G7 nations agree 2030s net-zero targets for power sector
The leaders of the G7 nations have agreed a joint commitment to ensure their power sectors reach net-zero in the 2030s, setting up for the economy-wide transition by 2050.
Leaders from the UK, the US, Japan, Canada, Germany, France and Italy met virtually today (21 May), ahead of the start of the G7 summit in Cornwall next month. At the meeting, they signed a new communique designed to deliver on the 1.5C ambition of the Paris Agreement, beyond their long-term climate targets. The prevuous G7 agreement was 2C aligned.
Detailed in the new communique is a commitment for all G7 members to stop providing public finance to the coal sector this decade. While several G7 nations, including the UK, have already pledged to end coal generation before 2030, the pledge is particularly significant for Japan. Coal accounted for 31% of Japan’s electricity generation in the 2019-20 financial year and it is believed to be the world’s second-largest coal supporter, behind only China.
There is also a commitment to stop direct funding for coal-fired power stations in OECD nations by the end of 2021.
G7 members will encourage other nations to follow suit on coal.
More broadly, the communique states that all G7 nations will target net-zero power sectors in the 2030s, in recognition of the fact that the power transition will be needed to decarbonise many other key sectors. The exact date will vary nation-by-nation, taking into account factors such as the present generation mix and state of generation and distribution infrastructure.
The UK’s National Grid had previously been targeting net-zero by 2050. Its Electricity System Operator (ESO) had said that net-zero could be delivered for the grid as soon as 2025.
The G7 meeting is set to begin on 4 June with a finance meeting. Then, the main summit will run from 11-13 June. Carbis Bay, Cornwall, has been selected as the host location.
Green economy reaction
The communique marks a “step change” in developed nations’ approach to the low-carbon power transition, E3G’s senior policy advisor Jennifer Tollman said. A 2019 report revealed that G20 nations had tripled coal-fired power plant subsidies, with Japan among the worst offenders.
Tollman cautioned that while the communique “lays the foundation for the G7 to become an engine for keeping 1.5C in reach” – a feat COP26 president Alok Sharma described as his top priority in a speech last week – it is “not perfect”.
“A significant solidarity gap remains - around international climate finance, supporting green recovery, and addressing concurrent challenges around debt and vaccine access,” she explained. “Significantly increasing the support offer for non-G7 countries facing green transitions in the face of health and debt crises, as well as unambiguously phasing out not just coal but public finance for all international fossil investments, have emerged as clear credibility tests going into the June G7 summit."
E3G is notably urging the leaders of G7 nations to collectively double their international climate finance package, and to use the Summit to agree a support package for rolling out Covid-19 vaccinations in the Global South.
The Hoffman Centre for Sustainable Resource Economy’s founding director Bernice Lee added that, with the G7 representing 58% of global net wealth, the communique may inspire action from other nations.
Lee said: "This G7 announcement leaves China alone as the only significant funder of overseas coal power plants. Beijing has already signalled it is quitting coal-funding in Bangladesh, and I think this will raise further questions over its export finance strategy. Does China really want to be the last one standing for an industry on its last legs?"
Energy transition update
The news from the G7 comes in the same week that the International Energy Agency (IEA) published its first comprehensive roadmap on what a global net-zero transition would mean for the heat, power and transport sectors through to 2050.
The roadmap sets out more than 400 milestones on the global journey to net-zero. On renewable electricity generation specifically, the global solar PV generation capacity should reach 630GW and the global wind generation capacity should reach 390GW by 2030. This is around quadruple current levels.
Additionally, the roadmap states that investment into new fossil fuel extraction capacity should be halted immediately – particularly for aggressive forms of extraction including Arctic drilling and tar and oil sands.