Court of Appeal to hear Mozambique gas legal challenge

The Court of Appeal will decide whether ministers acted lawfully in approving $1.15bn of financing for a gas mega-project in Mozambique, after two High Court judges failed to agree, following a legal challenge by the environmental campaign group Friends of the Earth.

Although one of the judges concluded the government had acted unlawfully, the split decision means the judicial review has not yet succeeded.

The claim, brought to the High Court by the environmental campaign group, examined the government’s decision to fund the Mozambique liquified natural gas (LNG) project through its export credit agency, UK Export Finance (UKEF), as approved by the Treasury and the Department for International Trade (DfID).

Justice Thornton, one of two judges who heard the case, agreed with Friends of the Earth’s assessment that the decision to fund the new development, one of UKEF’s largest ever financial packages, was granted without a complete understanding of its climate impacts. She concluded that there was “no rational basis” to show that the financing of the project was consistent with the terms of the Paris Agreement and international ambitions to limit global temperature rise to 1.5 degrees, meaning its approval was therefore unlawful.

She held that UKEF had failed to lawfully assess the project’s total emissions impact by taking into account those produced through the ‘end-use’ of the gas, for example through its combustion in power plants. It was also inconsistent in its conclusions about the project’s likely effects on global emissions, and as such ministerial decision makers were misled.

Friends of the Earth says that Justice Thornton’s damning assessment poses critical questions for UKEF over its responsibility to act in accordance with the law. The group deems UKEF’s position that it can finance the project on the basis that the terms of the Paris Agreement are ambiguous and at times unworkable, entirely inconsistent with the government’s public-facing endorsement of the internationally-binding treaty. It is also inconsistent with current government policy on overseas finance.

Friends of the Earth contends that its case failed to succeed on a technicality, owing to the fact that judgment was split between two judges where a majority view could not be reached. This is because the second judge, Lord Justice Stuart-Smith’s conclusions starkly contrasted those of his counterpart.

Friends of the Earth maintains its view that a claim should succeed where any High Court Justice identifies unlawful conduct, but the court has disallowed the case on the basis that an overall consensus was not reached by the whole court. This means that an appeal is now required in order to reach a definitive outcome. In an unusual step the judges gave permission for their decision to be appealed to the Court of Appeal.

The development of the gas project has also been linked to conflict, human rights abuses and the displacement of hundreds of thousands of Mozambicans. The lives and livelihoods of many living in the Cabo Delgado region have already been turned upside down as a result of its development. This is set to become worse still when the country, already extremely vulnerable to multiple climate impacts, becomes increasingly affected by the Earth-warming emissions that the project will create.

Research by Friends of the Earth and the New Economics Foundation shows that the Mozambique LNG project will produce between 3.3 and 4.5 billion tonnes of CO2 equivalent over its lifecycle, more than the combined annual greenhouse gas emissions of all 27 EU countries. By Justice Thornton’s own calculations using the Department for Business, Energy and Industrial Strategy’s (BEIS) assessment of project emissions, this accounts for 0.2% of the remaining global carbon budget if the aim of keeping within 1.5 degrees of warming is to be met, with a 66% probability. It’s also estimated that the construction phase of the project alone will increase Mozambique’s emissions by up to 10%.