G7 disappoints with fossil fuel ‘loophole’

Leaders of the Group of Seven Rich Nations on Tuesday watered down a key pledge to end fossil fuel financing abroad as the need to tackle global warming clashed with fears over energy shortages.

The G7 countries – Britain, Canada, France, Germany, Italy, Japan and the United States – ended a summit in the Bavarian Alps by reaffirming their goal to reduce dependency on dirty fossil fuels and accelerate the transition to green energy accelerate.

But after three days of haggling, they also agreed to allow public investment in new international fossil fuel projects under certain conditions as countries struggle to rid themselves of Russian oil, coal and gas after invading Ukraine.

Federal Chancellor and summit host Olaf Scholz “promised and did not deliver a decisive impetus for international climate protection,” said Friederike Roder, Vice President of the non-profit organization Global Citizen.

A coalition of civil society organizations, including Oil Change International, also delivered a scathing verdict, condemning the gas “loopholes” that made it into the final communiqué.

The text reiterates that the G7 will halt new public investment in foreign fossil fuel projects by the end of 2022.

But given the “extraordinary circumstances” of the Ukraine war, “publicly sponsored investments in the gas sector may be appropriate as a temporary response.”

Observers said Germany and Italy, which are heavily dependent on Russian energy, had pushed hard for the amended text.

Like other European countries, they are scrambling to stockpile gas ahead of winter and diversify suppliers as they prepare for Russia to shut off energy taps entirely after recently slowing supplies.

Germany has already decided to reactivate mothballed coal plants to make up for Russia’s deficit and is eyeing a new gas project in Senegal.

Besieged by reporters over the fossil fuel backslide, Scholz stressed the latest moves are temporary and will not derail Germany’s climate goals or slow its shift to renewable energy.

Italian Prime Minister Mario Draghi acknowledged “concerns” about a return to dirty fossil fuels.

“We don’t want to go back on our commitments,” he said at a press conference.

“Even if we access new sources of gas supply, they replace Russian sources. We’re not increasing long-term gas supplies,” he said, describing the current energy transition as an “emergency.”

All G7 leaders reaffirmed the Paris Pact commitment to limit global temperature rise to 1.5 degrees Celsius and to achieve net-zero emissions by 2050.

They also reiterated a pledge to largely decarbonize their power sector by 2035.

Among the few new promises in the final declaration is a commitment to “a highly decarbonised road sector by 2030”.

Activists welcomed the announcement of climate partnerships with emerging economies like India, Indonesia and Vietnam to fund their clean energy transitions.

The partnerships “may have potential for transformation,” said the NGO Germanwatch.

US President Joe Biden and his counterparts also agreed to found an international “climate club”, Scholz’s flagship proposal at the summit.

The aim of the club, which is strongly geared towards the industrial sector, is to coordinate climate protection and at the same time avoid competitive disadvantages, for example through technology exchange or the agreement of common standards for CO2 pricing or green hydrogen.

However, some critics said the idea remained vague.

G7 leaders pledged to “intensify” efforts to mobilize climate finance for poor countries, many of which are already feeling the catastrophic effects of extreme heat waves, droughts and floods.

However, a long-standing goal of spending $100 billion annually by 2020 to help vulnerable nations adapt to climate change remains unmet.

Environmental activists said the G7 had done little to give impetus to the United Nations COP27 climate summit in Egypt in November.

“Chancellor Scholz failed to mobilize new climate commitments from G7 leaders, leaving them with a huge void to fill over the next four months to gain credibility at COP27,” said Alex Scott from the climate think tank E3G.