A cross-party group of MPs has accused a government agency of undermining the UK’s efforts to tackle climate change.
A new report by the environmental audit select committee claims UK Export Finance’s (UKEF) support for fossil fuel energy is ‘unacceptably high’ with the majority of investments in projects in low and middle-income countries.
UKEF works alongside the Department for International to provide finance and insurance to help exporters win, fulfil and ensure they get paid for export contracts.
The committee report claims that UKEF’s activities are the ‘elephant in the room’ and are undermining the UK’s international climate and development targets
It adds they also risks locking poor countries into high-carbon dependency for decades to come.
The MPs have called on the UKEF to end its support for new fossil fuel projects by 2021, and to align its work with achieving net zero emissions by 2050.
According to the report, UKEF has spent £2.6 billion over a five-year period to support the UK’s global energy exports.
Of this, 96% (£2.5 billion) went to fossil fuel projects, with £2.4 billion going to fossil fuel projects in low and middle-income countries.
Last month, a report from the Committee on Climate Change (CCC) highlighted UK Export Finance as an area that ‘needs further progress’, stating that in the UK ‘export finance is not aligned with climate goals, and often supports high-carbon investments’.
‘The government claims that the UK is a world leader on tackling climate change, but behind the scenes the UK’s export finance schemes are handing out billions of pounds of taxpayers money to develop fossil fuel projects in poorer countries. This locks them into dependency on high carbon energy for decades to come,’ said committee chair, Mary Creagh.
‘This is unacceptable. It is time for the government to put its money where its mouth is and end UK Export Finance’s support for fossil fuels.’
A UK Export Finance spokesperson said: ‘The UK Government fully recognises the importance of tackling climate change and the need for a mix of energy sources and technologies as the world transitions to a low carbon economy.
‘We welcome the committee’s report and are working with colleagues across government to consider our response.’