UK Offered £760m of Support to Overseas Fossil Fuel Projects Last Year

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Liz Truss, International Trade Secretary

The UK has provided up to £760 million worth of financial support for “climate-wrecking” fossil fuel projects around the world in the past year, compared with six schemes related to renewable energy, according to analysis by the campaign group Global Witness.

Data published by the government’s export credit agency at the end of June show the Department for International Trade, under which the agency is housed, helped to finance a total of 51 oil and gas projects.

More than two thirds of the £430 million used to support renewables went to a single wind power development in Taiwan, the organisation found.

The news comes as former UN Secretary-General Ban Ki-moon repeated a call for the government to align the agency’s policies with climate goals in a speech to the Chatham House think tank.

Reacting to the findings, Matthew Pennycook, Shadow Climate Change Minister, said: “as the host of the COP26 summit, we have zero credibility if we do not lead by example.”

We cannot lay claim to the mantle of climate leadership while pumping billions of pounds of public funds into overseas oil and gas. The Government must end the financing of fossil fuel projects across the globe,” he said.

DeSmog last year found the UK had given up to £2 billion of support to fossil fuels through the agency, representing a significant increase on the previous year, when £175 million was provided.

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Earlier this week, the government agreed to provide up to $1 billion in financing for a $15 billion liquefied natural gas (LNG) development in Mozambique, despite plans being drawn up by senior civil servants to phase out support for overseas fossil fuel projects.

The UK Youth Climate Coalition campaign group branded Boris Johnson a “climate hypocrite” for the move, arguing that the government was “failing to show the leadership required” as it prepares for the UN climate summit set to take place in Glasgow next year.

Islamist insurgents have since been reported to have attacked workers involved in the Mozambique project, killing eight and confirming fears that the development could be vulnerable to terrorist attacks.

In a separate investigation last month, Global Witness revealed 96 percent of gifts and hospitality provided to UK Export Finance (UKEF) by energy companies from 2001-2019 related to the fossil fuel industry, with renewables accounting for the remaining 4 percent.

Among the top ten companies to have given gifts and hospitality to staff were Saudi Aramco, the world’s largest oil producer, Shell and the Russian gas giant Gazprom, which made the highest number of donations.

The group is calling on the government to ban fossil fuel financing through the agency, with its Senior Climate Campaigner Adam McGibbon calling it a “sickening irony” that the UK was still providing support as COP26 host.

UKEF, which helps British companies win contracts and make investments abroad by offering loan guarantees and insurance, has faced growing criticism in recent years over its backing of oil and gas projects.

An inquiry by parliament’s Environmental Audit Committee last year concluded UKEF’s support for fossil fuels was “unacceptably high”. The committee, which at the time included now Environment and International Development Minister Lord Zac Goldsmith, said that while renewable energy projects in high-income countries had recently received a boost, this was “not reflected in support to low- and middle-income countries”.

A UKEF spokesperson defended the agency’s record on climate change, saying: “UKEF’s mission is to support all viable UK exports and we are also increasing our support for renewable sectors with £2 billion recently allocated to our direct lending facility for clean growth and renewable energy projects.”

An independent assessment ranked UKEF third in a 2019 league table comparing export credit agencies’ support for sustainable projects, having contributed more than France and Germany combined.

Photo credit: Number 10/Flickr/CC BY-NC-ND 2.0

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