Scholz warns Putin that retreat and defeat only remaining options in Ukraine

G7 leaders promise to deliver $100bn climate investment fund by 2025, and agreed in principle to establish a new ‘climate club’

German chancellor Olaf Scholz has warned Russian president Vladimir Putin that retreat and defeat are his only remaining options in Ukraine given the united front from western democracies.

Before heading to a Nato summit in Madrid, Mr Scholz said G7 members gathered in Bavaria, Germany, had sent Russia a united signal of condemnation over its invasion. “There will be only one way out of this: when Putin accepts that his enterprise will not succeed,” said Mr Scholz.

French president Emmanuel Macron said Russia had divided the world into “a camp of peace against a camp of war”. He said the G7 would support UN efforts to bring Ukraine grain – and fertiliser – to world markets to “ensure there are no famines starting because flows are cut off or because of stockpiling in some countries”.

In their final communique G7 nations reiterated multibillion aid commitments to Ukraine, and promised to work with the European Commission to hold a reconstruction conference soon.

On other fronts, three days of G7 talks yielded a document balanced between climate commitments and a determination to cushion their economies from higher prices and insecurity on energy markets.

G7 leaders promised to deliver a $100 billion climate investment fund by 2025, and agreed in principle to establish a new “climate club”. Details were scant, however, on how this “intergovernmental forum of high ambition” will deliver on Paris climate goals to limit global warming to 2 per cent.

Under pressure from Germany and Italy, both of which face throttled Russian energy supplies, the G7 backed “publicly-supported investment in the gas sector...as a temporary response, subject to clearly defined national circumstances”.

In particular G7 members stressed “the important role increased deliveries of LNG [liquefied natural gas] can play”, a boost for US president Joe Biden, though disagreement over details meant no agreement was possible on a plan to cap Russian gas and oil prices.

Senior US officials say high-level talks on the price cap took place in Bavaria with G7 guest India, an equivocal voice in the Ukraine war and large consumer of Russian energy.

Given the global ripple effect over the war in Ukraine, US national security adviser Jake Sullivan added that “China cannot avoid responsibility, given its relationship with Russia, for speaking more clearly to them”.

Looking forward to Madrid, he said Nato’s new strategic concept would “describe in stark terms the threat that Russia poses” and “speak very directly and in a clear-eyed way to the multifaceted challenge posed by the People’s Republic of China”.

Back in Bavaria, German officials were wary of supporting a price cap in case Russia responds with a total energy shutdown, while Italian prime minister Mario Draghi said he would “welcome” a result by October.

“All the leaders agree on the need to limit funding for Putin,” Mr Draghi said. “In the present situation it’s quite clear we’ll have short-term needs that will require large investments in gas infrastructure.”

Given all this, climate campaigner Laurie van der Burg, of Oil Change International, accused the G7 of prioritising the “filling the pockets of the fossil gas industry over protecting people’s lives”.