Legal

Challenge to government funding of Mozambique gas project goes to Court of Appeal

The Court of Appeal will decide whether ministers acted lawfully in agreeing $1.15 billion of financing for a liquified natural gas project in Mozambique, it was confirmed this afternoon.

Royal Courts of Justice, London. Photo: DrillOrDrop

DrillOrDrop reported yesterday that two judges had failed to agree on a legal challenge by Friends of the Earth.

Their case at the High Court tested the compliance of the Mozambique decision with the Paris climate agreement. It centred on whether UK Export Finance (UKEF), the export credit agency, should have assessed the total climate impact of the project.

One of the judges, Mrs Justice Thornton, said yesterday the decision, one of UKEF’s largest ever financial packages, was unlawful because it did not assess carbon emissions from the end-use of the gas. There was no rational basis, she said, to show the financing was consistent with the Paris Agreement and international ambitions to limit global temperature rise to 1.5C.

The other judge, Lord Justice Stuart-Smith, said the challenge should fail because there was no legal requirement to quantify these emissions.

The split decision meant the challenge failed. But, in the final ruling, the judges took the unusual step of giving Friends of the Earth permission to appeal their ruling.

More details on the judges’ findings

Friends of the Earth said today that its case had failed in the High Court on a technicality. The organisation’s head of legal, Will Rundle, said:

“Our claim that the government’s export credit agency acted unlawfully has been vindicated by a High Court judge, but UK Export Finance has been let off the hook on a technicality, for now. Our fight for climate justice means that an appeal is now inevitable, and we remain confident of success in light of the compelling findings clearly laid out by Justice Thornton.

“In the meantime, there are big questions for UKEF and for the government on whether it can feasibly still support this project when a judge has plainly said that its funding cannot rationally be considered compliant with the law.

“This case has shown that making poor decisions at the expense of our planet’s future leaves the government increasingly vulnerable to climate litigation.”

A spokesperson for the government welcomed the judgement yesterday and said ministers remained “confident that UK Export Finance follows robust and internationally recognised due diligence before providing any support for overseas projects”.

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