June, 28 2022, 11:59am EDT

For Immediate Release
Contact:
Nicole Rodel, nicole@priceofoil.org
Laurie van der burg, laurie@priceofoil.org
CSOs Condemn G7 Leaders for Caving in to Gas Industry and Weakening Pledge to End International Public Finance for Fossil Fuels
New G7 statement must not jeopardize full shift of USD 33B away from fossil fuels to climate and development solutions.
WASHINGTON
Today, German Chancellor Olaf Scholz and other G7 leaders watered down a commitment made in May by their energy, climate and environment ministers to end international public finance for fossil fuels by the end of this year, drawing a swift rebuke from climate and development campaigners. Civil society leaders had been urging the G7, and specifically Germany and Japan, to stand by the ministerial commitment and fully redirect their fossil fuel finance to clean energy and energy efficiency solutions that are best positioned to deliver on energy security, development, and climate goals.
Six out of seven G7 members had already adopted a near-identical commitment to shift public finance at the 2021 UN climate conference. The ministerial commitment was notable for adding Japan. This is significant as Japan is the second largest provider of international public finance for fossil fuels, pouring $11 billion into dirty overseas fossil fuel projects each year.
Today's G7 leaders' statement adds new loopholes to the commitment and says that "with a view to accelerating the phase out of our dependency on Russian energy ... investment in [LNG] is necessary" and that "publicly supported investment in the gas sector can be appropriate as a temporary response". Soon after the G7 ministerials, signals already emerged of countries backsliding on their commitment. Japan claimed it could continue financing upstream oil and gas projects despite the G7 pledge, and Germany's Chancellor Scholz stated that Germany wants to "intensively" pursue gas projects in Senegal -- a stance of particular concern as they are this year's G7 host.
Campaigners flag that next to undermining climate and development goals, investments in new gas infrastructure do not provide a viable solution to rapidly reducing Russian fossil fuel imports as they take years to build and do not support energy security in the long run. This also means that they do not provide an effective temporary response. Today's statement risks jeopardizing the opportunity to shift at least USD 33 billion a year in influential fossil fuel support from the G7 governments. However, CSOs will stand ready to hold the G7 accountable and ensure they do not derail efforts to end public finance for fossil fuels and shift it to clean energy with new investments in gas.
In response, experts at Oil Change International and partner organizations issue the following statement:
- Laurie van der Burg, Co-lead Global Public Finance Campaign, Oil Change International, said: "Today the G7 under the leadership of Chancellor Scholz has prioritized filling the pockets of the fossil gas industry over protecting peoples' lives. The G7 leaders' weakening the ministerial pledge to end public finance for fossil fuels by the end of this year cannot be allowed to turn into a huge missed opportunity to shift $33 billion a year to real solutions. Investing in new gas infrastructure is not a viable strategy to reduce Russian fossil fuel imports -- these projects take years to build and do not support energy security in the long run. Renewable energy and efficiency solutions can be deployed faster, better serve development and energy access needs, and do not come with the stranded assets and financial stability risks of fossil gas. The G7 caving in to fossil fuel interests is a bad look for Germany and must not derail parallel efforts to implement a near-identical commitment to end international public finance for fossil fuels adopted by 39 countries and institutions at the UN climate conference last year. We cannot afford this kind of backsliding. There are lives on the line and we will hold countries accountable."
- Nnimmo Bassey, Director, Director of Health of Mother Earth Foundation, said: "We are not surprised at the move by the G7 to invest in dirty and to serve the interest of the dirty fossil fuel industry instead of investing in clean renewable energy sources. Leaders of the G7 countries have been the main agents for polluting corporations, and they have worked together to scuttle climate negotiations, enthrone futile voluntary emissions reduction systems, promote false climate solutions, encourage land grabs, and expose vulnerable nations to extreme harms. History must hold these leaders accountable for acting to set Africa and other vulnerable regions on fire, destroy resilience through holding back climate finance and generally dithering, and offloading a catastrophic future for the youths and upcoming generations."
- Ayumi Fukakusa, Climate and Energy Campaigner at Friends of the Earth Japan, said: "Japan's stubborn addiction to fossil fuels is undermining the urgent action we need for climate and energy security. This is just the latest example of Japan blocking climate action at the G7 and other international fora. As next year's G7 host, Japan must strengthen its commitment to phase out oil and gas finance and implement it with integrity in order to protect our planet."
- Svitlana Romanko, Stand With Ukraine coordinator, said: "Yet, world leaders still allow billions for Russian oil and gas to flow into Putin's bloody hands. An embargo on gold imports from Russia instead of a full and immediate embargo on Russian oil and gas and strict secondary sanctions is reluctantly insufficient. The weak political willpower of G7 to end their fossil fuel addiction has a deadly toll in Ukraine. In the last 3 days Russia has fired more than 60 missiles on Ukrainian cities, hitting residential buildings and malls and the number of victims is unimaginable. And it's not just about us, Ukrainians. This is urgent and necessary to make sure that Russian gas and oil reserves become permanently unrecoverable, stranded and cannot fuel more wars. We call on G7 leaders to speed up the investments into renewable energy, stop funding fossil fuel expansion and finally put public money where it needs to be - in a peaceful, prosperous and clean energy future for all."
- Collin Rees, United States Program Manager at Oil Change International, said: "This G7 declaration is an egregious betrayal of President Joe Biden's climate commitments. He came into office with promises of bold action and renewed U.S. climate leadership. So far, we've seen a disappointing lack of tangible progress, and this backtracking from the administration's recent pledge to help the world phase out fossil finance is simply unacceptable. Climate leadership means saying 'no' to fossil fuel colonialism and shifting rapidly to renewable energy for all."
- Alexandra Goritz, Policy Advisor, Germanwatch, said: "It is a blow to German climate leadership that Chancellor Scholz wanted to water down the Glasgow commitment and promote new gas fields abroad. Thus, attention was diverted away from the prospecting climate partnerships with India, Indonesia, Senegal, and Vietnam that can have transformational potential. However, the G7 text should not be considered as a free pass for gas investments. If at all, it is an exemption to the crucial Glasgow statement. What matters now is the real investment choices the G7 will make over the next months."
- Johannes Schroeten, Policy Advisor at E3G, said: "Chancellor Scholz' attempt to carve out large exemptions from the Glasgow statement on phasing out international public fossil finance has been averted - but only just. The integrity of the policy stands, but we need urgent clarification of timelines and investment criteria, beyond the empty notion of hydrogen-readiness. The G7 wasted their opportunity to accelerate the end of international fossil fuel public finance."
- Simone Ogno, Finance and Climate campaigner at Recommon (Italy), said:
"Italian Prime Minister Mario Draghi's words are outrageous. It's more than ten years that short-term needs prevail over long-term ones, and the result is unconditional power to the fossil fuel industry, with all the direct and indirect consequences that this entails: environmental devastation, global warming, social inequalities, armed conflicts and even wars, as the one un Ukraine right now. Increasing investments in oil and gas expansion leads us straight to a catastrophe of unimaginable proportions, and those who will pay at first the consequences will mainly be those same frontline communities already affected by fossil fuel colonialism. While in Europe, Italy included, gas prices stay high and more and more people are forced to choose between a meal and paying their energy bills. At the end of the day all of us will pay for this irresponsible decision to depend on fossil fuels." - Paul Cook, Head of Advocacy at Tearfund, said: "People in poverty around the world will pay the highest price for this backtrack by some of the wealthiest countries. The G7 could have ushered in a clean energy future but instead continue to add fuel to the climate emergency. Communities on the frontline of the climate crisis need decisive action, not weakened promises. There is no room for new fossil fuels in a safer, fairer future."
- Lucile Dufour, Senior Policy Advisor at the International Institute for Sustainable Development, said: "G7 governments have watered down their collective commitment to end international public support for fossil fuels, by extending the list of potential exemptions for gas projects. But investing in new long-lived gas infrastructure isn't an effective response to tackle the short term energy supply shortage, and isn't well suited to improve energy access in low- and middle-income countries. Accelerating the energy transition requires a full shift of international public finance towards cost-competitive and already available clean energy solutions. The G7 must urgently get back on track and live up to its promise to stop funding fossils by the end of 2022."
- Tasneem Essop, Executive Director, Climate Action Network, said: "The G7 countries have once again proved that they are morally bankrupt and have no real intention to solve the climate crisis and take responsibility for this crisis caused by their disproportionate use and relentless support for fossil fuels. It is simply selfish for high emitters to continue to squander the remaining, and rapidly diminishing, carbon budget beyond their fair share with their use of fossil fuels. Our collective energy security and peace is underpinned by a just and equitable transition to renewable energy and scaled up finance to those impacted by climate devastation and loss and damage."
Oil Change International is a research, communications, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the ongoing transition to clean energy.
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