G7 nations agree on low-carbon energy grids by 2035 and fossil fuel funding phase-outs

The G7 are meeting in Japan next month

Energy and climate ministers from G7 nations met last week in Berlin for a three-day meeting to discuss climate policy.

Ministers have pledged to deliver “predominantly” low-carbon power grids, effectively decarbonising the electricity mix, by 2035.

The communique states that the new targets are “consistent with our 2030 NDCs (Nationally Determined Contributions), our power sector transition commitments and our respective net-zero commitments, concrete and timely steps towards the goal of an eventual phase-out of domestic unabated coal power generation”.

Ministers have also pledged to scale up renewable technologies to enable this goal to be met.

In a big breakthrough in the bid to end fossil fuel generation, Japan has, for the first time, promised to end subsidies for overseas fossil fuel projects. All G7 countries have now made this pledge, with a  deadline set for the end of 2022.

While the announcement is a welcome step forward, Reuters has reported that a draft version of the communique committed to deliver these fossil-fuel-free electricity networks by 2030. This was dropped from the final agreement, with a water-downed target of a “predominantly” carbon-neutral system instead introduced.

COP26 President Alok Sharma commented: “This time last year, the G7 showed that it was prepared to act and now we have gone further still. I am pleased to say that in this communique we have reaffirmed our unwavering commitment to the Paris Agreement, as well as the commitments made in the Glasgow Climate Pact just six months ago.

“I am encouraged that this communique responds to the Glasgow Climate Pact’s ask of nations to revisit and strengthen the ambition of our individual 2030 emission reduction targets. And in line with this, we call on all countries, but especially major emitters, to increase their ambition, if their 2030 NDCs are not aligned with a 1.5 degree pathway.”

Business calls

Last year’s G7 meeting saw members agreeing to end direct government support for new thermal coal generation without co-located carbon capture by the end of 2021. Efforts to put in place a complete stop to new domestic generation were reportedly hampered by Japan.

Heading into the meeting, business networks representing more than 7,000 firms called for increased ambitions to phase-out coal and increase clean power generation, due to the energy price crisis and climate crisis.

The We Mean Business Coalition has spearheaded an open letter to the Ministers attending the talks to recognise that “we are in a defining moment in history”, with a rapid and joined-up response needed to address the energy trilemma – energy security, equity and environmental sustainability.

The letter emphasizes the need for action to decarbonise energy and limit the global temperature increase to be accelerated – not de-prioritised or watered down – in the face of Russia’s invasion of Ukraine.

It calls on all G7 nations to put forward stronger Nationally Determined Contributions to the Paris Agreement ahead of COP27 in Egypt this November, in the first instance.

The letter goes on to ask nations to commit to ending domestic coal-fired power generation by 2030. International support for coal in OECD countries should also be ended by this point, the letter states, with support in non-OECD countries being phased out through to 2040.

The We Mean Business Coalition letter goes on to recommend that 70% of the G7’s energy generation mix is accounted for by renewable energy by 2030, with a major scaling up of generation and a phase-out of all fossil fuel subsidies by 2025. At present, G7 nations are only required to end “inefficient” fossil fuel subsidies by 2035.