78 27 ( 3 ) ENV . LIABILITY : CHALLENGING POLICY ON CLIMATE CHANGE GROUNDS : CALVERT , GILBERT : CASE COMMENTARIES
emissions not included in Scope 2 , including the use of sold products .
UKEF did not conduct an assessment to quantify total Scope 3 GHG emissions for the Project although it did take advice . UKEF submitted in the litigation that its understanding ‘ was that there was no clear or comprehensive methodology that could be followed to assess Scope 3 emissions impacts ’. 4 The CCR concluded that :
The Project has a significant impact on [ Mozambique ’ s ] emissions but is still considered in alignment to Mozambique ’ s stated climate policies and by extension with their Paris Agreement commitments . …
The Project ’ s Scope 1 and Scope 2 emissions ( from the Project Facility ) will significantly increase Mozambique ’ s GHG emissions i . e . account for up to 10 % of Mozambique ’ s national GHG emissions but will on the other hand provide the country with increased financial resources with which to invest in renewable technology and improve climate resilience . …
The Project ’ s Scope 3 emissions are caused by the end use of the LNG . Scope 3 emissions will significantly exceed Scope 1 and Scope 2 emissions from the Project facilities … However … UKEF agrees with the view that gas is a transition fuel , which will remain part of the global energy mix over the life of the proposed tenor of UKEF support and beyond , and that LNG will therefore remain commercially viable . …
… UKEF ’ s view that although the Project ’ s Scope 3 ( along with its Scope 1 and 2 ) emissions will contribute to global GHG emissions the net effect may be a decrease in future GHG emissions provided that the Project LNG is used to replace and / or displace the use of more polluting fossil fuels . Gas from the Project is also considered by the Government of Mozambique to be an important contributor to the energy transition of Mozambique in line with its … Paris Agreement commitments . This aligns with the UK Government ’ s commitment to support developing countries to respond to the challenges and opportunities of climate change as part of its own Paris Agreement obligations . 5
Following its processes , UKEF submitted to the Secretary of State a recommendation to underwrite financial support to the Project . UKEF ’ s submission recommended that
4 ibid para 68 . 5 ibid para 77 . ministers ‘ may wish to pay particular attention to the [ CCR ]’. 6 In summarising the decision to provide support to the Project , the Chief Executive of UKEF said that he had taken into account key considerations including ,
the [ CCR ] setting out the significant impact that the project will have due to increased GHG emissions but also taking account of gas as part of the overall energy mix for the world ’ s power transition for the foreseeable future and beyond the lifetime of the potential UKEF supported facility . 7
While the Treasury noted that support for a fossil fuel project was contentious and several ministers expressed reservations , consent from the Treasury to UKEF ’ s recommendation was received and the Chief Executive of UKEF approved the underwriting minute on 30 June 2020 and the clearance of the necessary legal documents on 1 July 2020 .
FoE issued an application for permission to apply for judicial review of the Decision in September 2020 and permission to apply was granted by Mrs Justice Thornton in April 2021 . 8
The court ’ s decision
The claim was for judicial review which is a mechanism to correct unlawful conduct on the part of public authorities . The judgment is clear that the merits of UKEF ’ s Decision were not a matter for the court , the court was concerned only with the lawfulness of the Decision .
Key to the question of lawfulness is the duty of a public body to carry out sufficient enquiry prior to making its decision . In his judgment , Lord Justice Stuart-Smith adopted the question of Lord Diplock ,‘[ T ] he question for the court is , did the Secretary of State ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly ?’ 9
He noted that the main point underpinning FoE ’ s claim was that the CCR did not adequately address and quantify the GHG emissions that would be generated by the Project and was , therefore , inadequate to the extent that UKEF ’ s Decision was vitiated by a failure to have proper regard to the climate change impacts of the Project . 10
6 ibid para 79 . 7 ibid para 82 . 8 R ( on the application of Friends of the Earth Limited ) v The Secretary of State for International Trade / Export Credit Guarantee Department ( UK Export Finance ) / Her Majesty ’ s Treasury v Total E & P Mozambique Area 1 Limitada / Moz Lng1 Financing Company Limited [ 2021 ] EWHC 2369 ( Admin ). 9 Secretary of State for Education and Science v Metropolitan Borough of Tameside [ 1976 ] 3 All ER 665 at 696 , [ 1977 ] AC 1014 at 1065 . 10 Judgment para 161 .
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