Faster decarbonisation must accompany shift from Russian energy – G7 business groups

Efforts to replace fossil fuel imports from Russia must be accompanied by an "even stronger adoption of policies embracing the transition to decarbonisation and the green economy," said business associations from all G7 countries in a joint statement ahead of the leaders’ summit in Germany. Natural gas from other suppliers than Russia should be treated as a “transition fuel”, the so-called B7 (business-7) alliance said. The groups added that the G7 economies are “under severe stress” due to the war coupled with the resulting price pressures on oil and gas, on raw materials, and on agricultural commodities. The “climate club” concept, which will be discussed at the summit of heads of state and government in Schloss Elmau on 26-28 June, should aim at accelerating industrial decarbonisation while addressing carbon leakage concerns, they said. They urged all G7 countries to introduce carbon pricing ideally covering the same sectors and emissions, and discussing a “fair global carbon price floor”. Acknowledging that this would likely not happen soon, they called for identifying suitable common metrics that would allow the comparison of different climate policy efforts.

The Federation of German Industries (BDI) together with the employers’ umbrella association BDA and the Association of German Chambers of Commerce and Industry (DIHK) are coordinating the B7 during the German G7 presidency. The German government’s G7 agenda has been thrown off course by Russia’s war against Ukraine, but Chancellor Olaf Scholz says he is determined to keep climate policy as a top priority for the summit of the seven large economies in Bavaria on 26-28 June.