UK to end financial support for overseas fossil fuel projects
The policy, announced at the Climate Ambition Summit on 12 December, will see the UK end export finance, aid funding, and trade promotion for new crude oil, natural gas, or thermal coal projects, with ‘very limited’ exceptions.
Over the last four years, the government supported £21 billion (€23.1 billion) of UK oil and gas exports through trade promotion and export finance. The policy will be implemented after a short period of consultation and is expected to come into force ‘as soon as possible’, ahead of COP26 in November.
The move will accelerate the shift to supporting green technology and renewable energy, creating jobs across the UK and driving international growth in the industry.
The government will work with the UK’s oil and gas sector to support the move to low carbon energy sources through the North Sea Transition Deal, ensuring areas like Teesside and Aberdeen can become hubs for carbon capture, wind energy, and other clean technologies.
The Climate Ambition Summit was open to leaders ready to showcase new commitments, including Nationally Determined Contributions (NDCs) to reduce greenhouse gas emissions, strategies to reach Net Zero, climate finance pledges, and innovative plans to adapt and build resilience to climate change.
Ahead of the summit, Boris Johnson said: “Climate change is one of the great global challenges of our age, and it is already costing lives and livelihoods the world over. Our actions as leaders must be driven not by timidity or caution, but by ambition on a truly grand scale.
“That is why the UK recently led the way with a bold new commitment to reduce emissions by at least 68% by 2030, and why I’m pleased to say that today the UK will end taxpayer support for fossil fuel projects overseas as soon as possible.
“By taking ambitious and decisive action today, we will create the jobs of the future, drive the recovery from coronavirus, and protect our beautiful planet for generations to come.”
Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC), commented: “IIGCC welcomes the UK Government’s announcement to end direct taxpayer support for fossil fuel projects overseas. The global economic transition to net-zero will be secured through both the private and the public sectors committing to real action.
“The UK Government’s announcement follows the significant milestone for the financial community as 30 leading global asset managers representing assets under management of over $9 trillion (€7.4 trillion) today committed to the goal of net-zero by 2050.
“We hope to see more commitments from international policymakers signalling progressive action in support of the Paris Agreement in the coming months as we look ahead to COP26.”