G7 pressed to make U-turn on fossil fuels
Germany wants G7 nations to backtrack on plans to stop financing overseas fossil fuel projects
Germany is seeking to convince other G7 nations to abandon a commitment to end direct international financing of overseas fossil fuel projects by the end of this year, Bloomberg reported on Saturday, citing people familiar with the matter.
Berlin is asking Group of Seven members to “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis,” according to a draft text shared with the agency.
The proposal reportedly remains under discussion and could be altered before Sunday, when the G7 summit kicks off in the Bavarian Alps, hosted by German Chancellor Olaf Scholz.
Britain opposes the proposal, sources said, while there were conflicting reports about whether the Italian authorities would support the plan.
Both Germany and Italy are highly dependent on Russian gas. Deliveries of Russian fuel to Germany through the Nord Stream 1 pipeline were recently reduced by 60% due to technical issues arising from sanctions imposed on Moscow over its military operation in Ukraine. The pipeline will also be shut down for 10 days in July for scheduled annual maintenance.
G7 ministers agreed on a plan to halt investment in overseas fossil fuel enterprises in May, as subsidizing such projects was incompatible with the Paris Agreement. However, they reaffirmed a commitment to end “inefficient” fossil fuel subsidies by 2025.
According to the G7 leaders, investment in the LNG sector came as a necessary response to the current crisis “in a manner consistent with our climate objectives and without creating lock-in effects.”