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G-7 countries to stop funding fossil fuels projects

G-7 countries to stop funding fossil fuels projects

The Group of Seven (G-7) major countries are heading to withdraw from the commitment to stop financing fossil fuel projects abroad by the end of this year, a proposal that is currently being viewed positively by the majority of members, according to sources familiar with the matter.

The leaders of the G-7 countries held a meeting in the Bavarian Alps regarding the growing role of gas projects, following the Russian invasion of Ukraine, which resulted in a shortage of their energy supplies.

French President Emmanuel Macron was among those who supported financing modern fossil fuel projects during a meeting with African leaders on Monday.

“In the current situation, we will have short-term requirements that will require huge investments in gas infrastructure in developing countries and other locations,” Italian Prime Minister Mario Draghi said last Sunday.

The updated text of the leaders’ statement, seen by Bloomberg News, notes the important role that LNG shipments could play in mitigating potential pipeline gas supply disruptions, particularly in European markets.

The text reads: “Leaders recognize that government-backed investment in the gas sector is necessary as a temporary response to the current energy crisis if implemented in a manner consistent with our climate goals and without causing the impacts of a single resource constraint.”

The German government warned that Russia’s supply cuts risked a Lehman-style collapse in energy markets, and Italy rushed to sign modern energy deals with African countries.

A high-ranking official from the French presidency told reporters that what is stipulated is to allow investments in gas in the near-to-medium term on an exceptional basis given the conditions while maintaining full climate targets as set during the UN Climate Change Summit for the year 2021.

Abandoning the commitment to halt funding for fossil fuel projects – which was adopted last May despite the energy crisis caused by the war – continues to be a setback for global efforts to combat climate change. Such a measure would make rallying the rest of the world around tougher targets and directing investments toward cleaner energy sources difficult.

They decided to continue efforts to reduce it to 1.5 degrees Celsius, the same levels that were agreed upon in Paris, and agreed upon again during the UN Climate Change Conference in November of 2021.

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