Germany to end foreign fossil fuel funding

Germany today signed the declaration to end public financing of unabated fossil fuel projects overseas by the end of 2022, after showing initial restraint when it was first launched last week at the UN Cop 26 climate conference.

The pledge seeks to stop new direct financial support to coal, oil and gas projects "except in limited and clearly defined circumstances that are consistent with a 1.5 degree warming limit and the goals of the Paris agreement".

More than 25 countries and institutions have now signed the declaration, with El Salvador also joining today. Combined they account for $22bn a year that can be invested in alternative energy projects instead.

Germany also signed the global coal to clean power transition statement, which seeks the transition away from unabated coal power generation in the 2030s. This proposal is being discussed by the three parties aiming to form the next German government.

"Phasing out coal is essential to reach our climate targets," German environment minister Svenja Schulze said at the climate summit.

Germany will have to step up the deployment of renewable capacity to meet its decarbonisation targets and make up for the loss of coal-fired power generation. But the country is unlikely to meet its targets under current expansion practices, Wartsila market development manager Jan Andersson told Argus.

Coal and lignite accounted for 8.6pc and 19.3pc respectively of Gemany's generation mix so far this year, according to Fraunhofer ISE data. Renewables accounted for 48.3pc.

By Florence Schmit