UK Government climate targets branded ‘laughable’ as UK Export Finance supports new oil refineries abroad

On the week that the Intergovernmental Panel on Climate Change has released its report on the scale of the challenge to limit the dangers of climate change, the near-simulanteous announcement of new UK Government support for oil and gas abroad has been labelled “staggering.”

UK Export Finance (UKEF), the UK’s export credit agency which underwrites loans and insurance for risky export deals as part of efforts to boost international trade, announced on Tuesday that it is considering finance for an expansion of an oil refinery in Bahrain which would allow its total output to increase up to a maximum of 380,000 barrels per day.

Adam McGibbon, Climate Change Campaigner at Global Witness, said:

“As the world reels from the news that we have twelve years to prevent catastrophic climate breakdown, today’s announcement by the government is staggering. The UK claims to be a climate leader, but it continues to spend billions pumping fossil fuels out of the ground abroad.

Until the government commits to phase out its fossil fuel lending, it’s claims of climate leadership are laughable. The only way forward is to start winding down the financing for fossil fuel projects, immediately.”

UK Export Finance has a history of lending overwhelmingly to fossil fuels, flying in the face of Government rhetoric on the UK becoming a climate change leader. Research conducted by the Overseas Development Institute, CAFOD and others shows that in the last measurable period, 99.4% of all energy support provided by UK Export Finance (UKEF) went to fossil fuels. An analysis by Carbon Brief shows that the £4.8 billion total UKEF support for fossil fuel projects from 2010-16 is equal to the UK’s total spend on its International Climate Fund for a similar period, 2011-17, which came to £4.9 billion.  

McGibbon continued, “With one hand, the UK claims to be a climate leader, and spends billion on fighting climate change abroad. With the other hand, it provides billions to make climate change worse by funding fossil fuel projects worldwide. This hypocrisy has to stop, and Theresa May needs to phase out UK Export Finance’s fossil fuel support to zero if we are to have a hope of staving off the worst effects of climate change.”