Friends of the Earth sues Britain over Mozambique LNG project funding

LONDON (REUTERS, BLOOMBERG) – Britain’s decision to help finance a US$20 billion (S$27.3 billion) gas project in Mozambique faces a legal challenge by environment activists who say it clashes with Britain’s global commitments to fight climate change.

Friends of the Earth has asked London’s High Court to overturn approval for government funding it says should never have been considered compliant with the Paris Agreement.

Friends of the Earth are targetting US$1.15 billion in British government financing.

UK Export Finance (UKEF) has committed to provide this amount in direct loans and guarantees to banks to support the design, build and operation of the liquefied national gas (LNG) project led by French energy company TotalEnergies.

Friends of the Earth said in a statement that the project was incorrectly judged to be compatible with the 2015 United Nations Paris climate agreement, without proper assessment of its climate impacts.

The environmental pressure group also said that the project contradicts Britain’s obligation to help other countries meet their own climate targets and that the government should instead invest in renewable energy and other sustainable projects.

The challenge just weeks after Britain hosted the COP26 climate talks in Glasgow that ended with an agreement for nations to pursue efforts to step up emissions cuts to prevent dangerous climate change.

Head of legal at Friends of the Earth Will Rundle said: “The UK has poured an eye-watering amount of taxpayer money into developing a huge new gas field in Mozambique right in the middle of a climate emergency.”

A British government spokesman said: “We remain confident that UK Export Finance follows robust and internationally recognised due diligence before providing any support for overseas projects,” adding: “We do not comment on ongoing legal proceedings”.

A TotalEnergies spokesman said that the government in Mozambique had shown strong support for the project, which is a fundamental part of the southern African country’s energy plan.

“TotalEnergies EP Mozambique Area 1 Limitada and Moz LNG1 Financing Company Limited are supporting the UK Government’s decision to finance this project, and are not in the position to comment on a pending judicial case, where they are not the Defendant,” the spokesman said.

The gas project is seen by some as critical to transforming the economy and development of Mozambique, one of the world’s least developed nations, but environmental campaigners say LNG projects, while cleaner than other fossil fuels, still lock in harmful emissions for decades.

In April, TotalEnergies declared force majeure on the LNG project following insurgent attacks.

The only drawdown on the UKEF financing has been for payment of the UKEF premium and so its net exposure is currently zero.

In September, UKEF published a new Climate Change Strategy, setting out its objectives to decarbonise its portfolio after Prime Minister Boris Johnson said in April that Britain would cut carbon emissions by 78 per cent by 2035, almost 15 years earlier than planned.

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