After the announcement was made during the Climate Ambition Summit on Saturday, just five years since the landmark Paris Climate Agreement, the UK is to become the first in the international forum G-20 to end its overseas oil and gas funding in order to accelerate climate change efforts.
The new policy is expected to see the UK end export finance, aid funding, and trade promotion for new crude oil, natural gas, or thermal coal projects, with ‘very limited exceptions’, among which is allegedly the UK’s Mozambique gas project.
Prime Minister Boris Johnson said ahead of the summit: “Climate change is one of the great global challenges of our age, and it is already costing lives and livelihoods the world over. Our actions as leaders must be driven not by timidity or caution, but by ambition on a truly grand scale.
“That is why the UK recently led the way with a bold new commitment to reduce emissions by at least 68% by 2030, and why I’m pleased to say today that the UK will end taxpayer support for fossil fuel projects overseas as soon as possible.”
The announcement is projected to help boost the shift to green technology and renewable energy, while also creating jobs across the UK and spurring international growth.
The step is seen as a significant change, especially in comparison to the government’s support of the industry over the last four years, as the UK provided £21bn of UK oil and gas exports through trade promotion and export finance.
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The government is planning to work with the UK’s oil and gas sector to encourage the move to low-carbon energy sources through the North Sea Transition Deal, while supporting areas like Teesside and Aberdeen to become global hubs for wind energy, carbon capture, and other future clean technologies.
The new target is within the recently announced Ten Point Plan for a green industrial revolution, estimated to create and support up to 250,000 British jobs by 2030.
The country has also pledged £11.6bn in International Climate Finance over the next five years.
The Institutional Investors Group on Climate Change CEO Stephanie Pfeifer said in a statement: “The UK Government’s announcement follows the significant milestone for the financial community as 30 leading global asset managers, representing assets under management of over $9tn, today committed to the goal of net-zero by 2050. We hope to see more commitments from international policymakers signalling progressive action in support of the Paris Agreement in the coming months as we look ahead to COP26.”
The new oil and gas policy for overseas explorations will be implemented after a short period of consultation and is intended to come into force as soon as possible and before COP26 next November.
The Mozambique gas project will allegedly be exempt from the new policy
While the UK funding for overseas oil and gas projects is on its way out, according to environmental organisation Friends of the Earth, a major gas project in Mozambique is one of the exceptions, which will continue unaffected by the new policy.
The Mozambique offshore deepwater gas production facility is being developed by Total and it is targeting to extract 43 million tonnes of gas per year, up to four billion cubic feet of gas a day.
Friends of the Earth issued a claim for judicial review of the government’s decision to invest in this project in early September and is currently seeking a declaration that the funding decision has been made unlawfully.
The organisation believes that the UK Government has breached its own policy when it agreed to fund the project, disregarding international standards on the environment and human rights, as well as by not disclosing its assessment of the impacts of the project. It has also pointed out that the Mozambique investment did not properly consider the Paris Agreement.
Friends of the Earth climate campaigner Rachel Kennerley said it a statement: “It is great that the PM has recognised we can’t continue to fund climate-wrecking oil and gas overseas. Ending investment in all overseas fossil fuel projects will help us meet our climate commitments, but there can be no exceptions.
“Under the new rules announced today, a climate-wrecking gas mega-project in Mozambique that has displaced thousands of people would be in doubt, yet the decision to spend $1bn on this project was decided just a few months ago.
“There’s still a chance for the government to end all support for fossil fuel projects overseas, with no exceptions, before the UK hosts the UN climate talks at the end of 2021.”