As the remote Bavarian town of Schloss Elmau gears up to host the G7 heads of state this weekend, environmental groups are calling on Angela Merkel to prove her credentials as Germany's "climate chancellor" and steer the talks to meaningful progress on environmental issues.

"The G7 summit is a unique opportunity to create momentum for climate negotiations to be concluded in Paris in December," says Tobias Münchmeyer of Greenpeace. "It also comes at a crucial time for Germany to either fulfill or fail on its own national climate targets."

In an editorial published in various newspapers around the world on June 3, Merkel named climate change as one of two key global challenges to be addressed at the talks, along with sustainable development.

"The G7 ought to be a model for the necessary transition to a low­-carbon economy," Merkel wrote.

With the UN Climate Change Conference in Paris later this year, the pressure is growing on the leaders of the world's seven most economically powerful nations to make progress on international agreements to keep climate change at below 2 degrees Celsius.

Climate finance and decarbonization

"The key environmental issues for Merkel at the summit will be to get strong, long-term de-carbonization commitments from the G7 countries, and to secure more and improved commitments to climate finance, in order to bring developing and emerging economies on board for climate commitments," says Christian Hey, secretary general of the German Advisory Council on the Environment.

Greenpeace says the G7 nations are responsible for 30 percent of coal-generated power worldwide - and as a result they should carry a large share of the responsibility for global greenhouse gas emissions.

At the Petersberg Climate Dialogue talks in Berlin in May, Germany announced it would double its climate finance contribution to 4 billion euros annually.

Global pledges amount to only 30 billion dollars, which is far from a target of 100 billion dollars agreed at the 2009 UN climate conference in Copenhagen.

Environmental groups hope the talks in Elmau will narrow this gap.

"The G7 can really set the tone for Paris but it is also about making concrete decisions - such as setting long-term goals on de-carbonization," says Sabine Minninger of Bread for the World, Germany. "If the G7 led the way by committing to phase out fossil fuels by 2050 it would be a massive step forward and a very important signal for Paris."

But Minninger says there is more hope of success on the issue of climate finance than on a commitment to 100 percent renewable energy.

"It's easier for rich countries to put money on the table than make commitments on de-carbonization that mean changing their own economies," Minninger says.

Ahead of the talks, Merkel told the German daily newspaper "Süddeutsche Zeitung" that Germany and France were driven to achieve as many commitments on de-carbonization as possible at the summit, but that there was no consensus yet.

The greatest resistance is likely to come from Japan, which lags behind on climate targets, and Canada, which is a major producer of fossil fuels.

German coal dependency could undermine talks

Germany has set itself some of the world's most ambitious climate targets and now covers over a quarter of its electricity demand from renewable sources.

But it is also heavily dependent on lignite - or brown coal - an extremely carbon-heavy fuel. Observers say this could undermine Merkel's position at the G7 talks.

"Germany has a serious coal problem," says Münchmeyer. "If no further measures are taken, it cannot meet its 2020 climate target of a 40 percent reduction in carbon emissions."

Ahead of the talks, Greenpeace has led protests in 60 German cities, calling on Merkel to phase out coal.

"If Merkel doesn't resolve the issue of coal at home, it not only has grave consequences for Germany's climate debate, but also for international discussion," says Münchmeyer. "Her position won't be credible if she hasn't done her homework before the summit."

Sustainable resource use and marine protection

Climate change isn't the only environmental issue on the agenda in Elmau.

In the run-up to the summit, the national science academies of the G7 nations called for action on marine pollution, and preserving fish stocks and marine biodiversity.

Münchmeyer says Greenpeace hopes the G7 is moving in the right direction on protecting marine biodiversity, following a commitment by G7 foreign ministers in April to implement plans to establish marine protected areas.

Sustainable resource use is also expected be high on the agenda at Elmau.

But Christian Hey says rather than compete with growth and trade - climate change and sustainability need be framed in economic terms.

"Addressing long-term growth without addressing climate change is an illusion," says Hey. "The same applies for the question of resources. You cannot ensure long-term growth without taking into consideration the increasing scarcity of resources, which will push up prices and have an impact on the economy."