G7 members will provide financial and technical support to help developing countries transition their mainstay coal-fired power generation to renewable energy in a push to accelerate decarbonisation.
As a first step, support will be provided to Indonesia, Vietnam, India and Senegal.
An agreement will be reached as early as the meeting of G7 environment, climate and energy ministers in late May.
Japan will help several countries, including Indonesia.
South Africa received support to move away from coal at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) last year.
Countries including the US and the UK committed US$8.5 billion in assistance to speed South Africa’s introduction of renewable energy and its closing of coal-fired power plants.
The G7 will expand this support framework.
Japan and the US are expected to be Indonesia’s major contributors, with G7 members and the EU serving as partners.
The UK and the EU would be major contributors for Vietnam, with the US and Germany filling the role for India.
The amount of assistance for each will be discussed in the future.
The initiative will also tap into the Asian Development Bank’s planned fund and financing scheme for the early transition away from coal in Southeast Asia.
The Paris Agreement sets a goal of limiting the rise in global temperatures, preferably to within 1.5°C above preindustrial levels.
To achieve this, the UN says carbon dioxide emissions will need to be reduced 45% from 2010 levels by 2030.
Developing and emerging countries with growing demand for electricity are increasingly demanding support from developed countries.
This is expected to be a major topic of discussion at COP27, which will be held in Egypt this November.
The European Commission plans a system of carbon border taxes, which would impose tariffs on imports from countries with lax environmental regulations.
Developing countries still dependent on fossil fuels have put up strong opposition, arguing that it hinders free trade.
Providing support for coal-free development in developing countries aims to address such criticism.
Japan is the only G7 country not to have announced an intention to phase out coal, while Europe and the US have called for a swift end to its use.
In addition to addressing the specific support for developing countries, G7 members face the challenge of ensuring that the necessary amount of support is secured.