Key highlights
- G7 energy ministers want countries to increase solar capacity to over 1 terawatt by 2030, responsibly boost new mines and supply chains for critical minerals, and reduce the use of natural gas as fuel across the world.
- G7 is committed to achieving net-zero emissions in the road sector by 2050 and phasing out fossil fuels to meet climate goals by prioritizing concrete and timely steps towards accelerating the phase-out of domestic, unabated coal power generation.
- Africa can play a role in critical mineral production and needs to expand its mining capacity to increase infrastructural capacity. Nigeria plans to remove fuel subsidies by June 2023.
On April 16, the Energy Ministers of G7 nations met in Japan ahead of the G7 summit scheduled to take place in Hiroshima from May 19 to May 21, 2023.
During the meeting, some topics were addressed, including those that directly impact the energy market in Sub-Saharan Africa. These topics are highlighted below.
Renewable energy
The G7 ministers want countries to increase their solar photovoltaic capacity to over 1 terawatt by 2030. The G7 also said it currently contributes to expanding renewable energy globally and bringing down costs by strengthening capacity.
Recall that the International Renewable Energy Agency (IRENA) had said that Africa could account for only 1% of renewable energy investments in 2022.
Critical minerals
According to the G7 Ministers, critical minerals are important for the energy transition. Therefore, there is a need to prevent economic and security risks caused by vulnerable supply chains, monopolization, and lack of diversification of existing suppliers of critical minerals.
The G7 also promised to responsibly boost new mines and supply chains for critical minerals to meet the rising demand. The Group said $13 billion fiscal support that can be used for domestic and foreign critical minerals projects is being prepared across the G7 countries.
Note that Africa can play a role in critical mineral production. During a Reuters conference in October 2022, the President of the Africa Finance Corporation (AFC), Samaila Zubairu said:
- “Africa needs to expand its mining capacity, more minerals should be sourced, mined, and processed here on the continent. More investments in adaptation will increase infrastructural capacity.”
Reduction in the use of natural gas
The energy ministers called for a reduction in the use of natural gas as a fuel across the world. According to them, countries should only resort to natural gas if it helps to address potential market shortfalls provoked by the crisis, subject to clearly defined national circumstances.
The report further noted that gas policy objectives should be implemented in a manner consistent with climate objectives and without creating lock-in effects.
This means that countries should ensure that their natural gas plans are a gateway to the use of hydrogen in the future.
Decarbonized transport
The G7 Ministers called for a highly decarbonized transportation system, stating that the goal to have net zero in the road sector by 2050 will be achieved. They highlighted some actions to be taken in the vehicle fleet, and infrastructure areas to achieve this goal. They said:
- “We recognize the range of pathways that G7- and beyond-G7 members are adopting to approach this goal. We are committed to the goal of achieving net-zero emissions in the road sector by 2050, and underline that a transition over the coming decade to infrastructure and a vehicle fleet that supports zero emissions transport is critical.”
Recall that Nigeria still imports gasoline-based vehicles despite establishing the National Gas Expansion Program (NGEP), which creates room for vehicles to run on compressed natural gas (CNG).
Phasing out fossil fuels
The G7 is committed to the complete phase-out of fossil fuels to meet climate goals. According to them, the Group will work to ensure that by 2050 at the latest. However, they agreed to prioritize concrete and timely steps towards accelerating the phase-out of domestic, unabated coal power generation, as a part of a commitment last year to achieve at least a predominantly decarbonised power sector by 2035. They said:
- “We underline our commitment, in the context of a global effort, to accelerate the phase-out of unabated fossil fuels to achieve net zero in energy systems by 2050 at the latest. We stress that fossil fuel subsidies are inconsistent with the goals of the Paris Agreement.”
It is important to note that Nigeria plans to remove fuel subsidies by June 2023. The World Bank has provided an $800 million loan that would be sent to 50 million Nigerians as a form of palliative to ease the socioeconomic burden to be created by the subsidy removal.