Finally, there is a consensus among major forces regarding the coal phase-out of polluting fuel from energy generation. The recent G7 decision is considered as one of the key decisions in this regard.
The G7 Ministerial in Turin has agreed to phase out existing unabated coal power generation during the first half of the 2030s and make commitments to the COP28 deal.
However, the agreement fell short of making any new progress on the scaling up of climate finance. The agreement will be presented to G7 Leaders to sign off at a summit in June and sets the climate and energy agenda for the world’s most advanced countries.
Coal phase-out and NDCs:
The G7, responsible for 21% of global emissions, is under pressure to detail how they will respond to the outcome of COP28, which agreed to transition away from fossil fuels, triple global renewable capacity, double energy efficiency improvements, and unlock climate finance for low-income nations.
This year, governments are due to agree to a new climate finance goal at COP29 in Baku and prepare their national country climate plans (the Nationally Determined Contributions) ahead of a February 2025 deadline.
The G7 has agreed to measures to phase out inefficient fossil fuel subsidies, including promoting a common definition of inefficient subsidies and reporting progress towards phasing out inefficient subsidies by 2025 or sooner.
The agreement is likely to indirectly shape the Australian coal market, which accounted for 50% of the total coal imported by G7 countries in 2023.
The G7’s commitment to phase out domestic coal from its energy systems before 2035 ensures that the US and Japan will have a coal
phase-out date, though still several years delayed compared to its peers.
Questions remain on whether Germany will update its legal date 2038 in line with Scholz’s coalition government commitment of achieving coal phase out “by ideally 2030”. Japan has the highest share of coal in the G7 (32%), but is likely to argue that it is ‘on track’ to meet its own 2030 NDC.