Company disclosures (3)
Financial effects - Current reporting period
Climate-related catastrophe claims (2025)
In 2025, net catastrophe claims of $751 million were below the Group's allowance of $1,160 million. Net catastrophe claims included $715 million attributable to climate-related natural events, such as the Californian Wildfires, Hurricane Melissa and a series of storms and floods in Australia, including Cyclone Alfred.
Relative exposure indicators
As an indicator of relative exposure within the claims profile, the modelled aggregate net annual average loss (AAL) for climate-related perils for 2026 is $654 million and represents approximately 5% of the Group's 2026 plan net claims, noting that modelled outcomes are subject to significant uncertainty.
Portfolio optimisation outcomes
Following the exit of underperforming property portfolios and recalibration of retained property lines, QBE has experienced catastrophe losses at or below its established allowances in recent years.
Current Financial Effects of Climate-Related Risks and Opportunities
2025 Financial Performance:
Climate-Related Investments:
- CTAP expenditure: $136 million
- Capital expenditure: $2.4 billion (down 16% on 2024), including climate-related projects
Revenue Generation from Climate Initiatives:
- ACCUs received: 907,872 Australian Carbon Credit Units from Moomba CCS
- CCS Operations: 1.23 million tonnes of CO2e stored at Moomba CCS (total operated basis)
Operational Benefits:
- Emissions Reduction: Achieved 2030 Scope 1 & 2 net emissions target, 42% reduction from baseline
- Cost Management: Production cost of $6.78/boe (excluding Bayu-Undan), demonstrating operational efficiency
Infrastructure Investments:
- Barossa LNG: Operational in 2025 with associated decarbonisation features
- Darwin LNG Life Extension: Completed to support long-term operations
Market Positioning:
- Strong free cash flow of $1.8 billion enabling continued investment in climate initiatives
- Competitive positioning in lower carbon LNG supply to Asian markets
Current Financial Impact of Climate-Related Risks
Safeguard Mechanism Compliance Costs The Group incurred net compliance costs under the SGM in FY2025 amounting to $3.5 million. The Geelong Refinery currently holds Trade-Exposed Baseline-Adjusted (TEBA) status under the SGM, which reduced our cost exposure in 2025.
While the current financial impact of the SGM is not considered material to the Group's financial statements, it is the risk of increasingly demanding climate-related regulations and policies (and the resulting rise in compliance costs) in addition to the current SGM regulations that is regarded as a material anticipated risk for the Group.
Low Carbon Liquid Fuels Opportunity The opportunity presented by LCLFs remains in its early stages, with current investment limited in scale and financial contributions still minor, $2.2 million in 2025. We have established supply chains for SAF, RD and Low Sulphur Marine Fuel (LSFO). However, supply of these products represents only a small share of our overall portfolio. Our supply, together with volumes identified through publicly available information, represented less than 0.05% of the total fuel market in Australia in 2025.
Demand for Hydrocarbon Fuels In 2025 the Company continued to see resilience in the Australian fuel market. There continues to be growth in fuel usage despite signs of increased uptake of low-carbon liquid fuels (LCLFs) and EVs for light rigid trucks and passenger vehicles in Australia, as well as improvements in fuel efficiency in passenger vehicles.
The Australian fuel pool grew from 58.1 billion litres in 2024 to 58.9 billion litres in 2025. The total number of registered passenger vehicles in Australia has increased from 15.6 million vehicles in 2024 to 15.99 million vehicles in 2025. Petrol and diesel vehicles remains at 94% of the market share, with the remaining made up of hybrids (4%) and EVs (2%).
This risk did not have a material impact on the Group's financial position, performance and cash flows in 2025.
Emissions Reduction Investments In 2025, we invested $20 million in a series of capital projects at the Geelong Refinery aimed at reducing emissions where commercially viable. These projects are expected to deliver an estimated annual reduction of 29 kt Scope 1 emissions.