Germany Pushes for G-7 Reversal on Fossil Fuels in Climate Blow
Sat, June 25, 2022
(Bloomberg) --
Germany is pushing for Group of Seven nations to walk back a commitment that would halt the financing of overseas fossil fuel projects by the end of the year, according to people familiar with the matter. That would be a major reversal on tackling climate change as Russia’s war in Ukraine upends access to energy supplies.
A draft text shared with Bloomberg would see the G-7 “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis.”
The caveat in the proposal is that such funding is done “in a manner consistent with our climate objectives and without creating lock-in effects.”
The text remains under debate and could change before G-7 leaders hold their summit in the Bavarian Alps starting Sunday hosted by Chancellor Olaf Scholz. The UK opposes the proposal, two of the people said. A German government spokesman declined to comment.
A person familiar with the discussions said Italy wasn’t actively opposing the German proposal. Italy, like Germany, is highly dependent on Russian gas. On Friday, speaking during a press conference in Brussels, Prime Minister Mario Draghi said Italy has managed to reduce Russian gas imports from 40% last year to 25% at the moment. This has been possible also by signing new gas deals in countries including Congo, Algeria and Angola.
A government spokesperson said Italy did not support Germany’s idea.
Asked about the proposal on Air Force One as US President Joe Biden flew to Europe, National Security Council spokesman John Kirby said he did not want to preempt discussions at the summit. “Our position last May was that the president was clear that he did not feel like these investments were the right course of action,” he told reporters. “I know of no such change to that policy.”
Canada, the world’s sixth largest energy producer, has shown it’s willing to support new fossil fuel infrastructure if it fits within the country’s overall emissions reduction plan, a senior official said. But the official would not say if Canada supports the language in the German proposal, stressing it’s a preliminary document.
The debate comes as Europe in particular struggles for alternative sources of fuel to Russian gas. The German government has warned that Russia’s moves to limit supply risk a Lehman-like collapse in the energy markets, with Europe’s largest economy facing the unprecedented prospect of businesses and consumers running out of power.
Germany has responded to the cuts by reviving coal plants and providing financing to secure gas supplies, while continuing with plans to phase out nuclear energy. The World Nuclear Association, an industry lobby group, is urging the G-7 to boost access to nuclear technologies.
Germany Warns of Lehman-Like Contagion From Russian Gas Cuts
Italy has said it will monitor the potential need to trigger emergency energy plans. Any such move could also see it boost coal production.
A G-7 shift from a commitment initiated last year and firmed up in May would be a u-turn in global efforts to fight climate change. It would make it harder to rally the rest of the world around more stringent targets and direct investments toward cleaner sources of energy.
It would also go against International Energy Agency advice that no new oil and gas projects should be developed if the world is to limit global warming to 1.5 degrees Celsius.
G-7 ministers, in making their commitment to end direct international financing of fossil fuels by the end of 2022, acknowledged for the first time that fossil fuel subsidies were incompatible with the Paris Agreement. The group also reaffirmed a commitment to end “inefficient” fossil fuel subsidies by 2025.
The ministers acknowledged, however, that investment in the LNG sector was a necessary response to the current crisis “in a manner consistent with our climate objectives and without creating lock-in effects.”
“This would be a huge setback from the progress we made last month at the G-7 energy and environment ministers when we finally brought Japan, the last G-7 holdout, into the commitment to end such financial support for fossil fuels,” said Alden Meyer, a senior associate at climate change think E3G.
“Where we saw Chancellor Merkel being the climate chancellor at the last G-7 summit Germany hosted, Scholz could go down in history as the climate backtracking Chancellor, which I think would be a real mark on his record, and we don’t need to do this,” he added.
Mon, June 27, 2022
By Makiko Yamazaki and Kate Abnett
TOKYO/BRUSSELS (Reuters) - Japan is pushing to remove a target for zero-emission vehicles from a G7 communique expected this week, according to a proposed draft seen by Reuters, a move that would water down language on climate change from the leaders' summit in Germany.
The pressure from Tokyo, an influential member of the Group of Seven rich nations, comes as the Japanese auto industry has faced scrutiny from green investors who say it has been slow to embrace zero-emission vehicles and lobbied against regulations that would encourage quicker transition to the technology.
Reuters reported last week that Toyota Motor Corp's head lobbied the Japanese government to make clear it supported hybrid vehicles as much as zero-emission battery electrics. G7 leaders are meeting in the Bavarian Alps for a summit where climate change figures on the agenda.
Japan has proposed removing a reference to a "collective goal of at least 50% zero-emission vehicles by 2030", according to a draft of the communique reviewed by Reuters.
In its place it has proposed a less concrete target of "significantly increasing the sale, share and uptake of zero-emission light duty vehicles recognising the range of pathways that members are adopting to approach these goals", according to the draft.
A person familiar with the matter confirmed that Japan had proposed the changes, declining to be identified because of the sensitivity of the issue. It was not clear whether the proposed changes would be in the final version of the communique, which is due to be released at the end of the summit on Tuesday.
Japan's foreign ministry said it was not immediately able to comment.
AUTO INDUSTRY WANTS RANGE OF OPTIONS
Separately, Japan had pushed to remove a goal for all new car and van sales in G7 countries to be "zero emission vehicles" by 2035, in the G7 climate ministers' communique in late May, according to sources familiar with the discussions and a draft communique seen by Reuters.
Ultimately the 2035 target was not included in the final statement, which pledged instead to achieve a "highly decarbonised road sector by 2030" by "significantly increasing" zero-emission vehicle sales.
Reuters reported last week that Toyota Motor Corp's head lobbied the Japanese government to make clear it supported hybrid vehicles, which burn fossil fuels, as much as zero-emission battery electrics.
Both Japan's auto industry lobby and leading automaker Toyota say automakers should not be limited to specific technologies and needed to keep a range of options towards reaching a goal of carbon neutrality by 2050.
Toyota, the world's biggest automaker by sales, has said fossil fuels, not internal combustion engines, are the problem. As well as the hybrids it popularised more than two decades ago with the Prius, it also champions hydrogen technology, although that has so far not caught on the way battery-electric cars have.
Energy and climate think-tank InfluenceMap has rated Toyota the worst among major automakers for its lobbying record on climate policy, which includes public statements and interaction with governments.
(Reporting by Makiko Yamazaki in Tokyo and Kate Abnett in Brussels; Additional reporting by Kiyoshi Takenaka; Editing by David Dolan and Alex Richardson)
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