Home FinanceEnergy & Environment ‘Ambitious’ UK To End Backing Of Overseas Fossil Fuel Projects

‘Ambitious’ UK To End Backing Of Overseas Fossil Fuel Projects

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The UK government will end direct support in the form of export finance or aid funding for fossil fuels, according to Prime Minister Boris Johnson.

The move, announced on Saturday (December 12), would make the UK the first major economy to commit to ending public finance for overseas fossil fuel projects, and mark a major shift in public policy.

In the recent past, the UK Export Finance agency has helped British oil and gas companies with billions of dollars to expand their operations in countries such as Argentina, Brazil, Iraq and Russia to name a few.

But the domestic British energy market has already moved away from coal, and is steadily seen to be limiting exposure to oil and gas. Johnson’s announcement aims to bring policy support parity at home and abroad.

In a statement announcing the change of direction, the Prime Minister 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. I’m pleased to say that the UK will end taxpayer support for fossil fuel projects overseas as soon as possible.”

The government said that while it would end further state backing for coal, natural gas and oil projects overseas, including via development aid, export finance and trade promotion, there would only be “very limited exceptions” for natural gas-fired power plants within “strict parameters” in line with the Paris Climate Agreement which the UK is a signatory of.

Johnson has already committed the UK to a new carbon footprint reduction target of 68% by 2030; well above the European Union’s target of 55% as the British prepare to depart the economic bloc on December 31, 2020. The policy moves also precede a UN virtual climate meeting which the UK is hosting on Saturday.

Nearly 80 world leaders are expected to attend and Pope Francis will also address the meeting. Major importers China, Japan, South Korea and India will be taking part, but major fossil fuel and mining nations Australia, Russia, Saudi Arabia and South Africa will not be involved.

The virtual gathering is taking place after the COVID-19 pandemic caused a postponement of the annual Conference of the Parties to the Paris Climate Agreement, due to take place in Glasgow this year.

Rich nations had promised to mobilize $100 billion a year from 2020 under the Paris agreement inked five years ago. However, the cash commitments have not been as forthcoming as expected and any initial impetus was subsequently dampened by the onset of the pandemic.

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