G7 Members Agree To Stop Financing New Coal Projects by 2022

G7 Members Agree To Stop Financing New Coal Projects by 2022

A number of key G7 members have agreed to stop financing new coal projects by 2022, signaling a clear shift from coal-based electricity generation from some of the world’s major economies. 

The announcement comes after a summit of the world’s G7 nations, which includes the United States, Britain, Canada, France, Germany, Italy and Japan, agreed that energy markets need to shift away from fossil fuel-based electricity generation in favour of renewables. 

The group issued a joint communique alongside the European Union, stating that “international investments in unabated coal must stop now.” 

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“We commit to take concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021, including through Official Development Assistance, export finance, investment and financial and trade promotion support.” 

“We commit to promoting the increased international flow of public and private capital toward Paris Agreement-aligned investments and away from high-carbon power generation to support the clean energy transition in developing countries… in this context, we will phase out new direct government support for carbon-intensive international fossil fuel energy, except in limited circumstances at the discretion of each country, in a manner that is consistent with an ambitious, clearly defined pathway towards climate neutrality in order to keep 1.5C within reach.” 

According to a report from the ABC, “coal is considered unabated when it is burned for power or heat without using technology to capture the resulting emissions, a system not yet widely used in power generation.” 

G7 Members Agree To Stop Financing New Coal Projects by 2022

Earlier in the week, the International Energy Agency published one of its clearest warnings yet, that in order to meet mid-century global warming targets, investments into new oil, gas or coal projects should be scrapped in favour of renewable energy projects. 

The IEA’s statement was no doubt a huge factor in the fact that G7 members agreed to stop financing new coal projects by 2022.

The G7 assembly is attempting to keep global warming figures under 1.5-degrees C, which they say is only possible if the financing of new coal projects is scrapped, and energy markets move quickly to decarbonise their operations well before 2030. 

It’s understood that Japan was initially reluctant to sign the agreement alongside other G7 nations. Japan is one of the world’s largest financiers of new coal-fired power plants alongside China. 

The Japanese delegation raised concerns that if they stopped financing coal-fired electricity generation projects, particularly in the developed world, China would likely rise to the task and finance projects that were actually less sophisticated and more polluting than Japan’s designs. 

President of the COP26 climate summit, Alok Sharma praised the move, stating that transitioning away from coal-based electricity generation is a “personal priority,” while calling for a move to be made from the United Nations’ upcoming summit to “consign coal to history.” 

The U.S. envoy for climate change, John Kerry has said that the United States will move to phase out unabated coal-fired power generation, which will mean investments in carbon capture and storage technologies. 

He said after the summit that “I will strongly recommend to the president that this is a policy that we should pursue… But I guarantee that we will be completely consistent with 1.5C. 1.5C governs the choices we have to make in the next 10 years; any decision has to be within that framework,” he said. 

Deputy secretary-general of the United Nations, Amina Mohammed has said that “we are running out of time to bend the emissions curve and cut emissions by 45% globally by 2030, and that’s from 2010 levels.” 

“This means all main emitters must deliver enhanced NDCs this year with concrete and credible targets that we can follow through to 2030. Important investments in the targets we set for 2030 will determine the outcome of credibility of the 2050 targets. And it means no new coal starting now, phishing out coal in OECD countries by 2030, and the rest of the world by 2040.” 

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