U.K. FUNDING OF OVERSEAS NATURAL GAS PROJECT CHALLENGED IN COURT
During a three-day hearing at London’s High Court, Friends of the Earth challenged the United Kingdom’s (U.K.'s) financing of a liquefied natural gas project in Mozambique. In July 2020, the U.K. government’s export credit agency, UK Export Finance (UKEF), approved $1.15 billion of funding through loans and guarantees for the $20 billion project. In December 2020, the United Kingdom then committed to ending overseas fossil fuel project support.
The Mozambique government has strongly supported the project as crucial for its energy plan (Reuters). However, Mozambique’s environment minister, Zac Goldsmith, noted that “the prospect of the arrival of massive gas income” was contributing to conflict in the country, and he hoped there would not be future fossil fuel projects funded by the UKEF (The Guardian).
Friends of the Earth argued the project’s climate assessment was insufficient, as it only considered compatibility with 2°C average warming instead of 1.5°C, which scientists have deemed a critical threshold. Further, they said that based on the Paris Agreement, the United Kingdom should be helping developing countries increase capacity for renewable energy, not fossil fuels. UKEF recognized there were risks, including environmental, from the project. However, the U.K. government said they considered climate change in tandem with other public interest issues, including benefits to U.K. business and “transformational economic benefits” to Mozambique, as they decided to support the project (Bloomberg). Legal proceedings continued through the end of last week.