UK Government considering deal with Saudi Aramco, violating ethical and climate change principles

In the wake of the alleged murder of Jamal Khashoggi and international warnings on climate change, the UK Government is discreetly considering supporting a Saudi Arabian oil company with a petrochemical project.

UK Export Finance (UKEF), the controversial export credit agency which underwrites risky export deals to boost the UK’s international trade, recently announced that it could use public funds to help develop a large petrochemical refinery in Malaysia. The project, PRefChem, is a joint venture between Petronas, the Malaysian state oil company, and Saudi Aramco, the Saudi Arabian oil giant.

Adam McGibbon, Climate Change Campaigner at Global Witness, said: “Given the alleged murder of Jamal Khashoggi, which led to UK International Trade Secretary Liam Fox pulling out of a high profile event in Riyadh, this deal looks ethically dubious and inconsistent on the part of the UK Government. 

As if that wasn’t enough reason for UK Export Finance to steer clear, the ink is just drying on the International Energy Agency’s 2018 report, which tells us that we cannot build more fossil fuel infrastructure if we’re to keep climate change to a safe limit. That UK taxpayers’ money could be spent supporting oil giants with a huge refinery project shows that the UK Government has no credibility on climate change, and has forgotten its Paris Agreement commitments.”

UK Export Finance has a history of lending disproportionately to fossil fuels, flying in the face of Government rhetoric on the UK becoming a climate change leader. Research conducted by the Overseas Development Institute, CAFOD and others show that in the last measurable period, 99.4% of all energy support provided by UKEF went to fossil fuels. An analysis by Carbon Brief shows that the £4.8 billion total UKEF support for fossil fuel projects from 2010-16 is equal to the UK’s total spend on its International Climate Fund for a similar period, 2011-17, which came to £4.9 billion.  

McGibbon continued, “With one hand, the UK claims to be a climate leader, and spends billions on fighting climate change abroad. With the other hand, it provides billions to fuel climate change by funding fossil fuel projects worldwide. This hypocrisy has to stop, and Theresa May needs to phase out UKEF’s fossil fuel support to zero if we are to have a hope of staving off the worst effects of climate change.”