UK Export Finance (UKEF) has committed to provide direct loans and guarantees to banks to support the design, build and operation of the $20bn project, led by French energy company TotalEnergies.
The environmental campaign group’s legal action over the decision failed in a lower court, but it is now challenging the ruling at a three-day hearing at the Court of Appeal.
Its lawyer Jessica Simor told the court on Tuesday that the British government wrongly decided funding the project was compatible with “the United Kingdom’s commitments under the Paris Agreement”.
She said the project “will result in an aggregate increase in global emissions”, adding in court documents that the government failed to quantify the “indirect downstream greenhouse gas emissions” from the project.
However, James Eadie, representing Britain’s Department of International Trade, said in written arguments that UKEF correctly decided that LNG can “act as a transition fuel by displacing the use of more polluting fuels such as coal and oil”.
He added the project had the “potential to lift millions of Mozambicans out of poverty,” and that UKEF “rightly considered that the Paris Agreement imposes no prohibition on developed countries assisting developing countries”.
TotalEnergies EP Mozambique Area 1 Limitada, which will operate the gas facility, and Moz LNG1 Financing Company Limited, through which the project will be funded, are interested parties to the appeal.
Adam Heppinstall, representing the two companies, said in court documents that Friends of the Earth’s arguments ignored key parts of the Paris Agreement, “such as the eradication of poverty [and] sustainable development”.
A spokesperson for TotalEnergies said the project “will deliver a range of social and economic benefits to Mozambique and is a key part of Mozambique’s aim to diversify its economy”.
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