G7 Backtracking on Coal and Gas

    Stockholm (NordSIP) – “We, the Leaders of the Group of Seven (G7), met in Hiroshima for our annual Summit on May 19-21, 2023, more united than ever in our determination to meet the global challenges of this moment and set the course for a better future,” reads the official communiqué issued after one of the year’s most important meetings.

    Yet, although “the triple global crisis of climate change, biodiversity loss and pollution” appear to have featured prominently among the global challenges the leaders of the free world were discussing in Hiroshima, critics argue that they failed, yet again, to set the course for a better future in that respect. The meeting ended without establishing specific deadlines for phasing out fossil fuels. The somewhat diluted commitment they came up with was to achieve a “fully or predominantly” decarbonized power sector by 2035 and accelerate “the phase-out of domestic unabated coal power”.

    “The G7, representing about half of global economic wealth, has failed once again as a collective to comply with its historic and current responsibilities to tackle the climate crisis,” comments Dr Stephan Singer, Senior Adviser, Climate Action Network International. “Their statement from Hiroshima shows no plan or commitment to phase out fossil fuels well before 2050, has weak announcements on renewables and energy efficiency for this decade, and lacks stronger pledges on finance to developing nations.”

    Gas is back

    Citing Russia’s war in Ukraine, the G7 communiqué highlights “the important role that increased deliveries of LNG can play” and states that “investment in the sector can be appropriate in response to the current crisis and to address potential gas market shortfalls provoked by the crisis”.

    Although envisioned as “a temporary response” to the crisis, this public support for gas investments, allegedly formulated by Germany and co-sponsored by Japan, is a severe setback, according to climate experts.

    “A month ago, G7 ministers successfully pushed back against a Japan-led push for gas investments and fossil fuels,” writes Laurie van der Burg, Co-Manager of Global Public Finance, Oil Change International. “But Germany joining Japan in promoting gas investments means we now have a disastrous G7 Summit outcome. The repeated call for public gas investments directly contradicts the G7 Leaders’ claim that they have fulfilled their commitment to end public finance for fossil fuels by the end of last year. It also jeopardizes 1.5°C and energy security goals,” she adds.

    And so is coal

    “We will work towards ending the construction of new unabated coal-fired power generation,” states the communiqué. Rather than agreeing on an appropriate deadline, however, the G7 leaders write that they will do it “as soon as possible.”

    Given Japan’s heavy reliance on coal, alongside oil and gas, in the aftermath of the Fukushima nuclear disaster, it is understandable that the host country has adopted a “realistic” approach to decarbonization. Even so, the leaders’ inability to set a timeline for exiting coal, resulting from Japan’s opposition, is perceived as a huge disappointment.

    “G7 leaders acknowledge we are facing a climate crisis and call on other countries to do more to fight it, but they weaken this message by not walking the talk at home. In particular, Japan’s resistance to phasing out coal power generation and Germany’s insistence on more public investment in gas undercut the G7’s leadership at a time when it is desperately needed,” says Alden Meyer, Senior Associate, E3G.

    Relying on new technology

    The communiqué emphasizes the need to “significantly accelerate the deployment of renewable energies and the development and deployment of next-generation technologies”. It mentions hydrogen and its derivatives, such as ammonia, several times and calls them “impactful as effective emission reduction tools to advance decarbonization.”

    Another technology that gets the blessing of the leaders is Carbon Capture, Utilization and Storage (CCUS). Such technologies “can be an important part of a broad portfolio of decarbonization solutions to reduce emissions from industrial sources that cannot be avoided otherwise,” reads the statement.

    Earlier this month, COP28 President-Designate Sultan Al Jaber attracted a wave of criticism over a similar endorsement of CCUS, calling for smart government regulation to make the technology commercially viable. Environmental activists interpreted his comments as a covert opening for the continued use of fossil fuels, as long as you attempt to remove the resulting carbon dioxide emissions from the atmosphere afterwards.

    “The message from G7 leaders falls short in addressing their carbon addiction,” summarises Andreas Sieber, Associate Director for Global Policy.

    Image courtesy of Graham Hendicott from Pixabay
    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

    Latest Posts

    Partner content


    NordSIP Insights Handbook

    What else is new?