A legal challenge to the decision by the UK government to approve $1.15bn funding for a liquified natural gas (LNG) project in Mozambique began at the High Court in London today.
The case, brought by the campaign group, Friends of the Earth, centres on whether the project would reduce greenhouse gases and would be compatible with the Paris climate agreement.
The court heard that the government’s export credit agency, UK Export Finance (UKEF), and the Treasury approved funding in July 2020 on the basis that the scheme was likely to result in a net reduction in global emissions.
Friends of the Earth said this decision was reached without a proper assessment of the climate impacts.
Jessica Simor QC, for Friends of the Earth, said the conclusions reached by UKEF were “manifestly irrational” and “erroneous” and contained “glaring flaws” in their reasoning. She told the court:
“Conclusions were reached for which there was absolutely no evidence.”
The court heard that UKEF assessed the greenhouse gas emissions resulting from production of the gas in Mozambique (known as scope 1 and 2 emissions). These were likely to add 10% to Mozambique’s total.
But UKEF said it was not possible to quantify the emissions, likely to be much higher, from the use of the gas (scope 3 emissions).
Instead, its gas market consultant, Wood Mackenzie, carried out what was described as a “high level qualitative assessment” of the volume of emissions that would be potentially displaced by the project. This was based on an assumption that the Mozambique gas would replace higher carbon coal and oil in electricity generating stations in India or China.
Ms Simor said
“This makes no sense to us. It is frankly absurd.”
“It is not possible to reach the conclusion that the LNG project would lead to a reduction in global emissions and be in alignment with the Paris Agreement low emissions pathway without quantifying LNG emissions.”
This was a “vital element in any meaningful analysis”, she said.
Ms Simor said it was possible to calculate the greenhouse gas emissions from burning LNG, despite what UKEF said. Wood Mackenzie was not a climate expert, she said, and was not qualified to make the assessment it was asked to do.
It was wrong to assume all the gas would go to India or China, she said, when project assessments had predicted 22% would go to Europe, 13% to China and only 9% directly to India.
Friends of the Earth also argued that the Wood Mackenzie assessment was based on limiting warming to 2C. The impact of the Mozambique project was never assessed against the global ambitions to limit of 1.5C, which was the central aim of the COP26 climate talks in Glasgow last month.
The court heard that some government ministers, including the foreign, business and international development secretaries and the COP26 secretariat had opposed financing the Mozambique project. But there were concerns in Whitehall that the government could be sued if it pulled out. It would also be embarrassing to the UK, given its role in the African Development Bank, which was co-funding the scheme, the court was told.
Six months after the approval, in December 2020, Boris Johnson promised to end public support for overseas fossil fuel industries. But this policy was not applied retrospectively to the Mozambique project.
Today, 17 scientists and academics sent an open letter today to Boris Johnson, urging the UK government to withdraw its funding.
They warned that gas from the project would release around four billion tonnes of carbon dioxide when it was burned. This was incompatible with the warming limit of 1.5C and risked the UK’s “credibility as a global leader on the climate crisis”, they said.
Mozambique is on the most vulnerable countries in the world to climate change, particularly from sea level rise along its low-lying coast. Friends of the Earth said the LNG projects risked polluting and causing irreversible damage to important wildlife sites on the Cabo Delgado coastline and the neighbouring UNESCO biosphere Quirimbas Archipelago.
The government’s case will be heard over the next two days. It is expected to argue that there was no specific standard that required quantification of scope 3 emissions and so it did not do it.