls for ditching fossil fuels more swiftly. Climate diplomats from other countries say they’ve gotten the message about where the U.S. stands now — and are prepared to act without Washington. “We have a large country, a president, and a vice president who would like to see the Paris Agreement die,” Laurence Tubiana, the former French government official credited as a key architect of the 2015 climate pact, said of the United States. “The U.S. will not play a major role” at the summit, said Jochen Flasbarth, undersecretary in the German Ministry of Environmental Affairs. “The world is collectively outraged, and so we will focus — as will everyone else — on engaging in talks with those who are driving the process forward.” Trump and his allies have described the stakes in terms of a zero-sum contest between the United States and its main economic rival, China: Efforts to reduce greenhouse gas emissions, they say, are a complete win for China, which sells the bulk of the world’s solar, wind, battery and electric vehicle technology. That’s a contrast from the approach of former President Joe Biden, who pushed a massive U.S. investment in green technologies as the only way for America to outcompete China in developing the energy sources of the future. In the Trump worldview, stalling that energy transition benefits the United States, the globe’s top producer of oil and natural gas, along with many of the technologies and services to produce, transport and burn the stuff. “If [other countries] don’t rely on this technology, then that’s less power to China,” said Diana Furchtgott-Roth, who served in the U.S. Transportation Department during Trump’s first term and is now director of the Center for Energy, Climate and Environment at the conservative think tank the Heritage Foundation. TRUMP FINDS ALLIES THIS TIME Two big developments have shaped the president’s new thinking on how to counteract the international fight against climate change, said George David Banks, who was Trump’s international climate adviser during the first administration. The first was the Inflation Reduction Act that Democrats passed and Biden signed in 2022, which promised hundreds of billions of dollars to U.S. clean energy projects. Banks said the legislation, enacted entirely on partisan lines, made renewable energy a political target in the minds of Trump and his fossil-fuel backers. The second is Trump’s aggressive use of U.S. trading power during his second term to wring concessions from foreign governments, Banks said. Trump has required his agencies to identify obstacles for U.S. exports, and the United Nations’ climate apparatus may be deemed a barrier for sales of oil, gas and coal. Trump’s strategy is resonating with some fossil fuel-supporting nations, potentially testing the climate change comity at COP30. Those include emerging economies in Africa and Latin America, petrostates such as Saudi Arabia, and European nations feeling a cost-of-living strain that is feeding a resurgent right wing. U.S. Energy Secretary Chris Wright drew applause in March at a Washington gathering called the Powering Africa Summit, where he called it “nonsense” for financiers and Western nations to vilify coal-fired power. He also asserted that U.S. natural gas exports could supply African and Asian nations with more of their electricity. Wright cast the goal of achieving net-zero greenhouse gas pollution by 2050 — the target dozens of nations have embraced — as “sinister,” contending it consigns developing nations to poverty and lower living standards. The U.S. about-face was welcome, Sierra Leone mining and minerals minister Julius Daniel Mattai said during the conference. Western nations had kneecapped financing for offshore oil investments and worked to undercut public backing for fossil fuel projects, Mattai said, criticizing Biden’s administration for only being interested in renewable energy. But now Trump has created room for nations to use their own resources, Mattai said. “With the new administration having such a massive appetite for all sorts of energy mixes, including oil and gas, we do believe there’s an opportunity to explore our offshore oil investments,” he said in an interview. TURNING UP THE HEAT ON TRADING PARTNERS Still, Banks acknowledged that Trump probably can’t halt the spread of clean energy. Fossil fuels may continue to supply energy in emerging economies for some time, he said, but the private sector remains committed to clean energy to meet the U.N.’s goals of curbing climate change. That doesn’t mean Trump won’t try. The administration’s intent to pressure foreign leaders into a more fossil-fuel-friendly stance was on full display last month at a London meeting of the U.N.’s International Maritime Organization where U.S. Cabinet secretaries and diplomats succeeded in thwarting a proposed carbon emissions tax on global shipping. That coup followed a similar push against Beijing a month earlier, when Mexico — the world’s biggest buyer of Chinese cars — slapped a 50 percent tariff on automotive imports from China after pressure from the Trump administration. China accused the U.S. of “coercion.” Trump’s attempt to flood global markets with ever growing amounts of U.S. fossil fuels is even more ambitious, though so far incomplete. The EU and Japan — under threat of tariffs — have promised to spend hundreds of billions of dollars on U.S. energy products. But so far, new and binding contracts have not appeared. Trump has also tried to push China, Japan and South Korea to invest in a $44 billion liquefied natural gas project in Alaska, so far to no avail. In the face of potential tariffs and other U.S. pressure, European ministers and diplomats are selling the message that victory at COP30 might simply come in the form of presenting a united front in favor of climate action. That could mean joining with other major economies such as China and India, and forming common cause with smaller, more vulnerable countries, to show that Trump is isolated. “I’m sure the EU and China will find themselves on opposite sides of many debates,” said the EU’s lead climate negotiator, Jacob Werksman. “But we have ways of working with them. … We are both betting heavily on the green transition.” Avoiding a faceplant may actually be easier if the Trump administration does decide to turn up in Brazil, said Li Shuo, the director of China Climate Hub at the Asia Society Policy Institute in Washington. “If the U.S. is there and active, I’d expect the rest of the world, including the EU and China, to rest aside their rhetorical games in front of a larger challenge,” Li wrote via text. And for countries attending COP, there is still some hope of a long-term win. Solar, wind, geothermal and other clean energy investments are continuing apace, even if Trump and the undercurrents that led to his reelection have hindered them, said Nigel Purvis, CEO of climate consulting firm Climate Advisers and a former State Department climate official. Trump’s attempts to kill the shipping fee, EU methane pollution rules and Europe’s corporate sustainability framework are one thing, Purvis said. But when it comes to avoiding Trump’s retribution, there is “safety in numbers” for the rest of the world that remains in the Paris Agreement, he added. And even if the progress is slower than originally hoped, those nations have committed to shifting their energy systems off fossil fuels. “We’re having slower climate action than otherwise would be the case. But we’re really talking about whether Trump is going to be able to blow up the regime,” Purvis said. “And I think the answer is ‘No.’” Nicolas Camut in Paris, Zia Weise in Brussels and Josh Groeneveld in Berlin contributed to this report.