Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, whether support for the East African Crude Oil Pipeline is being considered under UKEF.
Answered by Graham Stuart
UK Export Finance (UKEF) has been approached on the project referred to, but no decision has been made.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, pursuant to the Answer of 18 November 2020 to Question 91998 on Fossil Fuels: Export Credit Guarantees, what steps UKEF is taking to conduct that extensive due diligence, including environmental, social, and human rights due diligence and consideration of climate change; and whether that due diligence includes an assessment of potential scope 1, 2, and 3 emissions from those projects.
Answered by Graham Stuart
The projects referred to in the response to Question 91998 are still under consideration, and we cannot comment on potential transactions for reasons of commercial confidentiality.
UK Export Finance (UKEF) has a specialist environmental, social, and human rights (ESHR) team that reviews relevant projects for such risks and impacts (including consideration of climate change) prior to UKEF taking a decision on support. ESHR reviews are undertaken in strict alignment with international frameworks for managing such ESHR risks and impacts, namely the OECD Council Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (OECD Common Approaches) and Equator Principles, which was updated in July 2020 to strengthen requirements related to climate change and human rights. The ESHR team undertakes these reviews to be satisfied that relevant projects should comply with applicable local and relevant international laws, and align with international ESHR standards, before support is provided. Where UKEF provides support to such projects it undertakes on-going ESHR monitoring over the period of that support.
Where a relevant project is identified as having a high potential impact on the environment and/or social matters/human rights, UKEF publishes Category A notices to inform stakeholders of its consideration of such a project.
Furthermore, from 1 April 2020, UKEF has committed to consider how it will take account of climate change within its decision-making processes across all its products. This consideration will be proportionate to the risks and impacts associated with the projects and its support.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, pursuant to the Answer of 18 November 2020 to Question 91998 on Fossil Fuels: Export Credit Guarantees, what each project comprises; and who the project developer in the host country is for the two projects in Brazil.
Answered by Graham Stuart
The projects referred to in the response to Question 91998 are still under consideration by UK Export Finance, and no decisions have been made. It is our policy not to comment on potential transactions for reasons of commercial sensitivity.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, whether UKEF is making an assessment of the potential merits of providing financial support for the East African Crude Oil Pipeline.
Answered by Graham Stuart
UK Export Finance (UKEF) has been approached on the project referred to, and no decision has been made. It is not UKEF policy to comment on potential transactions for reasons of commercial sensitivity.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, how many export licences for the sale or transfer of arms and military equipment to Saudi Arabia have been (a) granted and (b) refused by the Government since 20 June 2019.
Answered by Ranil Jayawardena
HM Government takes its arms export responsibilities seriously and assesses export licence applications in accordance with strict licensing criteria.
Through our rigorous process, 87 export licences were granted for military related items to Saudi Arabia, during the period 20th June 2019 to 29th September 2020.
We will not license the export of equipment where to do so would be inconsistent with the Consolidated Criteria; no licences had to be refused on this basis in the aforementioned period.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, with reference to UK Export Finance support for the Mozambique LNG Project, what her Department’s most recent estimate is of the lifecycle carbon emissions from that project; and what methodology was used to make that estimate.
Answered by Graham Stuart
The Project’s Environmental and Social Impact Assessment presents the direct and indirect (Scope 1 and Scope 2) contribution of the Project to Mozambique’s greenhouse gas emissions (GHG) baseline, which is estimated to account for approximately 6 - 10% of Mozambique’s national GHG emissions. This was estimated in accordance with the GHG Protocol: Corporate Accounting & Reporting Standard developed by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI). The Project’s Scope 3 emissions are produced by the use of the Project’s LNG. Calculating LNG Scope 3 emissions is highly complex and requires details of when, where, how and how much of the Project’s gas volumes will be used. UK Export Finance (UKEF) made some reasonable assumptions about Scope 3 emissions, that it then took into account in its review of the Project. There is scope, however, for the Project to replace / displace more polluting hydrocarbon sources, such as oil and coal, which would result in lower net emissions than using these energy sources.
UKEF considered climate change as part of its review of the Project including considering the potential lock-in risks from the Project. It is not known for certain whether the Project will displace renewable energy potential or lower carbon solutions. However, for Mozambique, the need for financial resources to support the country’s climate resilience is noteworthy and, as per Mozambique’s own Nationally Determined Contribution (NDC), UKEF considers that the financial outputs of this Project will act as a catalyst towards enabling the country’s climate change plans to be fulfilled, and thus to allow investment in the renewables sector.
The International Energy Agency notes that demand for energy cannot be met for the
foreseeable future (i.e. up to 2040) without oil and gas. Even under a sustainable
development scenario, gas is expected to account for 24% of global primary energy
demand in 2040. The Paris Agreement (Article 4.1) recognises that the peaking of
greenhouse gases will take longer for developing countries, such as Mozambique, and the Project sits within Mozambique’s longer-term plans to establish strong social and
economic stability.
The support provided by UKEF takes the form of direct loans or loan guarantees, rather than equity funding.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, with reference to UK Export Finance support for the Mozambique LNG Project, what assessment she has made of the risks of potential carbon lock-in from that project; when that assessment was made; and what methodology was used to make that assessment.
Answered by Graham Stuart
The Project’s Environmental and Social Impact Assessment presents the direct and indirect (Scope 1 and Scope 2) contribution of the Project to Mozambique’s greenhouse gas emissions (GHG) baseline, which is estimated to account for approximately 6 - 10% of Mozambique’s national GHG emissions. This was estimated in accordance with the GHG Protocol: Corporate Accounting & Reporting Standard developed by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI). The Project’s Scope 3 emissions are produced by the use of the Project’s LNG. Calculating LNG Scope 3 emissions is highly complex and requires details of when, where, how and how much of the Project’s gas volumes will be used. UK Export Finance (UKEF) made some reasonable assumptions about Scope 3 emissions, that it then took into account in its review of the Project. There is scope, however, for the Project to replace / displace more polluting hydrocarbon sources, such as oil and coal, which would result in lower net emissions than using these energy sources.
UKEF considered climate change as part of its review of the Project including considering the potential lock-in risks from the Project. It is not known for certain whether the Project will displace renewable energy potential or lower carbon solutions. However, for Mozambique, the need for financial resources to support the country’s climate resilience is noteworthy and, as per Mozambique’s own Nationally Determined Contribution (NDC), UKEF considers that the financial outputs of this Project will act as a catalyst towards enabling the country’s climate change plans to be fulfilled, and thus to allow investment in the renewables sector.
The International Energy Agency notes that demand for energy cannot be met for the
foreseeable future (i.e. up to 2040) without oil and gas. Even under a sustainable
development scenario, gas is expected to account for 24% of global primary energy
demand in 2040. The Paris Agreement (Article 4.1) recognises that the peaking of
greenhouse gases will take longer for developing countries, such as Mozambique, and the Project sits within Mozambique’s longer-term plans to establish strong social and
economic stability.
The support provided by UKEF takes the form of direct loans or loan guarantees, rather than equity funding.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, what steps her Department is taking to ensure the decision to provide £800,000 in UK Export Finance funding to support of the Mozambique LNG Project will comply with (a) the UK’s commitments made under the 2015 Paris Climate Agreement and (b) the COP26 President's recommendation for states to align finance flows with low carbon, resilient development.
Answered by Graham Stuart
The Project’s Environmental and Social Impact Assessment presents the direct and indirect (Scope 1 and Scope 2) contribution of the Project to Mozambique’s greenhouse gas emissions (GHG) baseline, which is estimated to account for approximately 6 - 10% of Mozambique’s national GHG emissions. This was estimated in accordance with the GHG Protocol: Corporate Accounting & Reporting Standard developed by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI). The Project’s Scope 3 emissions are produced by the use of the Project’s LNG. Calculating LNG Scope 3 emissions is highly complex and requires details of when, where, how and how much of the Project’s gas volumes will be used. UK Export Finance (UKEF) made some reasonable assumptions about Scope 3 emissions, that it then took into account in its review of the Project. There is scope, however, for the Project to replace / displace more polluting hydrocarbon sources, such as oil and coal, which would result in lower net emissions than using these energy sources.
UKEF considered climate change as part of its review of the Project including considering the potential lock-in risks from the Project. It is not known for certain whether the Project will displace renewable energy potential or lower carbon solutions. However, for Mozambique, the need for financial resources to support the country’s climate resilience is noteworthy and, as per Mozambique’s own Nationally Determined Contribution (NDC), UKEF considers that the financial outputs of this Project will act as a catalyst towards enabling the country’s climate change plans to be fulfilled, and thus to allow investment in the renewables sector.
The International Energy Agency notes that demand for energy cannot be met for the
foreseeable future (i.e. up to 2040) without oil and gas. Even under a sustainable
development scenario, gas is expected to account for 24% of global primary energy
demand in 2040. The Paris Agreement (Article 4.1) recognises that the peaking of
greenhouse gases will take longer for developing countries, such as Mozambique, and the Project sits within Mozambique’s longer-term plans to establish strong social and
economic stability.
The support provided by UKEF takes the form of direct loans or loan guarantees, rather than equity funding.
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, whether her Department conducted an independent assessment of the potential effect of UK Export Finance's support for Total's LNG Project in Mozambique on (a) human rights and (b) the environment.
Answered by Graham Stuart
In line with its regular policy, UK Export Finance (UKEF) has undertaken an environmental, social and human rights (ESHR) review of the Mozambique LNG Project. This was undertaken in strict alignment with international frameworks for managing such ESHR risks and impacts. UKEF’s review was conducted alongside other export credit agencies and the African Development Bank, with the support of an independent ESHR consultant. This review considered all the relevant ESHR documentation provided by the Project sponsors such as ESHR impact assessments, strategies, management and monitoring plans amongst others and included studies undertaken since the publication of the Project’s impact assessment.
UKEF published, in August 2019, a Category A notice of its consideration of the Project which includes a link to an Environmental, Social and Health Impact Assessment (ESHIA) of the Mozambique LNG project and related information. In undertaking its review, UKEF considered the most up-to-date ESHIA. The Category A notice can be found here: https://www.gov.uk/government/publications/category-a-project-under-consideration-mozambique-lng-project
Asked by: Kate Osamor (Independent - Edmonton)
Question to the Department for International Trade:
To ask the Secretary of State for International Trade, whether her Department conducted an independent assessment of the effect of UK Export Finance's support for Total's LNG Project in Mozambique on poverty reduction.
Answered by Graham Stuart
As Mozambique is progressively emerging from debt distress, UK Export Finance (UKEF) support is subject to meeting the Organisation for Economic Co-operation and Development (OECD) Sustainable Lending Principles, which include a consideration of the economic and social development benefits of the Project to Mozambique. The Department for International Development provided confirmation that these benefits would be met by the Project.
The Project is directly supported by the African Development Bank. The World Bank and IMF are supportive of the Project. All three of these organisations are leading international financing institutions with developmental mandates and goals.