Australia is committed to delivering high-quality climate finance that responds to the needs of our development partners. Our climate finance supports countries in our region to strengthen their resilience to climate change impacts and achieve their renewable energy transition goals.
Australia delivered $3.9 billion in climate finance from 2020 to 2025. This included $1.3 billion in climate finance for the Pacific, principally to support countries adapt to the effects of climate change.
Where does Australia report its climate finance?
Australia has a strong track record of transparent reporting on both Australia's emissions and on our climate finance activities. Information on progress towards Australia's climate finance commitment, including details on expenditure by sector and region, is published annually in DFAT's ODA Statistical Summary and climate webpages.
In line with Australia's international reporting obligations, Australia reports historical climate finance biennially to the UNFCCC and provides forward-looking climate finance plans through Biennial Communication Reports.
In December 2024, Australia was pleased to submit our third Biennial Communication on climate finance to the UNFCCC and first Biennial Transparency Report under the UNFCCC's Enhanced Transparency Framework.
Australia also reports annually on development finance for climate and environment through the OECD DAC Creditor Reporting System.
The OECD aggregates all countries' UNFCCC climate finance data to track and report on global climate finance efforts: Climate Finance Provided and Mobilised by Developed Countries in 2013 2024 | OECD
How does Australia determine what 'counts' as climate finance?
Australia's climate finance is calculated by determining whether Australian Government support to development partners has a climate change objective and, if so, what proportion of expenditure can be counted as climate finance.
Australia has updated its climate finance accounting methodology from 2025–26. This change strengthens the transparency and consistency of climate finance reporting.
The OECD DAC Rio markers are used as a guide to assess the climate-relevance of investments:
- For bilateral and regional activities with a primary climate objective, 100 per cent of the expenditure is counted as climate finance.
- For bilateral and regional activities with a secondary climate objective (where addressing climate change is not the main driver of the investment, but is explicitly identified as one of its objectives), 40 per cent is counted as climate finance.
- For investments that mainstream climate change by assessing and addressing climate and disaster risks and opportunities, 10 per cent is counted as climate finance.
- For core contributions to multilateral institutions like the Asian Development Bank and Global Environment Facility, Australia uses OECD imputed multilateral shares to calculate the climate-specific percentage.
- For investments that do not explicitly and intentionally target climate outcomes, no expenditure is counted as climate finance.
Intent is a key consideration in climate finance accounting, and it must be clear that climate-related activities are intentional rather than incidental.
Climate finance activities are identified as supporting either adaptation, mitigation or both, and apportioned accordingly. Where a split between adaptation and mitigation cannot be determined (for example, where an investment is supporting the development of an integrated climate change action plan), it is reported as cross-cutting.
Counting Climate Finance from Australia's Non-Grant Finance Mechanisms
Loans
Australia provides climate-related loans directly from the Australia Government to development partners, including governments and the private sector.
For loans provided to sovereign entities, the climate-related component is converted to an ODA grant-equivalent value. This is calculated using an OECD methodology that assesses various characteristics of the loan, including the interest rate, repayment period, and recipient, to determine its concessional value. Only the grant-equivalent amount is counted towards Australia's climate finance..
Where loans are provided to the private sector or non-sovereign entities, the full value of the Australian Government loan is counted. This reflects the economic additionality of these loans in supporting climate-related development outcomes.
Other non-grant finance mechanisms
Australia also provides non-grant finance through intermediaries. Examples include the Australian Climate Finance Partnership, Australian Development Investments, and the Private Infrastructure Development Group.
Australia adopts an 'institutional approach' to count climate finance for these investments, counting the climate-specific portion of funds transferred from the Australian Government to the intermediary and the climate-specific portion of the attributable private finance mobilised.
Mobilised Private Climate Finance
Australia supports innovative blended finance mechanisms and private sector investment in partner countries in two ways:
- providing technical assistance to strengthen investment environments
- providing public finance to de-risk and catalyse private sector investment, including through first-loss finance and guarantees.
This support helps to overcome barriers associated with perceived investment risks, regulatory environments, and limited awareness of private investment opportunities.
Australia applies the OECD DAC methodology to calculate attributable private finance mobilised for all blended finance transactions. This methodology considers the amount of money invested, the position taken (for example, the riskiest tranche or a senior position), and the timing of the investment relative to other investors in the transaction. Any private finance mobilised through co investments or club deals is allocated between public investors to avoid double counting.
To ensure causal links between Australia's public interventions and mobilised private finance, all prospective projects are evaluated through instrument-specific governance processes which involve an assessment of additionality.
For further information, contact: climatefinancereporting@dfat.gov.au.