Extreme weather events are occurring across the globe, from the catastrophic floods that recently struck Nepal to heat waves and wildfires in Europe, heightening awareness of climate risks. Leading meteorological agencies have warned that a very strong El Niño—often referred to as a “Super El Niño”—could develop in the second half of this year. If a powerful El Niño coincides with a planet already heated by climate change, it could intensify heat waves, droughts and torrential rainfall, while disrupting energy supplies, food prices and even regional security. This article explores the complex crises that a Super El Niño could trigger and how major countries and businesses should respond.

Senior Researcher CHANG Ki Yoon POSCO Research Institute

The Return of El Niño: Warning Signs from the Ocean

Record-breaking increases in sea surface temperatures and the rapid transition of climate patterns are driving the spread of extreme weather worldwide. In June, leading meteorological agencies, including the World Meteorological Organization (WMO) and the U.S. National Oceanic and Atmospheric Administration (NOAA), officially declared the onset of El Niño.

Sea surface temperatures in the central and eastern Pacific are now rising rapidly, raising the possibility that El Niño could develop in the second half of this year into a very strong event comparable to the 2015 “Godzilla El Niño.” In particular, the transition from La Niña to El Niño has occurred at a record pace, prompting repeated warnings from the scientific community that heat accumulation in the global climate system is approaching a critical threshold.

* Super El Niño: An informal term, rather than an official scientific classification, used to describe a strong El Niño event.
* Godzilla El Niño: A nickname for the exceptionally strong El Niño that lasted from 2015 into early 2016. It was classified as a very strong El Niño, with sea surface temperatures remaining at least 2°C above average for three consecutive months.
* La Niña: A climate pattern characterized by below-average sea surface temperatures in the central and eastern Pacific Ocean. It is the opposite phase of El Niño.

▲ A map showing sea surface temperature anomalies during an El Niño event. Red indicates temperatures above the historical average. Source: U.S. National Oceanic and Atmospheric Administration (NOAA)

The effects of warming oceans do not remain confined to the sea. The ocean is a vast heat reservoir that absorbs approximately 90% of the excess heat generated by global warming. As oceans become warmer, they release more heat and water vapor into the atmosphere, potentially intensifying heat waves and strengthening tropical cyclones such as typhoons and hurricanes. Higher evaporation rates can also increase the risk of torrential rainfall and flooding.

Heatwaves, Floods, Wildfires… The Cost of the Climate Crisis

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Extreme weather driven by climate change is already becoming a reality around the world. In June and July of this year, Western Europe experienced record-breaking heat and drought. Pissos in southwestern France recorded an all-time June high of 44.3°C, while a combination of high temperatures and drought sparked a series of major wildfires in Spain, Portugal, Greece and Romania. The resulting economic and ecological costs were estimated at approximately EUR 3.1 billion.

In Asia, torrential rainfall began in central and southern China in May, followed by severe downpours and flooding in Japan’s Kanto and Tokai regions and across Southeast Asian countries, including Indonesia and Malaysia. These events brought major transportation and power infrastructure to a standstill.

More recently, a massive flash flood triggered by landslides and a glacial collapse struck the Rasuwa region in northern Nepal. The disaster caused numerous casualties and severely damaged critical infrastructure, including roads, bridges, homes and hydropower facilities. With heat waves, droughts and floods continuing worldwide, the addition of a powerful El Niño could expand climate risks into broader threats to energy, food and security.

From Power Shortages to Rising Grain Prices: The Ripple Effects of El Niño

The effects of El Niño often emerge several months to a year after its onset. Experts therefore warn that rising temperatures and extreme weather could continue through 2027. In particular, extreme weather events are likely to occur simultaneously across multiple regions. Contrasting events may unfold at the same time, with severe drought in one region and heavy rainfall and flooding in another.

The greater concern is that climate risks associated with El Niño could trigger cascading disruptions to electricity supplies, agricultural production and regional stability. Record-breaking heat waves may sharply increase demand for cooling, while droughts could cause hydropower generation to plummet, adding upward pressure to energy prices. Drought in the major agricultural regions of India and Southeast Asia could also lead to agflation,* with prices of key commodities such as rice and sugar surging.

Geopolitical tensions cannot be ruled out either. Water shortages could increase the risk of conflict in the Middle East and inland Africa, while the emergence of climate refugees could lead to tighter border controls and further tensions.

* Agflation: A portmanteau of “agriculture” and “inflation,” referring to a rise in overall prices driven by sharp increases in the prices of grains and other agricultural products.

How Countries Are Responding to Climate Risks

As climate risk emerges as a key factor affecting energy prices, food supplies and supply chain stability, countries are accelerating efforts to safeguard their own energy and food security. If the effects of El Niño persist from the second half of this year through 2027, disruptions to agriculture, energy systems and supply chains could weigh on global GDP growth. Emerging economies in Southeast Asia and South America are expected to be particularly vulnerable.

National carbon neutrality plans are also likely to face setbacks, as countries may increase their use of fossil fuels to compensate for the intermittency of renewable energy caused by extreme weather. Climate risks are therefore likely to negatively affect global carbon neutrality roadmaps and the broader energy transition.

Meanwhile, as climate risk becomes an increasingly important factor in corporate ESG assessments and sovereign credit ratings, the restructuring of supply chains around “climate resilience*” is also expected to accelerate.

* Climate resilience: The capacity to minimize damage during a climate crisis and rapidly respond, recover and rebuild.

The development of El Niño is more than an isolated weather anomaly. It is expected to evolve into a complex, interconnected crisis—or “poly-risk”—threatening energy, food and security worldwide through the second half of 2027. Strengthening climate resilience at both the national and corporate levels will therefore become a key determinant of future competitiveness. Countries will also inevitably need to adjust their carbon neutrality roadmaps and the pace of their energy transitions.

Korea, in particular, is frequently exposed to damage from extreme weather. The country needs to strengthen public-private cooperation to stabilize supplies of energy, food and other essential commodities, supported by a systematic framework for managing critical national infrastructure.

At the POSCO group level, climate risks at raw material sourcing locations such as Australia and Brazil should be closely monitored to assess the resilience of raw material supply chains. Processes should also be implemented to mitigate climate risks at business sites, including flooding. Now that extreme weather has become the new normal, the ability to anticipate crises and respond proactively will determine the future competitiveness of both countries and businesses.