A group of environmental charities has claimed that the United States’ support of a major LNG project in Mozambique is “unlawful” and called for a stop to the “harm” caused by the development.
The NGOs have given oral argument in their appeal of a US District Court decision to allow the Export-Import Bank of the United States’ (US Exim) to release funds supporting TotalEnergies’ controversial US$20bn LNG project in Mozambique.
Friends of the Earth US and Justiça Ambiental (JA) presented their arguments to the federal US Court of Appeals for the DC Circuit on February 26, claiming that US Exim’s approval of a US$4.7bn loan to support the project was “unlawful”.
Total’s offshore LNG project, which includes development of the Golfinho and Atum natural gas fields, has been beset by civil unrest and sharply criticised by environmental campaigners.
It had been on hold since 2021 when insurgents known as Islamic State Mozambique attacked a nearby town. That year, the energy giant declared force majeure and withdrew staff from the Afungi site.
However, Total notified the Mozambican government that it was ready to restart construction on the project last October, a move NGOs criticised for putting local communities at risk.
The company has also raised further funds from equity partners after losing support from UK Export Finance and Dutch export credit agency Atradius DSB in December.
Friends of the Earth US and JA are now calling for a preliminary injunction to stop the “irreparable harm” they say will be caused by the gas project.
They argue that the project has “displaced thousands of local people, will cause significant environmental harm, and plans to operate in the midst of an ongoing violent conflict and humanitarian crisis”.
US Exim’s board voted to unfreeze its portion of the financing in March last year, providing a significant boost to Total’s plans to restart the LNG project.
Friends of the Earth US and JA responded in July by filing a civil suit against US Exim and its acting board of directors, urging a US District Court to halt disbursement of funds to the project.
The lawsuit alleges that US Exim’s board gave final approval to the loan without carrying out required environmental reviews or economic assessments, or allowing public and congressional input.
They claim US Exim “violated its own charter and federal law, setting a dangerous precedent for future decisions implicating taxpayer funds”.
Kate DeAngelis, economic policy deputy director for Friends of the Earth US, said: “If US Exim is allowed to move forward, its financing will likely exacerbate the violence in the region and local communities will continue to suffer.
“At a time when the Trump administration is cutting funds for health care and foreign aid, taxpayers shouldn’t be forced to subsidise foreign fossil fuel companies.”
Despite describing the NGOs as making a “strong showing” in arguing their case, the lower court concluded that they were unlikely to succeed with their claims.
Last November, Friends of the Earth US and JA filed an appeal following its denial of their request to pause disbursement during litigation of the financing’s legality.
Richard Herz, chief litigation attorney at EarthRights International, the organisation representing the NGOs, said: “The lower court erred in holding that Friends of the Earth US and JA did not have standing, despite finding that they [affected communities] will likely be harmed if the loan proceeds.
“The lower court also erred on the merits, concluding that US Exim could disburse nearly US$5bn in funding without giving affected communities the opportunity to weigh in on the harms from the project, or considering the economic harm it will cause in the United States.”
A spokesperson for JA added: “One of the poorest countries in the world, repeatedly devastated by environmental disasters, is being treated as a golden goose by multinationals like TotalEnergies.
“This injustice is made possible by the irresponsible and unethical financing of financial institutions like US Exim that continue to place corporate profits above human lives, environmental protection and climate justice.”
US Exim has been contacted for comment.
