US, Japan, Germany miss G7 fossil fuel goal: Report

Market: Coal, Crude oil, Emissions, Natural gas
13/04/23

G7 countries the US, Japan — which is hosting the group's summit this year — Italy and Germany are still lagging behind their commitment to end new direct international public finance for unabated fossil fuels, according to civil society organisations (CSOs) Oil Change International and E3G.

G7 climate and environment ministers reiterated in May 2022 a pledge made by 39 countries at the UN Cop 26 climate conference in 2021, committing to end public financing of unabated coal, oil and gas projects by the end of 2022. The G7 nations are Canada, France, Germany, Italy, Japan, the UK and the US.

Progress has been made in shifting billions in international public finance away from fossil fuels and into clean energy, the organisations said, adding that Canada, the UK and France's new and existing policies "largely meet" the Glasgow and G7 promises.

But Japan and Germany have yet to release policies to meet their commitment, while Italy's policy does not meet the pledge, they added. The three countries, as well as the US, have all missed the 2022 deadline. The US has adopted some guidelines but has not made them public, the two CSOs said.

The G7 has the opportunity to accelerate the energy transition by delivering on their commitment, the CSOs said, adding that the group's climate and energy ministers meeting this weekend in Japan "must reiterate and strengthen" their public financing goal and steer clear of language supporting investments in upstream gas and LNG.

The G7 economies last year added a caveat to the commitment, saying "publicly supported investment in the gas sector can be appropriate" in order to reduce dependency on Russian gas.

Japan is "actively pushing" for investments in LNG this year, although this has been "met with resistance" from the EU, Canada, the UK and the US, the organisations said.

Oil Change International and E3G found that the G7's international public finance for fossil fuels reached at least $73bn in 2020-22, compared with $28.6bn for clean energy over the same period. The brunt of the funding for fossil fuel projects — 82pc — came from export credit agencies (ECAs). The organisations also found that, in 2022-22, 28pc of all G7 energy finance went to gas — $10bn/yr — "more than any other energy sub-sector", with the majority of gas finance going into LNG.

Japan and the US were the top supporters of LNG, providing 47pc and 20pc, respectively, of all of the G7's LNG finance, they said.

A further $8.6bn/yr went to oil and gas projects, they said, while clean energy finance reached $9.5bn in the 2020-22 period.

"Canada, Japan, and Italy provided the most international public finance for fossil fuels between 2020 and 2022, giving an annual average of at least $10.5bn, $6.9bn and $2.9bn, respectively," Oil Change International and E3G said.

By Caroline Varin

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22/11/24

Cop 29 goes into overtime on finance deadlock

Developing countries' discontent over the climate finance offer is meeting a muted response, writes Caroline Varin Baku, 22 November (Argus) — As the UN Cop 29 climate conference went into overtime, early reactions of consternation towards a new climate finance draft quickly gave way to studious silence, and some new numbers floated by developing nations. Parties are negotiating a new collective quantified goal — or climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The updated draft of the new finance goal text — the centrepiece of this Cop — proposes a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". This is the developed country parties' submission, the Cop 29 presidency acknowledged. Developing nations have been waiting for this number for months, and calling on developed economies to come up with one throughout this summit. They rejected the offer instantly. "The [$250bn/yr] offered by developed countries is a spit in the face of vulnerable nations like mine," Panama's lead climate negotiator, Juan Carlos Monterrey Gomez, said. Negotiating group the Alliance of Small Island States called it "a cap that will severely stagnate climate action efforts". The African Group of Negotiators and Colombia called it "unacceptable". This is far off the mark for developing economies, which earlier this week floated numbers of $440bn-600bn/yr for a public finance layer. They also called for $1.3 trillion/yr in total climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. China reiterated on 21 November that "the voluntary support" of the global south was not to be counted towards the goal. A UN-mandated expert group indicated that the figure put forward by developed countries "is too low" and not consistent with the Paris Agreement goals. The new finance goal for developing countries, based on components that it covers, should commit developed countries to provide at least $300bn/yr by 2030 and $390bn/yr by 2035, it said. Brazil indicated that it is now pushing for these targets. The final amount for the new finance goal could potentially be around $300bn-350bn/yr, a Somalian delegate told Argus . A goal of $300bn/yr by 2035 is achievable with projected finance, further reforms and shareholder support at multilateral development banks (MDBs), and some growth in bilateral funding, climate think-tank WRI's finance programme director, Melanie Robinson, said. "Going beyond [$300bn/yr] would even be possible if a high proportion of developing countries' share of MDB finance is included," she added. All eyes turn to the EU Unsurprisingly, developed nations offered more muted responses. "It has been a significant lift over the past decade to meet the prior goal [of $100bn/yr]," a senior US official said, and the new goal will require even more ambition and "extraordinary reach". The US has just achieved its target to provide $11bn/yr in climate finance under the Paris climate agreement by 2024. But US climate funding is likely to dry up once president-elect Donald Trump, a climate sceptic who withdrew the US from the Paris accord during his first term, takes office. Norway simply told Argus that the delegation was "happier" with the text. The EU has stayed silent, with all eyes on the bloc as the US' influence wanes. The EU contributed €28.6bn ($29.8bn) in climate finance from public budgets in 2023. Developed nations expressed frustration towards the lack of progress on mitigation — actions to cut greenhouse gas emissions. Mentions of fossil fuels have been removed from new draft texts, including "transitioning away" from fossil fuels. This could still represent a potential red line for them. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Opinion: Bridging the divide

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Cop: Brazil eyes $300bn/yr for climate finance goal

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22/11/24

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