G-7 Agree to Fossil Fuel Phase-Out Without Coal Exit Deadline

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(Bloomberg) — Leaders of the world’s most developed economies reached a deal to accelerate the phase-out of unabated fossil fuels but failed to agree on a deadline to exit coal and left the door open for new natural gas investments.

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The Group of Seven said it would “accelerate the phase-out of unabated fossil fuels so as to achieve net zero in energy systems by 2050,” according to a draft of a communique seen by Bloomberg dated April 16. The group’s energy and environment ministers are meeting in the northern Japanese city of Sapporo this weekend and expected to release an official statement Sunday, although language around fossil fuels is believed to have been finalized, people familiar with the matter said.

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The G-7 have appointed themselves leaders in the global mission to decarbonize and the communique sends an important political signal that sets the tone for energy and climate conversations for the rest of the year. Failure to agree on a timeline to exit coal may weaken resolve ahead of a critical UN climate summit in Dubai later this year — COP28 — where nearly 200 nations will be pressed to phase out the fossil fuel. 

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“Investment in the gas sector can be appropriate to help address potential market shortfalls” provoked by Russia’s invasion of Ukraine if they are “implemented in a manner consistent with our climate objectives and without creating lock-in effects,” the G-7 said in the draft communique seen by Bloomberg. The document is not the final version and there may yet be changes. 

In earlier drafts, Japan had called for support for upstream investment in LNG and natural gas. French Energy Minister Agnes Pannier-Runacher told reporters Saturday on the sidelines of the meeting that a compromise was reached which “implicitly means that we cannot invest in the exploration of new gas capacity.” 

The Sapporo meeting is a precursor to the annual G-7 summit for world leaders, which Japanese Prime Minister Fumio Kishida will host in Hiroshima next month.

—With assistance from Takashi Umekawa.