The recent G7 Energy, Climate and Environment Ministers' resolve for end government finance for overseas fossil fuel projects by the end of 2023 would be a huge milestone.
It means that Japan joins another G7 members, which already adopted a near-identical commitment in the 2023 UN climate conference, in shifting its public finance to wash energy. This is significant. Japan is the second largest provider of public finance for fossil fuels, pouring $11 billion into dirty overseas fossil fuel projects every year.
The commitment is another welcome reaffirmation from the Glasgow promise for the other G7 members. Amidst worrying signals of backsliding – mainly from Germany and Japan – we urge the G7 not to water down the ministerial commitment at next week's summit.
Prioritising public finance for clean energy and efficiency is critical to mitigate the weather crisis and meet energy security and development needs.
By fulfilling its commitment, the G7 commitment can shift $33 billion each year from non-renewable fuels to wash energy. This would go a long way towards meeting a minimum of the mitigation finance area of the still unfulfilled pledge to invest $100 billion annually to aid climate action in developing nations.
This shift is also critical to meeting energy security and development goals as clean energy and efficiency solutions provide the best near and long-term options for building a more secure, sustainable and safe future. However, the commitment seems to not yet be considered a done deal.
In recent weeks there have been signals of countries potentially backsliding by purchasing gas and LNG to exchange Russian supply. Chancellor Scholz continues to be recorded saying that he intensively wants to pursue gas projects in Senegal. We hear from G7 negotiators of other G7 countries that Germany even tries to weaken in this regard the state G7 text which would undermine the fir.5C-limit. Japan government appears to think that, despite its G7 pledge, it may continue financing upstream oil and gas projects.
For Germany’s new government, the very first time G7 host, a weakening from the ministerial resolve for shift finance within the G7 leader's statement will be a particularly bad look as well as for Japan. Japan government has already played a critical role in watering down the commitment, carving out exceptions to purportedly help countries meet their climate goals and for national security, while these would have just the opposite effect.
Japan will have to create a dramatic u-turn to satisfy its resolve for end finance to all fossil fuels by the end of this season.
The Japanese government continues to be driving the expansion of gas infrastructure across Asia and globally. Last May, Japan announced the Asia Energy Transition Initiative (AETI), including $10 billion in financial support to build up LNG demand in Asia.
In April, Japan agreed to help the Indonesian government develop hydrogen, ammonia, and carbon capture for “realistic energy transitions.” Japanese Mitsubishi Heavy Industries has become planning a feasibility study utilising ammonia in the Suralaya coal-fired power station. This Suralaya complex is near the controversial Jawa 9 & 10 coal plants, where communities already are struggling with high amounts of air pollution and harm to the sea and local fishing industry.
Prime Minister Kishida considers intends to export technology to capture carbon and co-fire ammonia at coal power plants “the answer to decarbonizing while still using fossil fuels”.
Japan's continued promotion of fossil fuel expansion threatens its own economy and energy security, particularly in light of volatile gas prices. Additionally, it undermines the energy and climate security of nations in Asia. Five from the top countries using the highest climate risk are in South and Southeast Asia.
As G7 leaders come together, we need them to address the multiple crises we're facing around energy security, climate, food security and also the war in Ukraine. Intends to focus on building new gas infrastructure to enhance energy security are shortsighted.
Research implies that with plenty of investments in energy efficiency and renewable energy, and thru utilizing existing LNG infrastructure, you don't have for purchase of new LNG infrastructure to exchange Russian supply. Clean energy solutions can be deployed quickly without the price volatility, stranded asset risks and time necessary to develop new fossil fuel infrastructure.
This moment requires unfaltering leadership, courage and vision. The G7 ministerial commitment must not be watered down, and it must not be another empty promise. We want G7 leaders to face firm in their resolve for end public finance for overseas fossil fuels and also to shift investment to wash energy. This helps build the greater peaceful, sustainable, equitable and secure future we so faithfully need.
Thuli Makama is the Africa programme director for Oil Change International, Zenzi Suhadi may be the executive director at the Indonesian NGO WALHI National and Christoph Bals, is the policy director at Germanwatch
