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May, June and July are busy months with international meetings and summits, where climate and clean energy strongly feature on the agendas. Some of the most high profile events are the G7 and G20 which have both addressed action on fossil fuel subsidies.

G7

On May 26-27, G7 leaders together with EU leaders convened in Taormina, Italy for the G7 summit. The meeting was convened in unusual circumstances – with a new and unpredictable US President that set numerous alarms around US withdrawing from the Paris Agreement.

While the tone was different from previous years, the G6 still maintained some language and commitments to international climate action, and the Statement from the G7 highlighted such a commitment.

Following the US decision to withdraw from the Paris Agreement, a G6 Environment Ministers Statement built more constructively on previous commitments to climate action and the clean energy transition. On fossil fuel subsidies specifically, the Statement commits to “contribute to the implementation of the commitment of our Heads of State and Government adopted in Ise-Shima in 2016 for the elimination of inefficient fossil fuel subsidies that encourage wasteful consumption by 2025.”

G20

The dynamics established at the G7 set an interesting stage for the upcoming G20 which will take place in Hamburg, Germany on July 8th. Led by another European country with a robust commitment to climate action, this summit will be an important space to encourage and solidify commitment from a broader set of countries to climate action and the clean energy transition.

The German G20 Presidency identified fossil fuel subsidies and carbon pricing as two key issues to make progress on within the scope of the climate and energy work.

While there has been consistent ambition from the German government, with the support of the EU, it is still it uncertain that any further progress will be made on the G20’s initial commitment to phase out fossil fuel subsidies. If we see any updated commitments, it will certainly be at the level of G19 rather than G20, following the dramatic change in the US position.

However, there is also a possibility of more vocal actors safeguarding the role of the G20 to address climate issues, including fossil fuel subsidies; for example, China, the EU, Canada and Mexico. Meanwhile, the peer reviews of Germany’s and Mexico’s fossil fuel subsidies have not been published.

Civil Society Summit

The C20 Summit takes place this weekend, June 18-19. The agenda will touch on a number of issues surrounding the G20 agenda, including sustainability. CAN Europe, together with Overseas Development Institute and Carbon Market Watch is organising a workshop on fossil fuel subsidies and carbon pricing on Sunday June 18th at 13.30. The workshop will look at carbon pricing and fossil fuel subsidy reform measures across different regions in the G20, discussing lessons learned and how to communicate the issues more effectively.

The Summit will present a final Communiqué to Chancellor Angela Merkel, citing key CSO concerns and demands.

Relevant publications from this year on G20 action to address climate change and the clean energy transition:

• Vulnerable 20 (V20) dialogue with the G20, Washington, April 23
• Businesses, civil society and think-tanks climate and energy working groups team up to make a joint statement towards the G20 on climate change
• Investors call on G20 end fossil fuel subsidies by 2020

 
In 3 legislative files currently negotiated in Brussels the European Parliament progressed on financing matters: reporting on Fossil Fuel Subsidies phase-out; the linking the EU budget comes to national climate ambitions; a climate impact assessment tool for EU investments; and a 40% climate earmarking target for the Juncker Investment Plan.
 
The rapporteurs in the Environment and Energy Committees, Claude Turmes (LU) and Michele Rivasi (FR) published their joint draft report on the Governance regulation on 17 May. The report introduces a provision that would require Member States to plan for and to report on their phasing out of fossil fuel subsidies via their National Energy and Climate Plans. The same report as well calls for the EU budget to play a crucial role in achieving high ambitions of national climate and energy objectives.
 
The requirement to undertake climate impact assessment of EU funds investments has been put into the European Parliament’s Environment Committee position on the Effort Sharing Regulation 30 May.
 
Finally, ECON and BUDG committees supported a 40% climate action target for the Juncker Investment Plan (European Fund for Strategic Investments - EFSI) for the period 2018-2020, accompanied with guidelines on how to ensure compliance with the Paris Climate Agreement of individual projects as well as the entire EFSI portfolio.
 
Files are still to be finalized and adopted in the Parliament and then negotiated with Member States.

EU DEVELOPMENTS

- Ends Europe: NGOs name and shame countries for fossil fuel subsidies. “These awards reveal that financial commitments are not consistent with Government promises to tackle climate change in line with the Paris Agreement. With the awards we expose a large amount of largely hidden subsidies for fossil fuels and call on all European Governments to phase them out urgently and no later than 2020. We also ask them to make their budgets 100% climate-friendly and implement the clean energy transition as soon as possible. They must put their people and environment ahead of polluting fossil fuels.”

- Politico: For peat’s sake. “Ireland has been awarded the gold medal at the European Fossil Fuel Subsidy Awards, a mock awards ceremony staged by Climate Action Network Europe and a coalition of NGOs.”

- Flux energie: Fossil Fuel Subsidies Awards’ winners revealed. “Nine European countries have been named and shamed today in a public fossil fuel subsidies awards ceremony in Brussels.”

- POLITICO: "EU BUDGET — GET READY FOR A FIGHT: Playbook’s source is preparing for a political cyclone, with EU national diplomats sure the debate over the EU budget will be a bumpy ride. “It’s going to be a real mess,” Playbook’s source said. “The Commission is trying very hard to keep the Future of Europe and Brexit discussions on different tracks. The EU budget is where those discussions merge.”
 
- POLITICO:  Tajani proposes ‘Copernican revolution’ in EU budget. “European Parliament President Antonio Tajani is drawing up proposals for a radical overhaul of the EU budget, which would slash sums devoted to its prime beneficiaries: farmers. Tajani’s plan, which also involves switching the budget cycle from seven years to five, would divert money towards security, immigration, youth unemployment and climate change,” report Giulia Paravicini and Simon Marks."
 
- POLITICO: "COUNCIL — SWEDEN SAYS NO EU FUNDS TO COUNTRIES THAT DON’T FOLLOW MIGRATION RULES: The Swedes want the EU budget to shrink post-Brexit, and they think there should be “consequences” for countries “not taking responsibility and following EU decisions, according to Prime Minister Stefan Löfven. Unfortunately for Sweden, according to a recent Jacques Delors Institute paper, the country is set to face the second-biggest hike in EU budget contributions thanks to Brexit.". Swedish government's press release: Smaller EU budget and Sweden’s contribution must be kept down – the Government’s general priorities ahead of the upcoming EU budget negotiations
 
- POLITICO: "Delay to post-2020 budget proposal: Oettinger called for post-2020 proposals to be tabled in 2018 rather than at the end of this year, to ensure greater clarity on Brexit negotiations and what the EU plans to do about the Future of Europe white paper. Meanwhile, POLITICO’s own Florian Eder reports the German government is pushing for those new rules to link EU cohesion funds to respect for democratic principles."
 
- POLITICO: Berlin looks into freezing funds for EU rule-breakers : Germany considers trying to link receipt of EU cohesion funds to respect for democratic principles
 
- EU Observer: Commission hints at political conditions for EU funds
The European Commission is preparing the ground for 'more conditionalities', at this moment linked to economic reforms and rule of law and closely linked to the European Semester and Country Specific Recommendations. This is not yet totally the set of climate action conditionalities, but both Oettinger's and the Germans proposals leave space for it.
  
- POLITICO: Oettinger wants to scrap all rebates in post-Brexit EU budget

- POLITICO: EU’s Jourová wants funds linked to new prosecutor’s office

- Euractiv: Scared of scarcity: Electricity utilities question EU free market plans: “Most of the experts agree today that the more distortions you introduce into the market at first – through coal subsidies and even renewables subsidies and other interference with the markets – the more difficult it will be for the market price to give a signal that stimulates investment.”

NATIONAL DEVELOPMENTS

CAN Europe is very happy to announce that the European Fossil Fuel Subsidy Awards' Ceremony on the 22nd of May announcing the results of the awards were very widely covered, with more than 60 different national media outlets from 11 european countries covering the awards!

All the national media coverage is accessible here.

Carbon Pulse: Carbon floor price could form part of new French climate plan as govt hires experts

INTERNATIONAL DEVELOPMENTS

- Carbon Brief: Explainer: The challenge of defining fossil fuel subsidies. “Just over a year ago, the G7 group of nations pledged to end all “inefficient fossil fuel subsidies” by 2025. This language disappeared from the latest annual G7 communique, signed in Sicily last month, while a similar G20 promise to end subsidies has no deadline.”

- Independent: A dissatisfactory G7. “The six-page final communiqué indicated agreements on (...) increased energy security, but no mention of ending inefficient fossil fuel subsidies by 2025 as per last year's G7.”

- Vox: Energy subsidy reform: Difficult yet progressing. “Despite a growing consensus in favour of reform of costly and environmentally damaging energy price subsidies, many countries remain resistant.”

- Geographical: Future of the Paris Climate Agreement – the expert view. “Every year, G20 governments provide £450billion of subsidies to fossil fuels, almost four times the amount for renewables.”

- Hellenic Shipping News: China’s Clean Energy Ambition Floats on Abandoned Coal Mine. “While Trump has said repeatedly he wants to stimulate fossil fuels and especially coal, China is funding a series of ground-breaking projects that generate power without pollution.”

- Yahoo News: China backed Asian Infrastructure and Investment Bank (AIIB). “Won’t finance coal-fired power plants”

- Tidal Energy Today: REN21 finds 2016 as record-breaking year for renewables. “The report has also revealed that fossil fuel subsidies continue to impede the progress of renewable energy.”

- Windkraft-Journal on the UNECE Renewable Energy Status Report 2017: Investment in renewable energy still lacking in 17 countries in South and Eastern Europe, the Caucasus and Central Asia. "Energy subsidies for fossil fuels persist in the region, presenting an additional obstacle for the deployment of both renewable energy sources and energy efficiency measures."

EUROPEAN

CAN Europe:

• The European External Investment Plan: The EU’s flagship initiative for external funding
• ETS: Waiting for the Trilogues
• Polish MEP misuses energy efficiency file to promote coal
• Letter to Selected Ministers of the EU Environment Council: the reformed ETS Directive and establishment of a Just Transition Fund
• Letter to EU Environment Council: exclusion of coal investments through ETS funds and support establishment of Just Transition Fund
• Letter to ETS Rapporteurs: Establishment of the Just Transition Fund and end of coal subsidies (art. 10c)
• MEPs improve the proposal for the Effort Sharing Regulation – the Council rather not
• Letter to MEPs: voting recommendations on the Effort Sharing Regulation

HEAL: Position paper Healthy Energy Paper

Counter Balance: European Parliament criticizes the Juncker Plan implementation

CEE Bankwatch:

• Balkan energy projects with Chinese involvement - state of play June 2017
• The Balkans may become the achilles heel of EU-China climate leadership

Friends of the Earth Europe: Real World Radio Europe #7: The people power behind a fossil free Europe

NATIONAL

CAN Europe: Winning a losing game: Turkey’s electricity utility gets a fossil fuel subsidy award for its role in coal expansion

CEE Bankwatch:

• A Bulgarian oligarch, tax avoidance and a village that tries to move: how Sofia fails to implement EU pollution laws
• The worst was yet to come - ludicrous air pollution in Romanian village

INTERNATIONAL

CAN International: Position paper on Implications of 1.5C & Zero-Carbon Goal by 2050 on Public Finance Institutions

"Key Message and Recommendations Under the Paris Agreement, 196 countries agreed to align financial flows with a pathway towards low-GHG, climate-resilient development. The UN Sustainable Development Goals (SDGs) of the 2030 Agenda aim for universal access to affordable, reliable, sustainable and modern energy and infrastructure by 2030. This CAN position paper outlines the role of public finance institutions (PFIs) such as Multilateral Development Banks (MDBs), other Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) in supporting countries in the zero-carbon, climate-resilient transition. The paper urges that:

• Public finance must be transformational, catalytic, inclusive and responsive;
• PFIs must apply precautionary principles in assessing the climate and development impacts of their policies and projects avoiding harm to people, nature and economy;
• PFIs must provide policy, technical and financial support to help countries transform their energy sectors to sustainable, efficient systems that prioritise energy access;
• PFIs must cease by 2020 direct, indirect, ancillary infrastructure and policy support for upstream and downstream fossil fuels, GHG-intensive projects, nuclear, large bioenergy and hydropower when more cost-effective and less damaging alternatives exist;
• All PFI investments must meet strict environmental and social development criteria and be assessed through a pro-poor, inclusive, climate-resilient and gender-responsive lens;
• All PFIs, beginning with OECD countries in 2017, should report annually on their progress in scaling back support for fossil fuel-related transactions.

This paper identifies a number of opportunities for PFIs:

• MDB country strategy revision processes provide an opportunity to integrate Nationally Determined Contributions (NDCs) and long-term strategies (LTS) for zero-carbon development under the Paris Agreement;
• Policy reforms lending can be strategically influential to usher in urgently-required energy and infrastructure sector policy reforms;
• Strengthening oversight over their financial intermediaries’ compliance with environmental and social frameworks, as well as gender and energy policy provisions would significantly reduce impacts on ecosystems and society by PFIs;
• The results framework for PFI energy investments could incorporate outcome indicators for alignment with the 1.5°C goal and the 2030 Agenda SDGs;
• All PFIs should initiate reports to present pathways for their operations to contribute to sustainable energy and development commitments of their stakeholder governments.

CAN calls on all PFIs to produce pathways to 1.5°C and Agenda 2030 for their respective operations by 2020 based on a synthesis of scientific advice and an assessment of social and economic development needs."

Climate Strategies, the Stockholm Environment Institute and the International Institute for Sustainable Development: Workshop on “Reforming Fossil Fuel Subsidies through the WTO and International Trade Agreements,” hosted at World Trade Organization headquarters in Geneva.

350.org

• Coal & Boat 2017 – Farewell to the Last Lignite Coal Power Plant in Berlin
• Climate camps and actions in Europe, summer 2017
• Global Divestment Mobilisation wraps up

Fossil Free:

• What a week(end)!
• It’s over, but it’s a whole new beginning!

WEBSITE

For an overview of the main national fossil fuel subsidies in Europe, click on the following map below (which you can also find on our website):

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BUILDING A COMMON NARRATIVE 

The voice against fossil fuel subsidies has internationally grown stronger the last couple of years - both among civil society and world leaders - but it is apparent that European decision makers don’t feel enough pressure to start putting their money where their mouth is. A united voice from NGOs and other actors will help to steer the debate in the right direction – towards enhanced and fair climate action.  CAN Europe is working with members and non-members across Europe to support the development of a strong, common narrative on phasing out public financial support for fossil fuels. What is your story? Make it heard! Contact: Nicolas Derobert