The UK High Court has granted Greenpeace permission to proceed with a Judicial Review of the Government’s decision to launch a new licensing oil and gas round, with fossil fuel companies submitting more than 100 licences to explore for new oil and gas.
- UK High Court to allow a Judicial Review of the government grant of new fossil fuel licences.
- Ground for the review are that the government failed to consider the impact of burning fuels (and therefore emissions) from the extracted fuels.
- Despite the IEA and IPCC stating there is no room for new fossil fuels in a net zero scenario, the UK is issuing new licences and remains the second largest fossil fuel exporter in Europe.
The judge has granted permission to Greenpeace for a full Judicial Review of the Government’s decision not to take into account the environmental effects of consuming the oil and gas to be extracted in the new licensing round.
Greenpeace’s legal argument is that this is a glaring omission from the Government’s decision making, including its climate compatibility check. Since at no time does the test involve looking at the emissions created from burning fossil fuels, despite the fact that this will amount to more than 80% of the total emissions generated from the new licences.
There are strong arguments to suggest that the provision of lower cost energy could be more easily, and cheaply, achieved through the deployment of energy efficiency combined with investment in the grid, as well increasing the deployment of renewables. Such an approach would also provide an enabling environment for continued growth in the UK’s green sector.
Given that both the US and the EU have set out strong policy frameworks and investment commitments to grow their own domestic green industries, a failure to do so feels like a missed opportunity for the UK economy. Today the UK remains the second-largest oil and gas producer in Europe.
The UK continues to push for new fossil fuels despite the danger
While the government insists that the expansion is necessary to protect UK energy independence and security, there are growing concerns that continued support for fossil fuel expansion may prove costly in the longer term. Over 700 academics recently sent an open letter to Rishi Sunak warning that the UK’s commitment to new fossil fuels risked undermining the country’s position as a climate leader.
As the Intergovernmental Panel on Climate Change affirmed in its March 2023 report, to give humanity a chance at avoiding unacceptable harm to millions of people alive today and countless generations to come, fossil fuel expansion must stop, and use of fossil fuels across all sectors must decline sharply*,
Currently approved projects are already enough to take us beyond that point. The IEA originally warned in its Net Zero by 2050 report in 2021 that there was no room for further fossil fuel investment if net zero targets are to be achieved.
Philip Evans, Greenpeace UK’s climate campaigner, said: “This verdict is the first real setback for the Government’s reckless oil and gas licensing round. Ministers will now be forced to justify in front of a judge why they want to unleash a new drilling frenzy in the North Sea against the advice of leading scientists and the UN chief, without assessing the climate impact. ”
Just one stop in a greater campaign
The news came as the next stage in a longer campaign to halt fossil fuel expansion in the UK. Pushed through under the short tenure of Prime Minister Liz Truss, the Licensing Round saw the North Sea Transition Authority (NSTA) offer more than 900 blocks of offshore acreage. The UK currently faces legal challenges from Greenpeace, Friends of the Earth and climate NGO Uplift over its failure to consider full climate impacts of more fossil fuel extraction.
Friends of the Earth (FoE) contends that the government’s climate compatibility checkpoint – a three-point vetting process for new licensing – is “not fit for purpose” and “ignores climate science”. It argues thatthe lack of consideration of the total carbon impacts of the licensing and burning of extracted oil and gas, and a lack of analysis as to the potential global production gap, mean the policy may be incompatible with the UK’s climate objectives.
Although UK production is still projected to decline at 7% per year, global production needs to shrink by only 3-4% to meet commitments to limit global warming to 1.5°C. According to the Production Gap‘s assessment of recent national energy plans and projections, governments are in aggregate planning to produce around 110% more fossil fuels in 2030 than would be consistent with limiting global warming to 1.5°C, and 45% more than would be consistent with limiting warming to 2°C, on a global level. By 2040, this excess grows to 190% and 89%, respectively.
Financing new fossil fuels is challenging but continues
According to the annual Banking on Climate Chaos report from the Rainforest Action Network, the FTSE 100’s five banking giants lent $35.7 billion to fossil fuel companies in 2022, down from $51.6 billion in 2021.
Globally the direction of travel remains a concern. Global banks’ net zero pledges have netted nothing so far, according to the report. Forty-nine of the 60 banks profiled in the report made net zero commitments, but most are not paired with rigorous policies excluding finance for fossil fuel expansion.
The policies contain many loopholes that allow banks to continue financing fossil fuel clients. Banks with restrictions on Arctic project financing, for example, nevertheless financed ConocoPhillips, which is developing the Willow project in the Arctic, the largest proposed oil project in the US.
As the Intergovernmental Panel on Climate Change affirmed in its March 2023 report, to give humanity a chance at avoiding unacceptable harm to millions of people alive today and countless generations to come, fossil fuel expansion must stop, and use of fossil fuels across all sectors must decline sharply*.
The report shows that overall, US banks dominate fossil fuel financing, accounting for 28% of all fossil fuel financing in 2022. JPMorgan Chase remains the world’s worst funder of climate chaos since the Paris Agreement. Citi (NYSE:C), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC) are still among the top 5 fossil financiers since 2016.
In the seven years since the Paris Agreement was adopted, the world’s 60 largest private banks financed fossil fuels with $5.5 trillion. The report lays bare the shocking fact that even as fossil fuel companies made $4 trillion in profits in 2022, banks still provided $673 billion in financing.
Fossil fuel companies doubled down on expansion and weakened their climate commitments. The top 30 companies expanding LNG used the crisis to secure nearly 50% more financing in 2022 compared to 2021 from the banks in the report — even as most energy experts agree that the LNG expansion plans in Europe are unnecessary, and new projects would contribute to a supply glut and long-term dependence on this fossil fuel.
