Comment: There are troubling signs in Berlin and Tokyo that a promise to end foreign public finance for fossil fuel projects by the end of this year has been broken.
The recent G7 Energy, Climate and Environment Ministers’ commitment to end government finance for overseas fossil fuel projects by the end of 2022 was a huge milestone.
This means that Japan joins the G7 members, who already made an almost identical commitment at the UN Climate Conference 2021. This is significant. Japan is the second largest contributor of public finance for fossil fossil fuels, investing $11 billion each year in dirty overseas fossil fuel projects.
This commitment is also a welcome affirmation of the Glasgow promise for other G7 members. Amidst worrying signals of backsliding – mainly from Germany and Japan – we urge the G7 to not water down the ministerial commitment at next week’s summit.
It is crucial to prioritise public finance for clean and efficient energy in order to reduce the climate crisis and meet our energy security and development requirements.
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G7 can make $33 billion per year to shift from fossil fuels towards clean energy by meeting its commitment. This would help meet at least the mitigation finance portion of the still unfulfilled promise to invest $100 billion annually in climate action in developing countries.
This shift is essential to meet energy security and other development goals. Clean energy solutions and energy efficiency solutions are the best short- and long-term options to build a safer, more secure and sustainable future. The commitment is not yet a done deal.
Recent weeks have seen signs of countries investing in LNG and gas to replace Russian supplies. According to Scholz, Chancellor Scholz stated that he is keen to pursue gas projects for Senegal. G7 negotiators representing other G7 nations have told us that Germany even attempts to weaken in this respect the official G7 text. This would make it less likely that Germany will be able to meet the 1.5C limit. The Japanese government seems to believe, despite its G7 promise, that it can continue funding upstream oil-and-gas projects.
For Germany’s new government, the first time G7 host, a weakening of the ministerial commitment to shift finance in the G7 leader’s statement would be a particularly bad look as well as for Japan. The Japanese government has played a key role in reducing the commitment, securing exceptions to help countries meet their national security goals and climate goals, but these would have the exact opposite effect.
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Japan will have to make a dramatic turn in order to meet its commitment not to finance fossil fuels until the end of this calendar year.
The Japanese government has been driving the expansion and development of gas infrastructure throughout Asia and worldwide. Japan’s Asia Energy Transition Initiative (AETI) was announced last May. It provides $10 billion in financial support for developing 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 is now planning a feasibility study on utilising ammonia at the Suralaya coal-fired power station. This Suralaya complex is next to the controversial Jawa 9 & 10 coal plants, where communities are already suffering from high levels of air pollution and damage to the sea and local fishing industry.
Prime Minister Kishida considers plans to export technology to capture carbon and co-fire ammonia at coal power plants “the key to decarbonizing while still using fossil fuels”.
Japan’s continued promotion of fossil fuel expansion threatens its own economy and energy security, especially in light of volatile gas prices. It also compromises the energy and climate security countries in Asia. Five of the top 10 countries with the highest climate risks are located in South Asia and Southeast Asia.
As G7 leaders gather, they must address the multiple crises facing us in the areas of energy security, climate change, and the war in Ukraine. To improve energy security, plans to focus on building new infrastructure for gas are not feasible.
Research shows that existing LNG infrastructure can be used to replace Russian supply. There are enough investments in energy efficiency and renewable energies. Clean energy solutions are easy to deploy without the price volatility, stranded assets risks and time required to build new fossil fuel infrastructure.
This moment demands unfaltering leadership, courage, and vision. The G7 ministerial pledge must not be diluted and should not be seen as another empty promise. G7 leaders need to be firm in their resolve to end public financing for fossil fuels offshore and to shift investment towards clean energy. This will help us build the peaceful, secure, equitable, and more energy secure future that we so desperately require.
Thuli Maama is Africa programme director at Oil Change International. Zenzi Suhadi serves as executive director at NGO WALHI National in Indonesia. Christoph Bals is the policy manager at Germanwatch.
Source: Climate Change News
