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.
