Almost all of the UK government's financing for energy infrastructure abroad went to fossil fuel projects in low and middle-income countries over a five-year period.
That is according to report published yesterday by a cross-party group of MPs, which said that the UK's foreign investments are undermining its international climate targets.
It reveals that UK Export Finance (UKEF) spent £2.6bn on energy exports between 2013 and 2018, 96% of which went to fossil fuel projects, with £2.4bn going to developing countries.
The Environmental Audit Committee (EAC) said this risks locking these nations into high-carbon dependency for decades, and is the “elephant in the room“ when it comes to tackling climate change.
EAC chair, Mary Creagh, said: “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 is unacceptable. Achieving net-zero emissions by 2050 will mean ending our addiction to dirty fossil fuels.“
Meanwhile, an independent group of global leaders, The Elders, said that UKEF revives “painful memories of past exploitative behaviour“ from rich countries that act progressively at home while exporting their problems abroad.
It is also thought that UKEF enables fossil fuel projects by sending investor signals to the market.
In response, the EAC recommended that the government department end its support for new fossil fuel projects by 2021, and align its work with achieving net zero emissions by 2050.
The MPs also suggested it report on emissions from all the projects it supports, as well as the portfolio totals, in a single document so it is easy to access and compare investments.
Moreover, UKEF should be able to demonstrate that it has considered lower-carbon and renewable options, explain how it supports a 'just transition', and follow Sweden's lead by introducing a 5% cap on gross lending to fossil fuel operations as a proportion of total support.
“It is time for the government to put its money where its mouth is and end UKEF's support for fossil fuels,“ Creagh added.
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