India-g7 JETP stuck as govt wants to design own transition plan

Global efforts to bring India on board the Just Energy Transition Partnership (JETP) with G7 nations had failed to move forward, as the Centre has refused to put ‘coal phase-out’ on the negotiation table and wants to design its own “transition plan”. Germany and the US are the two G7 nations that are co-leading the negotiations with India to join JETP, said sources.

Till date, neither has any funding amount been decided nor have the broad contours of negotiations been worked out. Following the initial proposals by the two nations earlier this year, the Indian government has not got back with a demand-based response. This paper has learnt that American and German negotiators have been awaiting a final official word from India since May.

The US wants to include decommissioning of assets, aka coal phaseout, as part of the discussion. However, India is pushing for climate funds for renewable energy, technology transfer and green jobs, sources said. Indian negotiators this paper spoke to said, the country is "not desperate" for funds and any JETP deal, if it were to happen, will be on "our terms and not want the other countries demand".

Under the G7 JETP framework, donor countries work together to accelerate the early retirement of high-emission infrastructure in partner countries and provide funding and other support for investment in renewable energy and allied infrastructure creation.

"We aren't a poor country. We won't accept a deal just because it suits a few developed nations. Our green energy sector already has access to global financing. We're ready to join a partnership for global energy transition. But any deal specific to India will happen on our own terms," said a senior official who is part of the core negotiation team.

Recently, at the G20 summit in Bali, Indonesia announced its JETP with G7 nations co-led by Japan and the US for $20 billion. The Indonesian JETP is primarily focused on phase-out of coal from the economy. At the COP27 summit in Egypt, South Africa announced its $8.5 billion JETP with Germany, France, the UK, the United States, and the European Union. While the agenda is non-fossil fuels based growth, the South African JETP is facing stiff criticism as close to 90 per cent of the total grant amount is in the form of loans. This, the climate observers said will increase the fiscal pressure on the country.

"South Africa is a good example of how the Global North is pushing its agenda on dependent nations. Climate financing is an obligation the developed world is running away from," said another senior government of India official.

This also puts a question on the expectation that India could announce a JETP during the G20 Summit for which it is the current host nation. Earlier, it was expected that India would announce JETP at COP27 in Egypt last month. However, no such talks were initiated.

The negotiators this paper spoke to said India has declared its energy transition plan in its nationally determined contributions (NDCS) submitted to the UNFCC under the Paris Agreement. “Beyond what we have committed under our NDC, there is no further thought on including a reduction on our fuel mix. We have ambitious plans and we will meet them. The Global North should first meet its historic target of $100 billion climate funding,” said an official.

India has expressed in its NDCS the need for low-cost global finance to meet its own climate targets. According to India's updated NDC submitted this August, 50 per cent of its installed electric power capacity will come from non-fossil sources by 2030. It has committed to reduce carbon intensity of its GDP by 45 per cent by 2030, (from 2005 levels). It was earlier 30 per cent.