US, Germany propose India-G7 partnership to fund decarbonisation

INTERNATIONAL DESK: The United States and Germany, on behalf of the G7, have proposed setting up an India-G7 partnership to help fund and support India’s transition from a “fossil-based economy to a carbon-neutral economy”. Both countries are keen to announce the partnership at the G7 Summit, where India has been invited, later this month.

The idea, sources said, is to devise an India-specific ‘Just Energy Transition Partnership (JETP)’ taking into account India’s position on ensuring climate justice while addressing climate change challenges as well as its commitments on increasing the share of renewable sources in its energy mix. The G7 already has a similar $8.5 billion transition plan with South Africa, which has stated its intent to decommission coal-based power plants in lieu for lower emission alternatives.

The JETP paper for India, which is currently under consideration of the government, has suggested a two-phased approach. In the first phase, the focus would be on reducing India’s “carbon intensity” by deploying renewable energy in power generation. This would mean specific investments on modernisation of power grids, deploying energy storage besides introducing new green technology.

Also, the G7 has pushed the envelope on rolling back thermal plants currently in the development stage and gradually shutting down coal mines. Specifically, it has suggested that if India is agreeable, then “phase one could include reduction of the pipeline of coal-fired power plants currently under development… piloting just transition elements, such as coal-fired power plant conversion and coal mine closure”.

Besides this, it’s proposed that targeted efforts be made in this phase to “increase production of green hydrogen and ammonia for industrial energy use” while improving “energy efficiency across the power, transport, industry, and buildings sectors”.

In the second phase, the G7 has suggested that it would make additional efforts to “widen support across a wider range of areas, including industrial and transportation decarbonisation needs”.

ET has reliably gathered that the larger objective is to pool together resources of willing G7 partners and multilateral development banks, then put out a statement through the Elmau political declaration followed by an “investment and policy plan to identify key opportunities, projects, and activities”.

The G7 proposal, sources said, has described the partnership as one based on “trust and strategic cooperation” with an ambitious energy transition plan, which will recognize a need for India to “accelerate a just energy transition towards decarbonisation to reduce their dependence on fossil-based energy generation”.

(The Economic Times)