G7 climate ministers drop language on growing LNG demand in draft

(Reuters) - Climate ministers of the Group of Seven countries have backtracked for now on earlier language touting growing future demand for liquefied natural gas (LNG), instead noting there may be "considerable uncertainty" for consumption.

A previous draft communique for this week's meeting of G7 climate change and energy ministers had called for "necessary upstream investments in LNG and natural gas" amid the energy fallout from Russia's invasion of Ukraine and said "demand for LNG will continue to grow".

But, as negotiations over the communique resumed on Tuesday ahead of the ministerial meeting on April 15-16 in Sapporo, Japan, the wording was changed, the latest draft reviewed by Reuters showed.

"We recognize that, based on the IEA's (International Energy Agency) analyses, there would be considerable uncertainty for future demand of natural gas and LNG and consequently there are risks of supply and demand gap to be addressed," the document dated April 5 said.

The draft also altered the earlier language on LNG and gas investments to say they would be needed to "bridge the gap in a manner consistent with our climate objectives and commitments."

It added a line saying, "Furthermore we will accelerate the clean energy transition through energy savings and gas demand reductions in the process of decarbonization."

It was not clear from the document why the language was changed. But Italy, Germany, France and the European Union had opposed the initial proposal on LNG demand increasing, the draft showed.

An official dealing with international affairs at the Japanese industry ministry declined to comment on the draft, saying the negotiations are ongoing.

Scientists and analysts have warned that new fossil fuel investments would negate globally agreed climate change goals.

Japan plans to keep LNG as a transition fuel for at least 10-15 years, and many Japanese companies are exposed to super-chilled gas projects globally.

The document may still change before it is adopted. The latest text showed countries are still at odds over other issues.

The EU, the United States and Japan have opposed a proposal by Britain to commit to phase out domestic unabated coal power generation by 2030 and call for the global pipeline of new coal plants to be cancelled, the latest draft showed.

Japan wants to start widely co-firing ammonia in its coal-fueled power plants as a way to reduce CO2 emissions, and is seeking the endorsement of other G7 countries for this plan.

The latest draft acknowledged that some countries plan to use "hydrogen and its derivatives" - which include ammonia - to cut power sector emissions in line with limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit), wording that would be a win for Tokyo.

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