G7 Fossil Fuel Funding Pledge a 'Massive Win,' Say Climate Groups

Stressing that concrete action--not just lofty rhetoric--is still needed, climate groups cautiously applauded G7 climate ministers on Friday for vowing to cut off new public financing for fossil fuels by the end of the year, a move that would help tackle a major source of oil and gas industry funding.

A 39-page communique issued Friday by the environment ministers of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States pledges to end "new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited circumstances clearly defined by each country that are consistent with a 1.5degC warming limit and the goals of the Paris Agreement."

"The most viable pathway to energy security is prioritizing public finance for clean energy."

"We remain convinced that the most important contribution towards energy security is an accelerated and prudently managed clean energy transition and are steadfastly committed to pursuing this," the ministers declared.

While wary of the exceptions and other potential loopholes embedded in the document, Laurie van der Burg of Oil Change International (OCI) said in a statement the communique marks "a massive win" for the global push to end taxpayer-funded financial support for fossil fuels and shift those resources to clean energy, a necessary step toward driving down planet-warming emissions.

Between 2018 and 2020, according to recent research by OCI and other climate groups, G7 countries provided more than $100 billion in public support for fossil fuels--four times the amount of funding they directed to renewable energy development during that period.

"In the context of Russia's fossil-fueled war and signs that some of the G7 members who agreed to end their public fossil finance last November may backslide by pursuing new gas investments, this statement is a timely reconfirmation that the most viable pathway to energy security is prioritizing public finance for clean energy," van der Burg said Friday.

"These promises should now urgently be turned into action," she added. "Strong implementation is needed--both for the G7 to shift their $33 billion a year in fossil fuel finance and for them to be able to encourage even more countries to join them."

Ayumi Fukakusa, climate and energy campaigner from Friends of the Earth Japan, stressed the significance of Japan joining the G7 pledge, given its previous resistance to such commitments and its status as the world's second-largest provider of public finance for fossil fuels--coal in particular.

"However, Japan has a bad track record of implementing its commitments," Fukakusa noted. "Last year, the G7 committed to end new direct government support for international coal power projects by the end of 2021, but Japan still intends to support two new coal projects in Indonesia and Bangladesh. Japan must implement its commitments with integrity to shift the actual flow of money."

The new communique comes months after the U.S. and more than 20 other countries across the globe vowed to stop taxpayer support for international fossil fuel projects by the end of 2022.

During their meeting in Berlin on Friday, the G7 environment ministers also pledged to decarbonize their electricity sectors by 2035 and voiced support for "an accelerated global unabated coal phase-out."

As the Financial Timesnoted, the commitment "represents a significant move by G7 member states Italy, Japan, and Canada, which have been slower than members such as the U.K. and Germany when it comes to pledging to ditch coal from power generation."

"The U.S. and Germany already had a 2035 target for zero-carbon electricity," FT added, "and the U.K's target is earlier."

While committing to substantial climate action over the next decade and beyond, the G7 ministers simultaneously called on the Organization of the Petroleum Exporting Countries (OPEC) to pump more oil in the short term to "respond to tightening international markets" amid Russia's ongoing assault on Ukraine.

That call came despite a recent study warning that continued oil and gas production--particularly in rich countries--is imperiling efforts to limit global warming to 1.5degC by the end of the century.

"There are no exceptions; all nations need to begin a rapid and just phaseout of existing production," the March analysis states. "There is no capacity in the carbon budget for opening up new production facilities of any kind, whether coal mines, oil wells, or gas terminals."