According to civil society organisations Oil Change International and E3G, the G7 countries, the US, Japan, which hosts the group’s summit this year, Italy and Germany are still falling short of their commitment to end new direct international public financing of unconstrained fossil fuel use. In May 2022, G7 climate and environment ministers reiterated a commitment by 39 countries made at the 2021 UN climate conference Cop 26 to end public financing of unburned coal, oil and gas projects by the end of 2022. The G7 countries are Canada, France, Germany, Italy, Japan, the UK and the US. The organisations said progress had been made in shifting billions of international public finance from fossil fuels to clean energy, adding that new and existing policies in Canada, the UK and France “largely deliver” on the Glasgow and G7 pledges. But they added that Japan and Germany had yet to publish policies to meet their commitment, while Italy’s policy did not. All three countries, as well as the US, missed the 2022 deadline. The US had adopted some guidelines but had not published them, the two civil society organisations said. The civil society organisations said the G7 had an opportunity to accelerate the energy transition by meeting its commitment, adding that climate and energy ministers meeting in Japan this weekend “need to reiterate and strengthen” their public finance target and avoid language that encourages investment in gas and LNG. The G7 economies added a caveat to the commitment last year that “publicly supported investments in the gas sector may be appropriate” to reduce dependence on Russian gas. Japan has been “actively pushing” for LNG investment this year, although it has “met with resistance” from the EU, Canada, the UK and the US, the groups said. Oil Change International and E3G found that G7 international public finance for fossil fuels reached at least $73 billion in 2020-22, compared with $28.6 billion for clean energy in the same period. The bulk of the financing for fossil fuel projects – 82 percent – came from export credit agencies (ECAs). The groups also found that 28 percent of all G7 energy finance will go to gas in 2022-22 – $10 billion a year – “more than any other energy subsector”, with the majority of gas finance going to LNG. Japan and the US were the biggest supporters of LNG, providing 47 % and 47 % respectively. 20 % of all G7 funding went to LNG, they said. Another $8.6 billion a year went to oil and gas projects, they said, while clean energy financing reached $9.5 billion in 2020-22. “Canada, Japan and Italy provided the most international public finance for fossil fuels in 2020-22, providing an average of at least $10.5 billion, $6.9 billion and $2.9 billion annually,” Oil Change International and E3G said.

Caroline Varin