G7: Wealthy nations urged by thousands of businesses to accelerate clean energy transition

With G7 Ministers hosting environmental talks this week, business networks representing more than 7,000 firms have called for increased ambitions to phase-out coal and increase clean power generation, due to the energy price crisis and climate crisis.

G7: Wealthy nations urged by thousands of businesses to accelerate clean energy transition

G7 nations account for 27% of global fossil fuel production.

Ministers are meeting in Bavaria from Wednesday (25 May) to Friday (27 May) for talks on environment, climate and energy-related topics. With wholesale gas prices having skyrocketed since the overarching G7 Summit in Cornwall last June, hopes are high that Ministers will revisit commitments made there on the energy transition.

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 UK Presidency for COP26 has asked all nations to make this move, and the letter emphasizes the importance of wealthy nations leading by example.

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.

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.

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.

Transport-related energy use is also covered in the letter. It calls on Ministers to jointly commit to ending the sale of non-zero-emission light duty vehicles by 2035. The UK already has a ban in place for 2030, while the EU is formalizing a ban for 2035. Canada also has a 2035 zero-emission vehicle mandate but may yet permit the sale of hybrids beyond this point. Japan is planning a 2035 ban with a hybrid exemption.

The US is the biggest G7 laggard in this regard. While the federal government will only purchase zero-emission cars and vans by 2035, there are no official plans for a national ban at present.

Co-signing the letter are BSR, CDP, Ceres, The Climate Group, The B Team, The World Business Council for Sustainable Development (WBCSD) and the Corporate Leaders Group Europe. Collectively, these organisations represent more than 7,000 businesses.

The letter states: “Through additional policy measures, G7 governments can send clear signals to business on the speed and direction of travel, remove barriers and ensure the most effective and efficient private sector investment and transition pathways.

“To succeed, the clean energy transition must be just, people-centred and with rigorous care for social participation, supported by coherent public spending and investment decisions. We and the businesses we work with stand ready to wholeheartedly support and work with you in this regard.”

Reuters reported on Wednesday that a draft communique from this week’s meeting includes a 2030 ban on domestic coal generation and international support for coal in OECD nations. The draft would also commit G7 countries to have a “net zero electricity sector by 2035” and bring forward the commitment to ending “inefficient” fossil fuel subsidies by one decade, to 2025.

These inclusions may well be weakened before the talks conclude.

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie