The G7 have made clear that they want to drive the global transition to a clean energy economy. To make real progress towards this objective at the Leaders’ Summit from 19th – 21st May, G7 leaders need to:
- Show commitment to scaling up climate ambition at home by fully decarbonising their electricity sectors by 2035, electrifying their transportation sectors, reducing the energy intensity of their economies, and cutting back on their consumption and production of fossil fuels.
- Crucially this should include a leaders’ level commitment to accelerate the phase-out of fossil fuels, including an end to new coal power plant construction, alongside robust guardrails on any mentions of hydrogen and ammonia to ensure any consideration of their use is prioritised for hard-to-abate sectors and is aligned with a 1.5°C pathway and the G7’s power sector decarbonisation goal.
- Demonstrate willingness to partner with developing countries to build resilient, affordable, and sustainable global clean energy supply chains that reduce dependence on unreliable fossil fuels and benefit workers and local communities.
- Commit to mobilising much greater public and private financial flows, needed to decarbonise the global economy in line with the Paris Agreement temperature goals, and addressing the mounting debt and fiscal space crises affecting many developing countries.
- Demonstrate solidarity with vulnerable countries that are suffering ever-more-intense climate impacts by indicating how they intend to fulfil their pledge to double the provision of adaptation finance to $40 billion annually by 2025, reiterating their commitment to operationalising the Loss & Damage Fund by COP28, and signalling their intention to mobilize innovative sources of finance for L&D, including in support of the Fund.
Decarbonisation and coal phase-out
G7 leaders need to firmly express the necessity of decarbonising the power sector by 2035, ideally citing the G6’s preferred unambiguous language of “fully decarbonised” rather than Japan’s added “or predominantly” caveat, which dilutes and offers scope for misinterpretation around G7 ambition. Power sector transition must be contextualised in terms of a broader movement away from fossil fuels, including a commitment to accelerate the phase-out of unabated fossil fuels, to achieve net zero in energy systems by 2050 at the latest.
Japan is keen to promote ammonia co-firing with coal
. It is important that other G6 countries ensure that any mention of hydrogen and ammonia in the final text must include restrictions and guardrails to ensure that hydrogen and ammonia should be used only in hard-to-abate sectors; and that ammonia for power generation, if considered at all, must be aligned with a 1.5°C pathway and the G7’s goal to decarbonise the power sector by 2035.
At its Climate and Energy Ministerial, the G7 made for the first time an explicit call for an end to new coal construction globally. A firm commitment to “no new coal” at leaders’ level would signal the growing trend away from new coal outside of China
. It would mean Japan will need to stop issuing new permits for coal power plant construction, increasing the obstacles for the proposed Genesis Matsushima coal power project to proceed, and invite scrutiny of the US’s CONSOL plant which seems again to be in the pipeline. Committing to end coal construction – and supporting other countries to do so – would be an important foundation for further “no new coal” commitments at the UN Climate Ambition Summit in September (Guterres’s top ask in his “Acceleration Agenda
”), G20 and at COP28.
Specific targets for deploying solar and wind power will signal that the G7 is confident in delivering clean power at scale, and boost momentum for global renewables targets
to be set at COP28.
Though an acknowledgement of a potential need for further investments in the gas sector found its way into the outcome of the Climate and Energy Ministerial, the G7 committed to ensure their alignment with climate objectives, which should de-facto exclude any new upstream gas assets. Furthermore, the G7 has for the first time highlighted the need to accelerate gas demand reduction and clean energy deployment as key instruments towards the security of gas supply. However, the risk persists that Japan interprets this language in a way that justifies new upstream investments, and the G6 must make sure to hold Japan accountable and avoid any further confusing signals on gas at Leaders. In addition, the Group must voice their support to other, particularly developing, gas-importing countries to reduce their gas demand and boost the resilience of their energy systems.
The G7 meeting of Finance Ministers in Niigata, 11th – 13th May, failed to deliver the level of ambition needed to address the climate crisis. G7 leaders need to demonstrate progressiveness and ambition on a whole-of-finance reform agenda for the transition, where their Finance Ministers did not.
Leaders need to clarify their vision for the reform of the international financial architecture to dramatically scale up climate finance. This should reinforce and build on high-ambition proposals such as Barbados PM Mia Mottley’s Bridgetown Initiative and the V20’s Accra to Marrakesh agenda. It must include far-reaching reforms of multilateral development banks to expand their financing of global public goods, including climate as well as pandemic preparedness.
Crucially, G7 Leaders need to acknowledge – and begin to address – the major trust deficit in many emerging markets and developing economies, which threatens to undermine global solidarity on climate. This must include a strong statement on the pressing need to resolve the immediate debt and liquidity crises facing many developing countries, which is undermining those countries’ abilities to support the low-carbon transition and meet the Sustainable Development Goals. In the medium term, G7 countries will need to commit to a new issuance of IMF Special Drawing Rights and their allocation to innovative financing platforms to accelerate the global clean economy transition. Such a move would create positive momentum for a high-ambition outcome from the France-India co-hosted Summit for a New Global Finance Pact in Paris in June.
These commitments need to be underpinned by the delivery of private finance at scale to support the climate transition everywhere, starting with low- and middle-income countries. G7 leaders need to redouble their efforts to design and implement tools that will enable the delivery of private finance, including through a globally harmonised disclosures framework, private sector transition planning, or revised prudential rules for banks and insurers to secure both their contribution and resilience to the transition.
Clean Energy Economy Action Plan
The G7 is finalising a Clean Energy Economy Action Plan to accompany the Leaders’ Communique, aimed at building reliable clean energy supply chains, deepening cooperation with low- and middle-income countries, driving decarbonization of hard-to-abate sectors, and scaling up investment in clean energy manufacturing and deployment.
While it is welcome that the G7 are discussing the role that international trade reforms, scaled-up public and private sector investment in resilient and sustainable clean energy supply chains, and alignment with internationally supported standards on labour practices and human rights should play in supporting decarbonisation, G7 leaders will need to provide more specifics about just how they intend to live into these objectives when they meet with leaders from Brazil, India, Indonesia and other developing countries at their summit in Hiroshima this weekend; otherwise, they risk seeing this initiative dismissed as just nice-sounding rhetoric without sufficient substance to back it up.
Available for comment
E3G experts are available for reaction, background and comment. Please reach out to them directly:
Alden Meyer, Senior Associate (multilateral climate and clean energy diplomacy, mitigation ambition, US policy & politics)
m: +1-202-378-8619, firstname.lastname@example.org
Camilla Fenning, Programme Lead (fossil fuel transition, coal phase-out, Southeast Asia and India)
m: +44 (0) 7961 047835, Camilla.email@example.com
Maria Pastukhova, Senior Policy Advisor (energy, gas including LNG, ammonia/hydrogen cofiring)
m: +49 (0) 157 779 195 58, firstname.lastname@example.org
Louise Burrows, Senior Policy Advisor (fossil fuel finance)
m: +44 (0) 786 480 2177, email@example.com
Sima Kammourieh, Senior Policy Advisor (G7/G20 finance ministers)
m: +49 (0) 160 9596 4443, firstname.lastname@example.org
Jonny Peters, Senior Policy Advisor (trade, CBAM, G7 Clean Energy Economy Action Plan)
m: +44 (0) 7954 201 039, email@example.com
Notes to Editors
- E3G is an independent climate change think tank with a global outlook. We work on the frontier of the climate landscape, tackling the barriers and advancing the solutions to a safe climate. Our goal is to translate climate politics, economics and policies into action. About – E3G
- For further enquiries email firstname.lastname@example.org or phone +44 (0)7783 787 863
- Watch a recording of today’s press briefing with E3G experts on How the G7 Leaders’ Summit can address climate, energy security, and economic instability.
- Receive occasional news and updates on geopolitical events via our WhatsApp briefing service E3G WhatsApp registration for journalists – E3G