Today, ahead of the G7 Climate, Energy and Environment Ministerial meeting this weekend in Japan, the International Energy Agency (IEA)released analyses to inform the G7 energy agenda, including on the outlook for fossil gas.
In response, some news coverage mistakenly suggested that the IEA has altered its previous finding that, in its 1.5ºC-compatible Net Zero Emissions (NZE) energy scenario, no new gas or oil fields should be developed, given existing supply is more than enough to meet demand. In reality, the IEA analysis published for the G7 merely summarizes and builds on the same scenarios the IEA published in its 2022 World Energy Outlook (WEO), reaching the same conclusions. The IEA reaffirms in today’s gas report that, “In the NZE Scenario, the reductions in natural gas demand are sufficiently steep that it is possible to meet them, in aggregate, by continued investment in existing assets and already approved projects.”
The IEA’s analysis further reinforces that gas demand is expected to decline in advanced economies, which include the G7, across all scenarios. Furthermore, to hold global warming to 1.5ºC, the IEA analysis shows that even those liquefied natural gas (LNG) projects already under construction should remain unutilized and existing LNG capacity will need to be decommissioned early.
These findings are particularly timely as drafts of a text to be agreed by G7 Ministers this weekend suggest they might endorse new gas investments, which according to the IEA are incompatible with 1.5ºC. Support for new gas investments would also directly contradict last year’s G7 commitment to end international public finance for fossil fuels by the end of 2022.
Kelly Trout, Research Co-Director at Oil Change International, had the following statement in response:
“Analysis by the IEA clearly shows that fossil gas must be phased out rapidly, with rich countries in the lead, if the world is to hold global warming to 1.5 degrees and stave off escalating climate devastation. There’s simply no justification for any G7 country to permit or finance a single new gas field, LNG terminal, or gas power plant, when renewable and just energy solutions are the keys to climate stability, energy security, and universal energy access.
Laurie van der Burg, Campaign Manager Global Public Finance, Oil Change International:
“Last year, the G7 made a groundbreaking commitment to end international public finance for fossil fuels by the end of 2022 and instead prioritize finance for clean energy. Today’s IEA analysis reinforces that for the G7 not to jeopardize the 1.5ºC global warming limit, they must not backslide on this commitment by endorsing new gas investments. Instead, the G7 must reiterate and uphold last year’s commitment to end this financing. Doing so offers them an opportunity to increase their clean energy finance to USD 34 billion a year, a sum almost big enough to close the energy access financing gap. This is critical not only to meet climate targets but also to bring down soaring energy costs, increase energy security and avoid stranded assets as global gas demand drops.”
Susanne Wong, Asia Program Manager, Oil Change International
“As G7 President, Japan should be leading efforts to end fossil fuel finance and support the urgent transition to renewable energy. Instead, Japan is doubling down on fossil fuels and is using the G7 to promote Japanese industry, undermining meaningful action to mitigate the climate and energy crises.”
- G7 public finance for fossil fuels between 2020 and 2022 totaled at least USD 73 billion, which is 2.6 times their clean energy support over the same period. Read more in our latest Oil Change International briefing: “G7 countries can shift billions into clean energy if they strengthen their commitment to end international fossil finance”