G-7 Pledges Fossil Fuel Phase-Out Despite Coal, Gas Caveats

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(Bloomberg) — Leaders of the world’s most developed economies reached a deal to accelerate the phase-out of unabated fossil fuels but failed to agree on a deadline to exit coal and left the door open for new natural gas investments.

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The Group of Seven said it would “accelerate the phase-out of unabated fossil fuels so as to achieve net zero in energy systems by 2050,” according to a communique issued by the group’s energy and environment ministers who met in the northern Japanese city of Sapporo over the weekend.

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The G-7 have 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. Failure to agree on a timeline to exit coal may weaken resolve ahead of a critical UN climate summit in Dubai later this year — COP28 — where nearly 200 nations will be pressed to phase out the fossil fuel. 

The document also allows for new investment in natural gas, which environmental activists said contradicted the group’s communique from 2022. 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.” 

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This year the G-7 said that “investment in the gas sector can be appropriate to help address potential market shortfalls” provoked by Russia’s invasion of Ukraine if they are “implemented in a manner consistent with our climate objectives and without creating lock-in effects.”

In earlier drafts, Japan had called for support for upstream investment in LNG and natural gas. French Energy Minister Agnes Pannier-Runacher told reporters Saturday on the sidelines of the meeting that a compromise was reached which “implicitly means that we cannot invest in the exploration of new gas capacity.” 

The G-7 also called for accelerating installment of renewables. In this year’s communique the group said it planned to boost solar capacity to more than 1,000 gigawatts and offshore wind generation to 150 gigawatts from 2021 levels across its constituents by the end of this decade. The Nikkei reported Saturday those figures would triple solar power and increase offshore wind capacity seven-fold across the group.

Neither targets constitute new ambition, said Maria Pastukhova, a senior policy advisor at the consultancy E3G, who said that existing announced national targets by G-7 countries effectively equal the same amounts.

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.

—With assistance from Takashi Umekawa.

(Updates with details throughout.)

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