Last reviewed 8 October 2019

The Government has been accused of “utter hypocrisy” for rejecting calls from MPs to stop spending billions on overseas fossil fuel projects while pledging action at home on climate change.

In a letter (dated 15th August 2019 but only released this week) Liz Truss, the Secretary of State for International Trade, rejected a cross-party recommendation by Parliament’s Environmental Audit Committee (EAC) to rule out the UK financing fossil fuel projects by the end of 2021.

EAC argues that the scale and impact of UK Export Finance’s (UKEF) financing of fossil fuels in developing countries is “unacceptable” and undermines the UK’s climate commitments. Commenting on the report Chair Mary Creagh said:

“The Government claims that the UK is a world leader on tackling climate change, but behind the scenes the UK’s export finance schemes are handing out billions of pounds of taxpayers’ money to develop fossil fuel projects in poorer countries. This locks them into dependency on high carbon energy for decades to come.”

In her response, Truss rejected recommendations to phase out fossil fuel subsidies arguing that UKEF’s Business Plan supports renewable energy “as a priority sector” but said that UK oil and gas companies needed the continuity of UKEF support during the transition.

“ln developing countries, energy security is central to continued development and poverty alleviation. Government's response to the Committee's recommendations reflects the continued need for UKEF to fulfil its statutory purpose by remaining responsive to the evolving needs of UK companies and their overseas buyers for finance,” Truss states in the letter.

Concern over the multibillion finance package for fossil fuel projects has been a problem for the Government for some time. The campaign and research group, Global Witness, claims UKEF supported £4.8 billion in fossil fuel projects from 2010-16, and that any new fossil fuel infrastructure, anywhere, would undermine the Paris Agreement goal of holding global warming below 1.5 degrees Celsius above pre-industrial levels.

Adam McGibbon, Senior Campaigner at Global Witness said: “The utter hypocrisy on display by the UK Government is outstanding. The UK is trying to portray itself as a global climate leader ahead of the UN climate summit in Glasgow next year, but this stands violently at odds with reality. Not only is the UK directly funding projects that are contributing to climate breakdown, it is locking developing nations into dirty development that will harm the people most vulnerable to its effects.”

EAC says that projects supported by UKEF should be able to demonstrate that they have considered a range of potential lower-carbon and renewable options and selected the option with the lowest feasible emissions and should also state how its strategy will support a 'just transition' for workers in the UK who currently benefit from its support.