The UK government has withdrawn $1.15bn (£870m) support for a controversial gas project in Mozambique.

The business secretary, Peter Kyle, announced the UK government had ended a UK Export Finance (UKEF) package for the liquified natural gas development, operated by TotalEnergies.

The support was approved by the Boris Johnson government in July 2020 on the basis that it was likely to result in a net reduction in global emissions.

But this claim was twice challenged in court by the campaign group, Friends of the Earth, in 2021 and 2022.

The project was paused in 2021 because of the deteriorating local security situation, Mr Kyle said. In preparation to restart the project, UKEF was presented with a proposal to amend the original financing terms.

Mr Kyle said officials had evaluated the risks of the project:

“it is the view of His Majesty’s Government that these risks have increased since 2020.

“This view is based on a comprehensive assessment of the project and the interests of UK taxpayers, which are best served by ending our participation in the project at this time.

“Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country.”

Friends of the Earth (FOE) welcomed the government’s decision. It said estimated gas production from the field could generate around 4.5bn tonnes of greenhouse gas emissions over its lifetime – more than the combined annual emissions of all 27 EU countries.

FOE’s chief executive, Asad Rehman, said:

“The UK government is absolutely right to withdraw support for this deeply damaging and controversial development – and deserves credit for doing so.  
 
“This Mozambique gas project is a huge carbon timebomb, linked to serious human rights abuses. It should never have been given UK taxpayer-funded support in the first place. 
 
“We now urge other countries to follow suit and end their backing for this destructive project. 

“The UK should instead support countries like Mozambique – which are on the frontline of the climate crisis – by helping them adapt to its impacts and invest in their abundant clean energy resources to bring affordable energy to the 60% of the country locked into energy poverty.”

Reuters reported that the Dutch government also said it had withdrawn a $1.1bn export insurance request for the project.