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Climate policy in general (Leaders’ para 18)• We are steadfast in our commitment to the Paris agreement, keeping a limit of 1.5°C
global temperature rise within reach through scaled up action in this critical decade,• We … highlight the increased urgency to reduce global GHG emissions by around 43
percent by 2030 and 60 percent by 2035, relative to the 2019 level, in light of its
latest findings.

• we call on all Parties - especially major economies - whose 2030 NDC targets orlong term low GHG emission development Strategies (LTSs) are not yet aligned with a
1.5°C pathway and net zero by 2050 at the latest, to revisit and strengthen the 2030
NDC targets and publish or update their LTSs as soon as possible and well before
UNFCCC-COP28, and to commit to net zero by 2050 at the latest.

• we call on all Parties to commit at UNFCCC-COP28 to peak global GHG emissions
immediately and by no later than 2025.
• “this decade” was repeatedly emphasized in IPCC AR6 SYR.

• “60% by 2035” was also mentioned in IPCC AR6 SYR. Parties need to submit the next
NDC with 2035 targets in 2025.

• “call on all Parties to publish LTSs to commit to net zero by 2050” rather than “aroundmid-century” as last year.

• “call on all Parties to commit to peak global GHG before 2025” is also new, which was
not seen last year’s G7 agreement.
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Various pathways toward a common goal (Leaders’ para

319 and 25)• We will engage with developing and emerging countries to accelerate emission
reduction, including by supporting their transitions to climate resilient, circular, andnature positive economies and net-zero GHG emissions through various andpractical pathways taking into account national circumstances.

• While acknowledging various pathways according to each country’s energy situation,industrial and social structures and geographical conditions, we highlight that theseshould lead to our common goal of net zero by 2050 at the latest in order to keep alimit of 1.5 °C within reach. In this regard, we invite the IEA to makerecommendations by the end of this year on options how to diversify the supplies ofenergy and critical minerals as well as clean energy manufacturing.

• Probably this is the most fundamental principle that the GOJ wanted to put forward inthis year’s G7. Important in particular for the Global South.
• IEA to make recommendations, perhaps building upon its ETP published this January.
This task-out to IEA was not included in Ministers’ communique.

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Phase-out of unabated fossil fuels (Leaders’ para 26)

4• We underline our commitment, in the context of a global effort, to accelerate thephase-out of unabated fossil fuels so as to achieve net zero in energy systems by 2050
at the latest in line with the trajectories required to limit global average temperatures to1.5 °C above preindustrial levels, and call on others to join us in taking the same action.
• The “phase-out of fossil fuels” was what the EU tried to agree at COP27 in vain.

• The above text obviously targets major-emitting emerging economies such as China. To bediscussed at G20 and COP28.
• It should be noted that it covers not only power generation but also energy in general.

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Natural gas and LNG (Leaders’ para 26)

5• It is necessary to accelerate the phase out of our dependency on Russian energy,
including through energy savings and gas demand reduction, in a manner consistent
with our Paris commitments, and address the global impact of Russia’s war onenergy supplies, gas prices and inflation, and people’s lives, recognizing theprimary need to accelerate the clean energy transition. In this context, we stress theimportant role that increased deliveries of LNG can play, and acknowledge thatinvestment in the sector can be appropriate in response to the current crisis and toaddress potential gas market shortfalls provoked by the crisis.
• Elmau last year also agreed a similar language on investment in the gas sector. But
this time around, the “context” is different; last year’s context was phase-out ofdependency on Russia, whereas this year “global impact” as well.

• Also investment can be appropriate to address not only the current crisis but also thefuture gas market shortfalls.
• The IEA report to G7, “Outlooks for gas markets and investment” contributed to thisagreement.

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Outlooks for gas markets and investment ①
IEA’s report to G7 (with IEEJ’s cooperation)

6• “Large variations in the supply and demand outlook in different scenarios and different
modelling frameworks highlight the uncertainties affecting natural gas and LNG markets.”• Backcast (NZE and most of APS, large dotted lines）vs. Forecast (STEPS, small dotted lines）

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Outlooks for gas markets and investment ②
IEA’s report to G7 (with IEEJ’s cooperation)

7• “in the STEPS and APS, new investments in upstream gas supply remain necessary…..
• “in emerging and developing economies…….investment in new LNG infrastructure isneeded in these scenarios,”

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Power system and coal power generation (Leaders’ para825)• We reaffirm our commitment to achieving a fully or predominantly decarbonized
power sector by 2035, and prioritizing concrete and timely steps towards the goal ofaccelerating the phase-out of domestic unabated coal power generation in amanner consistent with keeping a limit of 1.5°C temperature rise within reach and urgeothers to join us.

• We will work towards ending the construction of new unabated coal fired power
generation as identified in the IEA’s Coal in Net Zero Transitions report in 2022 as oneof the primary actions to be taken in line with the IEA net zero by 2050 scenario. We
call on and will work with other countries to end new unabated coal-fired power
generation projects globally as soon as possible to accelerate the clean energy
transition in a just manner.

• The first bullet point is basically the same as Elmau last year. No target year for phasingout domestic unabated coal power generation.

• The second bullet point, ending construction, is new. Slightly strengthened from“recognize the need” of Ministers to “work towards” as above.

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Hydrogen and its derivatives such as ammonia(Leaders’ para 25)• We recognize that low-carbon and renewable hydrogen and its derivatives suchas ammonia should be developed and used, if this can be aligned with a 1.5 °C
pathway, where they are impactful as effective emission reduction tools to advancedecarbonization across sectors and industries, notably in hard-to-abate sectors inindustry and transportation, while avoiding N2O as a GHG and NOx as air pollutant.
• We also note that some countries are exploring the use of low-carbon andrenewable hydrogen and its derivatives in the power sector to work towards zeroemission thermal power generation if this can be aligned with a 1.5°C pathway andour collective goal for a fully or predominantly decarbonized power sector by 2035.

• We affirm the importance of developing international standards and certification
including for a GHG calculation methodology for hydrogen production and mutualrecognition mechanism for carbon intensity-based tradability, transparency,trustworthiness and sustainability.
• For the first time in the history, ammonia was mentioned in the Leaders’communiques.

• Effective not only for hard-to-abate industry and transportation but also for power
sector.
• Clean hydrogen definition based upon not color but figures, i.e. carbon intensity.

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Renewable and nuclear (Leaders’ para 25 & 26)

10• 【Renewable】The G7 contributes to expanding renewable energy globally andbringing down costs by strengthening capacity including through a collective
increase in offshore windcapacity of 150GW by 2030 based on each country’s
existing targets and a collective increase of solar PV to more than 1TW by 2030…..
• 【Nuclear】Those G7 countries that opt to use nuclear energy recognize its
potential to provide affordable low-carbon energy that can reduce dependence on
fossil fuels, to address the climate crisis and to ensure global energy security as asource of baseload energy and grid flexibility. They commit to maximizing the useof existing reactors safely, securely, and efficiently, including by advancing their safe
long-term operation, in addressing the current energy crisis. They also commit,
domestically as well as in partner countries, to supporting the development andconstruction of nuclear reactors, such as small modular and other advanced
reactors with advanced safety systems, ….
• G7 renewable targets for the first time, but seem to be summing up each country’starget.

• Much more strong language on nuclear than Elmau, such as those highlighted above
and reference to Fukushima Daiichi.
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Road sector (Leaders’ para 19)

11• Considering the findings of the International Energy Agency (IEA)‘s Energy Technology
Perspective 2023, we also note the opportunity to collectively reduce by at least 50
percent CO2 emissions from G7 vehicle stock by 2035 or earlier relative to the levelin 2000 as a halfway point to achieving net zero and to track the progress on a yearlybasis.
• Ministers negotiated this text until the last minute.

• Japan’s road sector has to accelerate decarbonization to realize this opportunity.

• “Various actions” were highlighted, including Japan’s approach and synthetic fuels.

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Industrial Decarbonization Agenda (IDA) (Leaders’ para

1219)

• We also encourage and promote private entities' work to foster innovation
contributing to the emission reduction of other entities through decarbonization
solutions.

• We welcome the progress of the Industrial Decarbonization Agenda (IDA) that decided
to start working on implementation of the new Global Data Collection Frameworkfor steel production and product emissions.
• In their communique’s separate annex, Ministers also agreed that there is value inacknowledging “avoided emissions””. Ministers recommended “A shared,international standard for measuring avoided emissions”.

• Building upon the OECD and IEA reports on steel decarbonization, Ministers also
agreed the following: Recognizing the five existing methodologies,

 Recognizing the “net zero emissions measurement principles”,

 Begin implementing a Global Data Collection Framework for steel, Working with relevant forums such as IEA’s WPID, and Extending beyond G7.

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Transition finance (Leaders’ para 21)

13• We highlight the need for corporates to implement their net-zero transitions inline with the temperature goal of the Paris Agreement based on credible corporate
climate transition plans. We also highlight that transition finance, in line withkeeping a limit of 1.5°C temperature rise within reach, avoiding carbon lock-ins andbased on effective emissions reduction, has a significant role in advancing thedecarbonization of the economy as a whole.

• For the first time, transition finance was mentioned by G7.

• The latter sentence, which was taken from Finance Ministers’ communique, was evenstrengthened than that of Climate, Energy and Environment Ministers.

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G7 Clean Energy Economy Action Plan (Leaders’ para 27and separate statement)
I.
II.

Moving Forward United Climate Club, addressing carbon leakage

Maximizing the Impact of Incentives

 Transparency and coordination on G7 policies

III. Reducing Emissions Through Trade Policy Spurring markets to account for embedded emissions in traded goods

 Request OECD to explore approaches for computing carbon intensity of goods and services

IV. Establishing Resilient Global Supply Chains IEA’s report of its progress on clean energy supply chain by COP28

V.

 Ask IEA to produce a clean energy manufacturing roadmap leading up to a high-level international
workshop in 2023

Promoting Clean Energy Technologies

 Develop international standards for critical mineral markets through ISO
 Invite IEA to convene an international forum

VI. Promoting Trade and Investment in Clean Energy Goods and Services
 Work at WTO to promote a circular economy for clean energy goods and services

 Incentivize reducing embedded emissions in clean energy goods and services

VII. Support for Global Partners
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Critical minerals (Leaders’ para 29)

15• We reaffirm the growing importance of critical minerals in various fields, especiallyfor the global clean energy transition, and the need to manage economic andsecurity risks caused by vulnerable supply chains.
• Ministers agreed the following “Five-Point Plan for Critical Mineral Security”, which
was welcomed by Leaders.
Point 1: Forecast Long-term Supply and Demand Request IEA to establish a task force and undertake analysis

Point 2: Develop Resources and Supply Chains Responsibly Currently $13 billion fiscal support across G7

Point 3: Recycle More and Share Capabilities

 Facilitate environmentally sound management of e-Waste and recycle among developing countries
and like-minded countries

Point 4: Save with Innovation

 Innovation in resource-saving and substitute technologies

Point 5: Prepare for Supply Disruptions

 Support IEA’s “Voluntary Critical Mineral Security Program”

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Summary on Climate and Energy• PM Kishida at Hiroshima: “We commit to holistically addressing energy
security, the climate crisis, and geopolitical risks. We aim at a common
goal of net zero under various pathways depending on national
circumstances. Japan will support energy transition of regional partnercountries through AZEC.”• Minister Nishimura at Sapporo: “We, G7, could agree on the three points; 1)aiming at a common goal under various pathways, 2) working with Global
South, and 3) managing geopolitical risks.”• Behind the success, there were: A large number of workshops, evidence-based discussions among G7 experts
 Coordination with IEA, etc.

• IEA reports to G7: gas (with IEEJ’s cooperation), steel, hydrogen, renewable, energy efficiency,
CN pathways for ASEAN (with IEEJ’s cooperation)• OECD (steel), IRENA (offshore wind)

Contact : report@tky.ieej.or.jp
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