Our court case against the UK government funding a mega gas project in Mozambique
In December 2021, we took the UK government to court, challenging UK Export Finance’s decision to fund a mega gas project in Mozambique. In March 2022, a High Court judge ruled this funding was “unreasonable” and, ultimately, unlawful. However, a split decision from the High Court meant the case wasn't a clear-cut “win” or “lose,” and it was heard again at the Court of Appeal in December 2022. In January 2023, the Court of Appeal ruled against our legal challenge, and permission to appeal was denied by the Supreme Court in June 2023, bringing an end to our case.
Of course this is very disappointing news, but it doesn't change our firm belief that the UK government shouldn't be supporting this or any other fossil fuel projects.
Why did we take the UK government to court?
Our judicial review challenge, a process where a judge reviews the lawfulness of a decision of action made by a public body, was initially heard at the High Court between 7 and 9 December 2021. The judges examined the government’s decision to pledge $1.15bn of UK Export Finance (UKEF) to an offshore Liquid Natural Gas (LNG) project in Mozambique.
The grounds of the challenge were that financing for the Mozambique LNG project was permitted after it was incorrectly judged to be compatible with the Paris Agreement. We argued this decision was reached without proper assessment of the development’s climate impacts against the international treaty’s terms.
The Paris Agreement, or Paris Climate Deal, is a legally binding agreement between 196 countries to reduce carbon emissions and limit global warming to 1.5°C.
It also compels nations to address the loss and damage caused by climate impacts, and commits finance to help developing countries tackle and adapt to climate change.
The Agreement was reached at the UN climate talks in Paris (COP21) in 2015, and came into force the following year.
The total emissions for the new gas field weren’t calculated as part of the government’s approval process, nor were they evaluated against the objective of limiting global temperature rise to 1.5 degrees as set out in the Paris Agreement. This is why we deemed the decision to be unlawful.
Funding a massive new gas field instead of renewables is also a clear contradiction of the UK’s obligation to help other countries meet their own climate targets.
What was the outcome of the legal challenge?
On 15 March 2022, Mrs Justice Thornton, one of 2 judges who heard the case, ruled that the decision to support Mozambique LNG was unlawful. This was because UKEF had no rational basis to find the project was compatible with the UK's commitments under the Paris Agreement, partially due to UKEF failing to assess the project’s total emissions impact by taking into account those produced through the “end-use” of the gas, for example, when combusted in power plants. Mrs Justice Thornton also found that Ministers were deprived of an adequate understanding of the scale of emissions impact from the project.
This was a highly significant ruling, but in an extraordinary legal event, the judgment was split: while Mrs Justice Thornton upheld the grounds, Lord Justice Stuart-Smith dismissed them – with no majority view established.
The court instead disallowed the case on the basis that full consensus wasn’t reached by both judges, while also granting us permission to appeal. Our appeal was heard in December 2022, and in January 2023 the Court of Appeal rejected our challenge. We then requested permission to appeal from the Supreme Court, but this was denied in June 2023, bringing our case to an end.
While this is a very disappointing ruling, the case has had many successes. We’ve increased the legal scrutiny of the financiers of the Mozambique LNG project, not just in the UK but around the world. Plus launching this case helped secure a UK government policy to stop new investment in international fossil fuels using public funds.
And this ruling doesn't change our firm belief that the UK government shouldn't be supporting the Mozambique gas project, or any fossil fuel project at home or abroad. We'll continue our fight against fossil fuels as we stand in solidarity with Friends of the Earth Mozambique and the communities facing violence, disruption and instability due to this mega gas project.
How has the campaign continued?
In July 2023 we wrote to UKEF asking them to commit to reviewing their financial support for the Mozambique LNG project. This follows the credit agencies from the US and the Netherlands reviewing their financial arrangements, which together are $5.3 billion, over a third of the project's total $14.9 billion cost.
The US and Dutch governments will review their support before releasing any money to the project, due to ongoing security and humanitarian concerns in the region. The project has been put on hold for 2 years due to these security issues.
UKEF has already successfully moved investments into renewables, since the UK ended investments in fossil fuels in 2021. They now have the opportunity to demonstrate further leadership by reviewing their commitment to this harmful fossil fuel project.
Fuelling war: conflict in Cabo Delgado
In 2010, deposits of liquid natural gas (LNG) were discovered off the coast of the Cabo Delgado region of Mozambique. Since then, the amount of interest and money flowing into Cabo Delgado has generated a huge amount of conflict. Local people have been stuck between several opposing groups, including the Mozambique government which has been putting the interests of foreign investors first, an increased presence of private security forces, and an armed insurgency. This has led to reports of human rights abuses including killings of local people, extorting and blackmailing of families for the financial compensation they received from Total, abductions and forced marriages.
The Mozambique government is promoting a narrative of "foreign Islamic terrorists" disrupting the LNG projects, but this doesn’t represent the reality of the situation, nor reflect the role that the LNG projects have had in drawing those eager to cash in, and fuelling violence in an impoverished region of a country which is both one of the poorest in the world, and still recovering from a bloody civil war. Since 2017 thousands of civilians have been killed, and almost 700,000 have been forced to flee – being chased from their homes with very few possessions.
Beyond the conflict, 550 families were directly displaced via corporate land grabs, and the blocking of access to fishing grounds, to make way for the infrastructure required for the LNG projects. Promises from the LNG industry of new land and jobs have not been met, and displaced families now struggle to make a living without their traditional livelihoods.
In April 2021 Total declared a "force majeure" – a clause in contracts that removes liability for natural and unavoidable catastrophes, including armed conflict – and evacuated the Mozambique LNG site due to the conflict. The company is now gearing up to restart operations.
Our sister organisation, Justiça Ambiental! (Friends of the Earth Mozambique), has aptly summarised the situation using an African proverb: "when the lion and the elephant fight, it is the grass that suffers".
The project contributes to climate and nature breakdown
The LNG project proposed in Mozambique involves drilling for gas on the seabed, then transporting the gas to an onshore station where it’s turned into liquid form and then shipped to foreign buyers. This liquefaction process is incredibly energy intensive, making it even worse for the environment than natural gas drilling.
Research by Friends of the Earth and the New Economics Foundation shows that the Mozambique LNG project will produce between 3.3 and 4.5 billion tonnes of CO2 equivalent over its lifecycle, more than the combined annual greenhouse gas emissions of all 27 EU countries.
By Mrs Justice Thornton’s own calculations using the Department for Business, Energy and Industrial Strategy’s (BEIS) assessment of project emissions (produced for the PM after Ministers approved the financing without it), this accounts for 0.2% of the remaining global carbon budget if the aim of keeping within 1.5 degrees of warming is to be met with just a 66% chance of success. It’s also estimated that the construction phase of the project alone will increase Mozambique’s emissions by up to 10%.
In addition, the LNG projects sit on the uniquely beautiful and pristine Cabo Delgado coastline, as well as neighbouring UNESCO biosphere Quirimbas Archipelago. The projects risk polluting and causing irreversible damage to these important nature sites.
The financial risks
A 2021 report by the International Energy Agency – which was commissioned by the UK government and welcomed by COP26 president Alok Sharma – found that many LNG liquefaction facilities currently under construction or at the planning stage are surplus in a net zero emission scenario. These projects will therefore aggravate climate breakdown while also risking becoming stranded assets and creating a huge unnecessary liability and cost for the Treasury.
In December 2021, E3G reported that conflict, corruption and economic distortion have stymied predicted economic benefits. Further, shifts in energy policies globally mean that future demand for gas is decreasing. This increases the risks of the Mozambique LNG project and greatly reduces the potential benefits, including those supposedly labelled for addressing Mozambique’s pressing development needs.
Fund climate solutions not climate destruction
In December 2020, former prime minister Boris Johnson announced that UKEF will no longer fund fossil fuel projects abroad. Under the current policy, funding for the Mozambique LNG wouldn't be allowed, specifically because projects like this aren't considered in line with the Paris Agreement. This is one of the final legacy projects of the previous policy. It’s also one of the largest financial packages for fossil fuels ever offered by UKEF.
Mozambique is one of the poorest and most vulnerable countries in the world. It's ranked 181 out of 187 countries in the UNDP's Human Development Index, and is considered one of the most climate vulnerable nations in the African continent. In August 2021, a report by UNICEF ranked Mozambique 10th in the world in terms of countries where children are most at risk in terms of the impacts of climate change. The UK has a responsibility to support Mozambique – but doing so in a way that creates armed conflict, encourages human rights abuses and contributes to climate breakdown will help no-one.
The UK government must immediately withdraw its funding and support for the Mozambique LNG project, and instead invest in community-owned renewable energy and other sustainable projects in the region.
