Source · Select Committees · International Development Committee
Recommendation 64
64
In March 2021, the Government introduced its new fossil fuel policy, which mirrors that of...
Conclusion
In March 2021, the Government introduced its new fossil fuel policy, which mirrors that of its development finance institution, the CDC Group (CDC). Both ban new, direct financial or promotional support for the fossil fuel energy sector137 abroad except for special, albeit controversial circumstances.138 The Government’s exemptions include:139 • Support for stand-alone generators and Liquid Petroleum Gas for cooking and heating • Stand-alone diesel or gas generators if they are the “only means of providing power in areas where no mains grid connection is available or where grid power is unreliable, especially in humanitarian contexts” • Gas-fired power generation if: Ȥ the host country has a credible nationally determined contribution (NDC) and a long-term pathway to achieving net zero by 2050 in line with the Paris Agreement; Ȥ UK support does not “delay or diminish” transition to renewable energy; Ȥ the project “intends to follow best practice in environmental and social standards”; Ȥ If these cannot be demonstrated: If they are a source of “domestic energy security” and there are no viable alternatives in the form of renewable energy. 135 Q16 [Diann Black-Layne] 136 UN News, IPCC report: ‘Code red’ for human driven global heating, warns UN chief, 9 August 2021 137 The fossil fuel energy sector overseas is defined as “the extraction, production, transportation, refining and marketing of crude oil, natural gas or thermal coal, as well as any fossil-fuel fired power plants.”. See: Gov.uk, Aligning UK international support for the clean energy transition, p.4, 31 March 2021 138 CDC Group, Our fossil fuel policy, pp. 4–5, 12 December 2020; Gov.uk, Aligning UK international support for the clean energy transition, pp. 6–7, 31 March 2021 139 Gov.uk, Aligning UK international support for the clean energy transition, pp. 6–7, 31 March 2021 Global Britain in demand: UK climate action and international development around COP26 25
Government Response
Not Addressed
HM Government
Not Addressed
At COP26, the UK launched the Energy Transition Council, with over 20 governments and over 15 international institutions participating, to support countries’ transitions to clean power. The Council’s Rapid Response Facility is mobilising technical assistance for 20 countries. The UK’s COP Presidency energy transition campaign has focused on accelerating the global transition from coal to clean power by: • Growing the coalition of countries, sub-national governments and businesses committed to phasing out unabated coal power, building on the Powering Past Coal Alliance; • Ending international coal finance, with recent commitments from the G20, including South Korea, Japan, and China; • Strengthening the international offer of finance and assistance for clean power so that it is the most attractive option for new power generation; • Establishing a new financial framework to accelerate the just transition from coal in major coal economies like South Africa and India; • Driving ambition on product energy efficiency standards by doubling the efficiency of four key products sold globally by 2030. This will also help to meet Sustainable Development Goal 7 to ‘ensure access to affordable, reliable and modern energy for all by 2030’. The UK Government no longer supports the extraction, production, transportation and refining of crude oil, natural gas, or thermal coal overseas, with very limited exemptions to the policy that will be granted only in limited circumstances. The exemptions are applicable to a small number of situations and are necessary to make this policy work in the real world and allow an orderly transition away from fossil fuels. They reflect the current state of renewable technologies and markets, ensure that neither taxpayers nor developing countries are disadvantaged and, most importantly, are in line with achieving the Paris temperature goals and Nationally Determined Contributions (NDC). Projects are considered on a case-by-case basis, with the exemptions being monitored by an internal cross Whitehall governance group to ensure compliance and relevance with the UK’s fossil fuel policy.