Thu, Jul 18 2024 18 July, 2024

G7 leaders back gas, LNG despite growing fossil fuel phaseout calls

The meeting of G7 leaders under the Italian presidency last week concluded without any significant progress in climate commitments, despite growing calls for a phaseout of fossil fuels.

A G7 logo for the summit held in Apulia, Italy. (Photo: Adobe Stock/Игорь Головнёв)

In their final statement, the leaders of Italy, France, Germany, Japan, the U.S., the UK and Canada, convening in Apulia in Southern Italy from June 13th to 15th, reiterated commitments to maintaining global warming within the 1.5°C threshold by reducing GHG emissions by 43% within this decade and by 60% by 2035 against 2019 levels, as previously agreed.

At the same time they acknowledged that there is “still a significant gap between global current emissions trajectories and this commitment” and committed “to submitting ambitious 1.5°C aligned Nationally Determined Contributions (NDCs), which will be catalysts for investments, with economy-wide, absolute reduction targets, covering all GHGs, sectors and categories.”

They also welcomed COP28 commitments to triple global renewable capacity and double the global average annual rate of energy efficiency improvements by 2030, and committed to meet the global goal of deploying 1500 GW of energy storage in the power sector by 2030, “including through existing targets and policies.

They also reaffirmed the goal to eliminate “inefficient fossil fuel subsidies by 2025 or sooner” and to  achieve “a fully or predominantly decarbonised power sector by 2035 and to phase out existing unabated coal power generation in our energy systems during the first half of 2030s, or in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach.”

They also set a target to reduce methane emissions from fossil fuel operations by 75% by 2030.

G7 leaders said however that investments in new gas infrastructure are needed in the short-term, amid a goal to reduce Russian gas dependency and restrict Russian energy revenues, and reiterated the key role of “increased deliveries of LNG” adding 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.”

“In the exceptional circumstance of accelerating the phase-out of our dependency on Russian energy, publicly supported investments in the gas sector can be appropriate as a temporary response, subject to clearly defined national circumstances, if implemented in a manner consistent with our climate objectives without creating lock-in effects, for example by ensuring that projects are integrated into national strategies for the development of low-carbon and renewable hydrogen,” they said.

“This G7 summit has been a missed opportunity to raise the bar on climate ambition,” Federico Tassan-Viol, senior policy advisor for diplomacy at Italian climate change think tank ECCO told Gas Outlook.

“On climate and energy-related aspects, there is no real progress in the leaders’ statement compared to the Turin ministerial meeting,” he said.

“Gas is still protagonist: the ambiguity of the 2035 power systems decarbonisation goal has not been clarified, while at the same time public support for new, and unnecessary, gas projects has been reaffirmed.”

That’s despite gas demand scenarios showing “how existing infrastructure, including projects under construction, are more than enough to ensure gas supply security to the G7 and its allies.”

“The G7 countries need to be first-movers to publish their Nationally Determined Contributions (NDCs),” Dave Jones, insights director at global energy think tank Ember, told Gas Outlook.

“There is now a weighty expectation that these must include a commitment — and a plan — for a decarbonised power sector by 2035. That means each country would need to plan not only to phase out coal power, but also gas power. And that means setting targets for an unprecedented scale-up of renewable electricity to 2030, which currently fall well short of a tripling,” he added.

While it’s positive that G7 Leaders reaffirmed the COP28 outcome in relation to the need to transition away from fossil fuels at the same time “leaders merely reaffirmed commitments already made by their energy and climate ministers” with no actual plans and timelines to phase out oil and gas investment and production, climate think tank E3G said.

Boosting investments in the African energy sector is another key focus of the G7 leaders.

However “despite the recent political win and big plans towards Africa, Meloni’s global credibility is at stake both from the lack of delivery of new finance for development, including for IDA21, and from pushing for more investment in African gas production, which could have a negative impact on public budgets and become a key factor in driving a worsening debt crisis,” climate think tank E3G said.

The International Development Association (IDA) is the part of the World Bank that helps the world’s low-income countries through grants and low-interest loans that are financed through governments donations.

G7 Leaders also said they intend to reform international public finance architecture, and to boost Multilateral Development Banks (MDBs) role.

However “their approach to other key issues including debt and fiscal space” for emerging markets’ transition “was lacklustre, and the G7 did not notably support or endorse the Brazilian G20 Presidency’s push to create national transition plans and collaborative funding platforms for developing country transitions,” it said.

At the same time, European leaders of the three major economies have reaffirmed the key priorities of the EU Green Deal, including on renewables, storage, grids and energy efficiency. 

“Change may come soon,” the think thank anticipated.

“A new Labour Government in the UK under Keir Starmer could bring the leadership we need after announcing yesterday they will end new oil and gas licenses.”

“That would be a first in G7 and exactly the leadership we need to steer the group forward and in the right direction.”

“All eyes will now be on whether the G7 choose to up their game when they come forward with new 2035 climate targets that limit warming to 1.5C, as all countries under the Paris Agreement must do ahead of next year’s major COP30 climate summit in Brazil,” Tom Evans, senior policy advisor at E3G said.

“The G7 have said they will do this by next February, but the real test is whether these climate plans chart a course for the transition away from fossil fuels, as they agreed to do just 6 months ago at COP28.” 

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