A court ruled against the attempt by Friends of the Earth to stop the UK's export credit agency from backing the project in Cabo Delgado in the north of Mozambique.
Campaigners claimed the UK’s export credit agency decision in 2020 to back the project was unlawful as a result of the country's climate change commitment. In a ruling on Tuesday, Lord Justice Stuart-Smith said the decision "would have no material impact on the emissions generated by the project, which was and is going to be developed in any event" and rejected the action
A UK government representative said: “We welcome the judgment and remain confident that UK Export Finance follows robust and internationally recognised due diligence before providing any support for overseas projects.”
Lawyers for the environmentalists had claimed at a hearing in December that UK Export Finance was wrong to conclude that the decision was in line with the UK’s obligations under the 2015 Paris Agreement on climate change.
The plant being developed by Total E&P Mozambique is expected to produce 16 trillion cubic feet of gas over a 30-year period. All but 5 per cent of the liquefied natural gas is earmarked for export.
Friends of the Earth had claimed that the plant would produce emissions over its lifetime that amounted to more than the combined annual greenhouse gas emissions of all 27 European Union countries.
An investigation into the climate change effects of a huge gas project in Mozambique provided the UK with no “rational basis” to invest $1.15 billion, according to a second High Court judge hearing the case.
Mrs Justice Thornton concluded that UKEF had "failed to discharge its duty of inquiry" with its investigation.
There was "no rational basis" to demonstrate the funding for the project was consistent with the Paris Agreement and "a pathway to low greenhouse gas emissions", she said.
Will Rundle, head of legal at Friends of the Earth, said big questions remained for the UK about whether it could still support the project given one of the judge’s conclusions.
“This case has shown that making poor decisions at the expense of our planet’s future leaves the government increasingly vulnerable to climate litigation,” he said.