G7 countries reach deal to phase out coal plants by 2035 (NYSEARCA:XLU)

Energy ministers from the G7 countries reportedly reached an agreement Monday to set a target date in the early 2030s for shutting down their coal-fired power plants.

The U.K.’s minister for nuclear and renewables, Andrew Bowie, described the agreement reached at this week’s G7 ministers meeting in Turin, Italy, as “historic” in an interview with CNBC.

An Italian diplomatic source confirmed to The Financial Times that the outlines of a deal were reached, with details to be formally announced by ministers after the final day of meetings on Tuesday.

FT reports the final agreement could include leeway in the planned timeline to include the option of a date “consistent with keeping a limit of 1.5C temperature rise [above pre-industrial levels] within reach, in line with countries’ net zero pathways,” which would help countries such as Japan that are heavily reliant on coal.

An agreement on coal would mark a significant step in the direction indicated last year by the COP28 United Nations climate summit to phase out fossil fuels.

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Last week, the U.S. issued sweeping new rules that crack down on power plant pollution and could force many coal plants to shut down unless they undertake costly upgrades to capture emissions.