G-7 agrees to fast-track fossil fuels phase-out

The Group of Seven nations agreed to accelerate the phase-out of unabated fossil fuels but fell short of sealing a deal on a timeline to exit coal.

The ministers are negotiating a joint communique that outlines support from the world’s most advanced economies for the global energy transition.

The G-7 has appointed themselves leaders in the global mission to decarbonize, and the communique sends an important political signal that sets the tone for energy and climate conversations for the rest of the year. Still, the failure to agree on a timeline to exit coal may weaken resolve ahead of a critical UN climate summit in Dubai later this year — COP 28 — where nearly 200 nations will be pressed to phase out the fossil fuel.

The G-7 pledged last year to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited circumstances clearly defined by each country that are consistent with a 1.5 °C warming limit.” But that hasn’t stopped some members from continuing to finance new fossil fuel generation.

The Japan Bank for International Cooperation and Japanese Nippon Export and Investment Insurance earlier this year committed $655 million for a new 1,580-megawatt natural gas power plant in Uzbekistan. And public finance support in Germany and Italy for fossil fuel projects doesn’t align with climate pledges the group’s energy and environment ministers made last year, according to nonprofit group Oil Change International.

In the earlier drafts of the communique for the ministerial, Japan had called for support for upstream investment in LNG and natural gas. The French energy minister said that a compromise was reached which “implicitly means that we cannot invest in the exploration of new gas capacity.”

G7 countries are still negotiating over ways to reduce vehicle emissions. Securing metals critical for building green technologies is also under discussion, and G-7 members are working on a plan to allocate more than 1 trillion yen ($7.5 billion) toward the development of supply chains to ensure supplies of minerals like lithium and nickel. The proposal may help sidestep export restrictions on raw materials critical for manufacturing batteries and building clean energy infrastructure by countries including China and India.

The Sapporo meeting is a precursor to the annual G-7 summit for world leaders, which Japanese Prime Minister Fumio Kishida will host in Hiroshima next month.