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Electric heat pumps are set to play a key role in the UK’s climate strategy, as well as cutting the nation’s reliance on imported fossil fuels.

Heat pumps took centre-stage in the UK government’s recent “warm homes plan”, which said that they could also help cut household energy bills by “hundreds of pounds” a year.

Similarly, innovation agency Nesta estimates that typical households could cut their annual energy bills nearly £300 a year, by switching from a gas boiler to a heat pump.

Yet there has been widespread media coverage in the Times, Sunday Times, Daily Express, Daily Telegraph and elsewhere of a report claiming that heat pumps are “more expensive” to run.

The report is from the Green Britain Foundation set up by Dale Vince, owner of energy firm Ecotricity, who campaigns against heat pumps and invests in “green gas” as an alternative.

One expert tells Carbon Brief that Vince’s report is based on “flimsy data”, while another says that it “combines a series of worst-case assumptions to present an unduly pessimistic picture”.

This factcheck explains how heat pumps can cut bills, what the latest data shows about potential savings and how this information was left out of the report from Vince’s foundation.

How heat pumps can cut bills

Heat pumps use electricity to move heat – most commonly from outside air – to the inside of a building, in a process that is similar to the way that a fridge keeps its contents cold.

This means that they are highly efficient, adding three or four units of heat to the house for each unit of electricity used. In contrast, a gas boiler will always supply less than one unit of heat from each unit of gas that it burns, because some of the energy is lost during combustion.

This means that heat pumps can keep buildings warm while using three, four or even five times less energy than a gas boiler. This cuts fossil-fuel imports, reducing demand for gas by at least two-fifths, even in the unlikely scenario that all of the electricity they need is gas-fired.

Simon Evans on BlueSky (@drsimevans.carbonbrief.org): "Going slow on heat pumps could mean UK consumers having to pay an extra £3bn for imported gas 2026-2030, says Energy UK Says UK govt foot-dragging is "increasing costs for energy customers & hampering future system planning"

Since UK electricity supplies are now the cleanest they have ever been, heat pumps also cut the carbon emissions associated with staying warm by around 85%, relative to a gas boiler.

Heat pumps are, therefore, the “central” technology for cutting carbon emissions from buildings.

While heat pumps cost more to install than gas boilers, the UK government’s recent “warm homes plan” says that they can help cut energy bills by “hundreds of pounds” per year.

Similarly, Nesta published analysis showing that a typical home could cut its annual energy bill by £280, if it replaces a gas boiler with a heat pump, as shown in the figure below.

Nesta and the government plan say that significantly larger savings are possible if heat pumps are combined with other clean-energy technologies, such as solar and batteries.

Chart showing that clean electric tech could save households £1,000 a year, compared to gas boilers
Annual energy bill savings (£) for a typical household from April 2026, by using different clean-energy technologies in comparison with a gas boiler. Source: Nesta analysis, using data from Ofgem, the Centre for Net Zero and an Octopus Energy tariff.

Both the government and Nesta’s estimates of bill savings from switching to a heat pump rely on relatively conservative assumptions.

Specifically, the government assumes that a heat pump will deliver 2.8 units of heat for each unit of electricity, on average. This is known as the “seasonal coefficient of performance” (SCoP).

This figure is taken from the government-backed “electrification of heat” trial, which ran during 2020-2022 and showed that heat pumps are suitable for all building types in the UK.

(The Green Britain Foundation report and Vince’s quotes in related coverage repeat a number of heat pump myths, such as the idea that they do not perform well in older properties and require high levels of insulation.)

Nesta assumes a slightly higher SCoP of 3.0, says Madeleine Gabriel, the organisation’s director of sustainable future. (See below for more on what the latest data says about SCoP in recent installations.)

Both the government and Nesta assume that a home with a heat pump would disconnect from the gas grid, meaning that it would no longer need to pay the daily “standing charge” for gas. This currently amounts to a saving of around £130 per year.

Finally, they both consider the impact of a home with a heat pump using a “smart tariff”, where the price of electricity varies according to the time of day.

Such tariffs are now widely available from a variety of energy suppliers and many have been designed specifically for homes that have a heat pump.

Such tariffs significantly reduce the average price for a unit of electricity. Government survey data suggests that around half of heat-pump owners already use such tariffs.

This is important because on the standard rates under the price cap set by energy regulator Ofgem, each unit of electricity costs more than four times as much as a unit of gas.

The ratio between electricity and gas prices is a key determinant of the size and potential for running-cost savings with a heat pump. Countries with a lower electricity-to-gas price ratio consistently see much higher rates of heat-pump adoption.

(Decisions taken by the UK government in its 2025 budget mean that the electricity-to-gas ratio will fall from April, but current forecasts suggest it will remain above four-to-one.)

In contrast, Vince’s report assumes that gas boilers are 90% efficient, whereas data from real homes suggests 85% is more typical. It also assumes that homes with heat pumps remain on the gas grid, paying the standing charge, as well as using only a standard electricity tariff.

Prof Jan Rosenow, energy programme leader at the University of Oxford’s Environmental Change Institute, tells Carbon Brief that Vince’s report uses “worst-case assumptions”. He says:

“This report cherry-picks assumptions to reach a predetermined conclusion. Most notably, it assumes a gas boiler efficiency of 90%, which is significantly higher than real-world performance…Taken together, the analysis combines a series of worst-case assumptions to present an unduly pessimistic picture.”

Similarly, Gabriel tells Carbon Brief that Vince’s report is based on “flimsy data”. She explains:

“Dale Vince has drawn some very strong conclusions about heat pumps from quite flimsy data. Like Dale, we’d also like to see electricity prices come down relative to gas, but we estimate that, from April, even a moderately efficient heat pump on a standard tariff will be cheaper to run than a gas boiler. Paired with a time-of-use tariff, a heat pump could save £280 versus a boiler and adding solar panels and a battery could triple those savings.”

What the latest data shows about bill savings

The efficiency of heat-pump installations is another key factor in the potential bill savings they can deliver and, here, both the government and Vince’s report take a conservative approach.

They rely on the “electrification of heat” trial data to use an efficiency (SCoP) of 2.8 for heat pumps. However, Rosenow says that recent evidence shows that “substantially higher efficiencies are routinely available”, as shown in the figure below.

Detailed, real-time data on hundreds of heat pump systems around the UK is available via the website Heat Pump Monitor, where the average efficiency – a SCoP of 3.9 – is much higher.

Charts showing that recent heat-pump installations tend to be far more efficient
Number of installations by heat pump efficiency, in the electrification of heat trial (left) and on the website Heat Pump Monitor (right). An efficiency of three means that each unit of electricity delivers three units of heat, on average, across a year. Source: Heat Pump Monitor.

Homes with such efficient heat-pump installations would see even larger bill savings than suggested by the government and Nesta estimates.

Academic research suggests that there are simple and easy-to-implement reasons why these systems achieve much higher efficiency levels than in the electrification of heat trial.

Specifically, it shows that many of the systems in the trial have poor software settings, which means they do not operate as efficiently as their heat pump hardware is capable of doing.

The research suggests that heat pump installations in the UK have been getting more and more efficient over time, as engineers become increasingly familiar with the technology.

It indicates that recently installed heat pumps are 64% more efficient than those in early trials.

Jan Rosenow on BlueSky (@janrosenow.bsky.social): "Well-installed heat pumps installed in the UK today achieve on average a 64% higher efficiency than those during the early trials 15 years ago. It is testament to the brilliant installers and to the technology getting better. More in our recent paper"

Notably, the Green Britain Foundation report only refers to the trial data from the electrification of heat study carried out in 2020-22 and the even earlier “renewable heat premium package” (RHPP). This makes a huge difference to the estimated running costs of a heat pump.

Carbon Brief analysis suggests that a typical household could cut its annual energy bills by nearly £200 with a heat pump – even on a standard electricity tariff – if the system has a SCoP of 3.9.

The savings would be even larger on a smart heat-pump tariff.

In contrast, based on the oldest efficiency figures mentioned in the Green Britain Foundation report, a heat pump could increase annual household bills by as much as £200 on a standard tariff.

To support its conclusions, the report also includes the results of a survey of 1,001 heat pump owners, which, among other things, is at odds with government survey data. The report says “66% of respondents report that their homes are more expensive to heat than the previous system”.

There are several reasons to treat these findings with caution. The survey was carried out in July 2025 and some 45% of the heat pumps involved were installed between 2021-23.

This is a period during which energy prices surged as a result of Russia’s invasion of Ukraine and the resulting global energy crisis. Energy bills remain elevated as a result of high gas prices.

The wording of the survey question asks if homes are “more or less expensive to heat than with your previous system” – but makes no mention of these price rises.

The question does not ask homeowners if their bills are higher today, with a heat pump, than they would have been with the household’s previous heating system.

If respondents interpreted the question as asking whether their bills have gone up or down since their heat pump was installed, then their answers will be confounded by the rise in prices overall.

There are a number of other seemingly contradictory aspects of the survey that raise questions about its findings and the strong conclusions in the media coverage of the report.

For example, while only 15% of respondents say it is cheaper to heat their home with a heat pump, 49% say that one of the top three advantages of the system is saving money on energy bills.

In addition, 57% of respondents say they still have a boiler, even though 67% say they received government subsidies for their heat-pump installation. It is a requirement of the government’s boiler upgrade scheme (BUS) grants that homeowners completely remove their boiler.

The government’s own survey of BUS recipients finds that only 13% of respondents say their bills have gone up, whereas 37% say their bills have gone down, another 13% say they have stayed the same and 8% thought that it was too early to say.

The post Factcheck: What it really costs to heat a home in the UK with a heat pump appeared first on Carbon Brief.

Factcheck: What it really costs to heat a home in the UK with a heat pump

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The UN climate process was built for negotiation – now it must support implementation

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By Paul Watkinson, Stefan Ruchti-Crowley, Anju Sharma, Ovais Sarmad and Benito Müller.

In the corridors of the World Conference Centre in Bonn, where the June Climate Meetings (SB64) will conclude on Thursday, the need for change is palpable.

Delegates are grappling once again with overcrowded agendas, growing demands on limited negotiating time, external geopolitical pressures that reverberate internally to test the limits of a consensus-based process, and concerns over its future financial sustainability.

Bonn Bulletin: Finance row threatens to scupper work on adaptation goal

There is growing frustration with a process that consumes vast amounts of time to produce outcomes that are often too incremental to match the accelerating reality of the climate crisis.

The climate regime has delivered. But it is in danger of not delivering enough.

More effective multilateralism

There is no denying the successes of the UN climate process. Over three decades, the UN Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Paris Agreement established a universal framework for climate action, created transparency and accountability mechanisms, and sent powerful signals to governments, businesses and investors.

Thanks in large part to this framework, the world is no longer on a trajectory of more than 4°C of warming, clean technology costs have fallen dramatically, and participation in the global climate effort remains nearly universal.

Yet, global temperatures continue to break records. Climate impacts are intensifying across every region. The world remains far off track to achieve the goals of the Paris Agreement. As warming approaches – and may exceed – 1.5°C, every additional fraction of a degree brings greater losses of lives, livelihoods and ecosystems, with the greatest burdens falling on the most vulnerable countries and communities.

    We remain convinced that the answer to the climate crisis is not less multilateralism, but more effective multilateralism.

    The hard truth is that the UNFCCC remains largely organised around the logic of treaty-making, while the central challenge of climate action has shifted to implementation. A process designed to negotiate agreements and deliver decision text as the outcome is now required to support implementation on the ground—and it is struggling.

    There is a structural mismatch between what the climate process was designed to do, and what it needs to do now.

    Consultations on reforms

    Discussions on the urgency of reform are widespread and no longer confined to the margins. Formally, the Arrangements for Intergovernmental Meetings (AIM) process is exploring ways of improving the efficiency and effectiveness of the process.

    The UNFCCC Executive Secretary has also convened a High-Level Informal Consultative Roundtable for strategic reflection on how to strengthen the complementarity between the intergovernmental process and action in the real economy.

    Defending multilateralism today requires adapting it.

    The good news is that meaningful reform does not require reopening treaties, renegotiating the Paris Agreement, or indeed even resolving long-standing differences on the Rules of Procedure to change the consensus rule. Stefan Ruchti-Crowley and Paul Watkinson’s recent paper for ecbi (European Capacity Building Initiative), Quo Vadis COP? Reforming UNFCCC Sessions to Improve Negotiations and Support Implementation, outlines a practical toolbox of four reforms that can be pursued within the existing institutional framework.

    First, the process must improve its agendas.

    The formal process is burdened by crowded agendas and overlapping workstreams. Consolidating agenda items under broader thematic pillars (such as mitigation, adaptation, finance and transparency); developing good practices for agenda adoption; removing legacy “ghost” items; and concluding outstanding business on the Kyoto Protocol will create more space for substantive discussions and implementation.

    Second, the process must organise its work more strategically.

    The climate process currently attempts to address nearly every issue at every session. A more strategic approach would use thematic multi-year programmes of work; better align review cycles and timelines; improve coherence across the many bodies and processes that have accumulated over time, often to the extent that even insiders have lost oversight; and also make better use of inter-sessional and pre-sessional meetings.

    Third, the process must focus more deliberately on implementation.

    Critically, not every challenge requires a negotiated outcome. Negotiations should focus on issues that genuinely require collective decision-making. Other discussions should prioritise learning, cooperation and practical problem-solving.

    Existing formats such as Talanoa Dialogues, roundtables and other facilitative approaches should be expanded. Likewise, the Enhanced Transparency Framework should become a stronger mechanism for mutual learning and accountability rather than a largely procedural reporting and “box-ticking” exercise.

    Fourth, the process must make structural changes and broaden participation.

    National delegations should include a broader range of practitioners and policymakers, including a Head of Implementation. The process should strengthen engagement with sectoral ministers, investors, technology providers, scientists, local authorities and non-Party stakeholders.

    Stronger links are necessary between science policy and implementation, and with international institutions that shape the enabling conditions for climate action, particularly finance and development. Platforms to address systemic barriers along with AI-enabled learning by doing will equally support strengthened action.

    Delivering commitments with limited resources

    The case for reform is becoming even stronger as financial pressures intensify.

    Improving efficiency is not simply desirable; it has become unavoidable. The UNFCCC faces growing budgetary constraints arising from delayed contributions, uncertainty surrounding major donors, and broader reductions across the UN system.

    A process that is better organised, more implementation-focused and less encumbered by procedural overload will be far better equipped to navigate a future of tighter resources.

    Leadership will be crucial.

    Panama environment minister backs calls for reform of UN climate process

    COP presidencies have an important role to play, as do the Chairs of the Subsidiary Bodies. The UNFCCC Executive Secretary and Secretariat must take a bold approach to work in coordination with the COP Bureau to implement urgent changes.

    Careful diplomacy will, of course, be essential. Parties must be reassured that reform is intended to strengthen the effectiveness of the regime, not weaken its governance. The objective is not to replace mandates, but to ensure that mandates can be fulfilled more effectively. It is to ensure that negotiation is used where negotiation is needed, while other forms of cooperation are used where they can deliver better results.

    The UNFCCC remains the cornerstone of international climate cooperation. No other forum combines its legitimacy, universality and legal authority. But the multilateral climate process must evolve from a system primarily designed to negotiate commitments into one that is equally capable of supporting their delivery.

    The post The UN climate process was built for negotiation – now it must support implementation appeared first on Climate Home News.

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    The vote that stopped a data center: US communities query resource-hungry AI

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    On quiet streets across the Californian city of Monterey Park, green-and-white “YES on Measure NDC” signs stood on front-yard lawns as volunteers walked door-to-door, drumming up support among residents to vote in favor of a ban on new data centers in their area.

    They clarified the ballot wording in English, Spanish and Chinese, while distributing multilingual flyers warning about the rise in electricity demand, industrial infrastructure and environmental impacts associated with AI-related data center development.

    Less than a month later, on June 2, Monterey Park voters overwhelmingly approved the ban in the San Gabriel Valley east of Los Angeles, with 86.4% voting in favor and 13.6% opposed, according to county election results.

    Social opposition to data centers is on the rise, especially in the US, as artificial intelligence (AI) and the technology hubs needed to support it stoke competition for electricity, water and land in communities where they are based. Industry advocates say data centers bring economic benefits and do not always result in higher power prices for households.

    A front-yard sign encourages Monterey Park residents to vote “YES on Measure NDC” (No Data Centers) in the San Gabriel Valley, LA County on May 9, 2026 (Photo: Kristen Mayol)

    A front-yard sign encourages Monterey Park residents to vote “YES on Measure NDC” (No Data Centers) in the San Gabriel Valley, LA County on May 9, 2026 (Photo: Kristen Mayol)

    The result in Monterey Park made it the first city in the United States to enact a citywide prohibition on data centers through a voter-approved ballot measure.

    “This week our city has been celebrating the landslide results from Measure NDC,” Monterey Park Mayor Elizabeth Yang said in a phone interview.

    On social media, Yang described the city’s response as the result of sustained resident organizing and civic engagement. “We want to fulfill our duty of listening to residents,” Yang told Climate Home News.

    A community campaign takes shape

    The vote came after months of public testimony, neighborhood outreach and organizing surrounding a proposed data center project on Saturn Street in Monterey Park. Here, developers planned to replace an existing commercial office building with a nearly 50-megawatt data center intended to serve growing demand for AI computing.

    Supporters of Measure NDC (Measure No Data Centers) argued that keeping this, and other such centers, out of their community would help protect air quality, drinking water resources, public health and local infrastructure.

    According to CoStar News, a real estate information platform, the backers of the Saturn Street project – Digico Infrastructure REIT and HMC Capital’s StratCap – had already withdrawn their planning application on April 3 amid growing local opposition and regulatory uncertainty, including the city’s decision to place a data center ban before voters.

    Subsequently, on April 20, the Monterey Park City Council adopted an ordinance prohibiting all data centers within the city limits.

    Explainer: Will AI data centres make or break the energy transition?

    Company representatives later said they would explore future “productive land uses … supported by the broader community”. Potential alternatives discussed publicly have included housing, although no formal proposal has been submitted.

    Reuters reported in May that DigiCo Infrastructure, an Australian company, was exploring “monetisation options” for its two Los Angeles sites after rowing back on the Monterey Park proposal. DigiCo is also selling its Chicago data center for $750 million to pay down debt and fund the development of another site in Sydney.

    DigiCo and HMC Capital did not respond to requests for comment for this article.

    Potential local benefits of data centers

    Industry lobby groups argue that data centers can provide economic benefits to host communities. According to the US-based Data Center Coalition, which represents major operators and developers, data centers generate tax revenue, support construction and technical jobs, and provide infrastructure needed for cloud computing, scientific research and AI development.

    The industry has also challenged claims that data centers necessarily raise electricity costs for households. A recent report by energy consulting firm Energy + Environmental Economics (E3), commissioned by the coalition, found no historical evidence that data centers had driven up residential electricity rates under existing utility pricing structures. It argued that factors including inflation, grid modernization costs, natural gas price volatility and investments in wildfire resilience have played a bigger role in rising electricity bills.

    According to E3, large users can, under certain regulatory frameworks, reduce prices for other customers by contributing more revenue to utilities than they cost to serve. In a previous analysis of Amazon data centers, the consultancy found that payments from the facilities exceeded the incremental costs incurred by utilities. The report also noted that regulators across the US have increasingly adopted specialized pricing structures as data center demand has expanded.

    An aerial photo shows the Alibaba Zhejiang Cloud Computing Renhe Data Center in Hangzhou, China, on April 11, 2024. (Photo by Costfoto/NurPhoto)

    An aerial photo shows the Alibaba Zhejiang Cloud Computing Renhe Data Center in Hangzhou, China, on April 11, 2024. (Photo by Costfoto/NurPhoto)

    Hefty carbon, water and land footprints

    The concerns raised in Monterey Park mirror debates over the environmental and infrastructure demands of AI being heard in many countries around the world, from Europe to North America and Asia.

    This month, a UN report estimated that the data centers required for AI globally could consume 945 terawatt-hours of electricity annually by 2030 – roughly twice France’s 2025 power consumption.

    This, it calculated, would have a carbon footprint needing some 6.7 billion trees grown over 10 years to offset, a water footprint equal to the annual domestic needs of 1.3 billion people in Sub-Saharan Africa, and a land footprint of more than 14,500 square kilometers, roughly twice the Jakarta metropolitan area. 

    In a 2026 report, Key Questions on Energy and AI, the International Energy Agency (IEA) found that electricity consumption from AI-focused data centers grew by approximately 50% in 2025 alone.

    It warned that “social acceptability is also a growing issue, as communities push back against data center projects”, citing concerns about environmental sustainability, electricity affordability, infrastructure strain and democratic participation in land-use decisions.

    Global data center electricity consumption by sensitivity case, 2020-2035

    Left axis shows terawatt hours. (IEA: Licence CC BY 4.0)

    Left axis shows terawatt hours. (IEA: Licence CC BY 4.0)

    AI-focused facilities consume substantially more electricity than traditional data centers and often require extensive supporting infrastructure, including cooling systems, industrial electrical equipment, backup generators running on diesel and large-scale energy storage systems.

    The IEA also noted that operators are increasingly exploring onsite natural gas generation and battery infrastructure to maintain electrical reliability as AI workloads intensify.

    Local concern over industrial infrastructure

    Samuel Brown Vazquez, an East San Gabriel Valley community organizer, said doubts about the proposed data center in Monterey Park were informed by broader debates over industrial development in the area.

    Brown cited community opposition to proposals that could bring battery energy storage facilities – and potentially data centers – to the former Puente Hills Mall site  in the City of Industry, where residents have raised concerns about pollution, fire risks, and the impacts of new industrial infrastructure on nearby residential neighborhoods and schools.

    Many viewed the campaign as part of a larger conversation about how communities should respond to the rapid expansion of AI-related infrastructure across Southern California.

    Power-hungry AI data centres seen driving demand for fossil fuels

    According to nonprofit Data Center Watch, around $64 billion-worth of data center projects nationwide were delayed or blocked between May 2024 and March 2025 amid increasing local opposition.

    Mayor Yang wants Monterey Park’s experience to encourage other communities to take a more active role in decisions about AI-related infrastructure. “We’re hoping other cities can follow similarly in banning data centers with proposed ballot measures,” she said, adding that whether such efforts succeed elsewhere will depend in part on how local officials respond to residents’ concerns.

    Materials for the “Yes on Measure NDC” campaign, May, 2026 (Photos: Kristen Mayol)

    Materials for the “Yes on Measure NDC” campaign, May, 2026 (Photos: Kristen Mayol)

    The new UN report this month called on governments and companies to address AI’s environmental impacts proactively to ensure that the technology develops sustainably and its benefits are shared fairly.

    Kaveh Madani, director of the United Nations University Institute for Water, Environment and Health, who led the investigation team for the report, said AI “is a technological transformation that is improving the lives of billions of people around the world”. But, he added, it must be used “responsibly”.   

    “We have a narrow window to ensure that the backbone of the technological revolution of our era develops within planetary limits, and that the communities who provide the critical minerals for advancing AI and the ones that host its infrastructure and e-waste are also among those who benefit from it,” he said.

    This story was developed, reported and produced under the Covering Climate Now (CCNow) Climate Journalism Student Mentorship, which connects USC student journalists with professional newsrooms in CCNow’s global network. Participants receive training, editorial mentorship, and the opportunity to report and publish original climate stories with partner outlets while being paid professional freelance rates.

    The post The vote that stopped a data center: US communities query resource-hungry AI appeared first on Climate Home News.

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    Warning against ‘consumer club’ as G7 forms critical minerals alliance

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    Wealthy nations in the G7 have agreed to work more closely together to secure the minerals they need for the energy transition, AI and defence, and to diversify supply chains away from China, calling for more cooperation with “like-minded partners”.

    But the agreement adopted at this week’s G7 leaders’ summit in France is vague on what co-operation with resource-rich developing countries could look like, with critics warning against creating a consumer club of powerful nations that excludes others from shaping standards and building green supply chains.

    “The G7 communiqué reaffirms our suspicion that, for the G7, it is all about resource security, not just energy transition,” Claude Kabemba, executive director of Southern Africa Resource Watch, told Climate Home News.

      In a joint communique, the leaders of some of the world’s largest economies said they would step up coordination within the group and with partner countries to establish mineral processing and industrial capacity, support local value addition, promote innovation, develop standards, improve mineral traceability and share information on stockpiling systems.

      They agreed to create a joint crisis-prevention mechanism with the support of the International Energy Agency to monitor mineral supply and demand disruptions, as well as establish harmonised platforms to provide information about the origin of minerals, starting with lithium and nickel.

      The statement was endorsed by France, the UK, Canada, Germany, Italy, Japan, the US and the European Union at the end of the three-day summit in Evian, on the French shores of Lake Geneva. Australia, which isn’t a G7 member, also supported the declaration.

      Breaking dependency on China

      Western governments have been scrambling to secure the minerals they need to produce clean energy technologies such as batteries, electric vehicles and wind turbines, as well as hardware for artificial intelligence and military equipment while breaking their dependence on China.

      China controls most supply chains for the strategic minerals they need, dominating the processing of 19 out of 20 critical minerals. The only exception is nickel, where Indonesia leads on supply and processing. Last year, Beijing spooked governments in Europe and the US when it imposed restrictions on rare earths exports, signalling its willingness to use its industrial clout to achieve its geopolitical objectives.

      “We are all faced with risks of over-dependence and therefore vulnerability in our value chains,” French President Emmanuel Macron told a press conference, citing the “risks of divisions” among the group on how to respond to China’s control over strategic resources. “We have decided to move forward together,” he said.

      Leaders agreed to aggregate demand to support the development of minerals projects and set targets for reducing dependencies on any single country outside the G7 by the end of the year.

      A US proposal to regulate mineral prices and a French push to establish a permanent secretariat to track G7 initiatives on minerals failed to reach consensus among the group, according to Reuters.

      Who has a seat at the table?

      The declaration recognises the need for “mutually beneficial partnerships” and “plurilateral trade agreements” between G7 countries and “like-minded” and “trusted” partners to build diversified supply chains. Other parts of the text refer to “developing countries” and “emerging economies”.

      A separate G7 statement on “mutually beneficial international partnerships” mentions the need for international cooperation along the whole of mineral supply chains.

      “Who is going to be part of this conversation is unclear,” said Sébastien Treyer, executive director of France think-tank IDDRI, citing the ambiguity of the language and calling for developing countries to be part of the conversation.

      Trade agreements that support green industrialisation can be “an entry point” for investment into value-addition projects in developing countries, said Treyer, but “how this is going to be operationalised is the key question”.

      Moving beyond a ‘consumer club’

      Resource-rich developing countries, particularly in Africa, have called for investment to build their industrial capacity to turn raw materials into high-value components for clean energy technologies such as batteries, capturing more domestic value and creating jobs.

      But Kabemba, whose organisation is based in South Africa, said the declaration says “nothing about transferring industrial capacity to previously exploited regions such Africa”.

      “Africa needs to react with its own coalition of the willing to put Africa’s interests first, otherwise, Africa risks being locked into a role as a raw material supplier in a new economic order it is not helping to build,” he said.

        Patrick Schröder, a resource governance expert at Chatham House, agreed that the G7 remains overwhelmingly focused on securing minerals supplies and reducing its dependence on China. “The benefits for developing country producers are only marginal in the G7 discussions,” he said.

        Brazil, which is rich in rare earths, graphite and copper, was invited to attend the G7 meeting but did not endorse the minerals declaration – highlighting the need for future minerals framework to be more inclusive and responsive to producer-country concerns, said Schröder.

        For Luc Tezenas, head of policy and advocacy at the Resource Justice Network, “the answer to rising geopolitical fragmentation cannot be to shrink multilateralism into a smaller club of ‘like-minded’ consumer economies”.

        Instead, a non-binding minerals framework put forward by South Africa during its presidency of the G20 last year “shows more promise as a pathway forward because it attempts to link supply resilience with regional value chains and economic justice,” he said. The UK, which is presiding over the G20 next year, has the opportunity to build a more inclusive way forward, he added.

        Circularity: another way to capture value

        G7 nations also described the circular economy and the substitution of minerals in designing technologies as “key” to meet growing demand and secure sufficient supplies.

        This, they said, includes increasing recycling capacity by setting targets, combatting the illegal transfer of used products and components, and promoting the recovery of minerals from secondary sources such as mining waste.

        “We also recognise the opportunity for emerging market and developing economies to benefit from capturing added value through the recycling and secondary processing of their mining waste, as well as from circular economy innovations,” they said.

        Schröder, of Chatham House, said the challenge now lies in demonstrating that intentions can be turned into creating a circular economy for minerals through investments, business support and a favourable policy environment.

        The post Warning against ‘consumer club’ as G7 forms critical minerals alliance appeared first on Climate Home News.

        Warning against ‘consumer club’ as G7 forms critical minerals alliance

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