UK Export Finance (UKEF) significantly reduced its direct financed emissions by 34% in 2025, bringing the total to 4.8 million tonnes of CO2 equivalent1. This reduction marks a notable step in the agency's commitment to decarbonising its portfolio and aligning with broader UK climate goals.
Understanding how UKEF's emission reductions impact the wider energy landscape is key to navigating the UK's transition to a greener future. Fuse Energy is committed to making energy simpler and more sustainable for homes across Great Britain. Click here to switch to Fuse Energy today.
Overall financed emissions performance
In 2025, UK Export Finance, the UK's export credit agency, reported a substantial 34% reduction in its portfolio's direct financed emissions. The total direct financed emissions for the year stood at 4.8 million tonnes of CO2 equivalent. This figure represents an 8% decrease below the 2021 baseline, indicating progress in the agency's decarbonisation efforts.
Measuring financed emissions: the UKEF approach
Financed emissions are the greenhouse gases attributed to a financial institution, such as UKEF, as a result of its investments, loans, guarantees, and insurance activities. These emissions estimate the pollution associated with transactions supported through financial aid.
Impact of airline support expiry and power sector repayments
The significant reduction in UKEF's financed emissions in 2025 is primarily due to two key factors: the expiry of corporate airline support and the gradual repayment of emissions-intensive power sector transactions. The power sector, in particular, saw a substantial improvement, with its emissions intensity falling by 32% during 2025, placing it 73% below the 2021 baseline. This progress is attributed to increased renewable energy financing and reduced exposure to higher-emitting power initiatives.
Challenges and progress in oil and gas financing
While overall emissions saw a considerable drop, the oil and gas sector presented a mixed picture. Financed emissions in this sector decreased by 9% in 2025, driven by a reduction in UKEF's financial exposure. However, they remained 49% above the 2021 baseline, largely due to a legacy project that entered its operational phase during the year. Despite this, UKEF has ceased supporting new overseas fossil fuel projects, with limited exemptions.
Current aviation emissions intensity
The aviation sector's emissions intensity decreased by 10% in 2025, following the expiry of airline support and a reduction in overall exposure. Despite this reduction, aviation emissions intensity remained 25% above the 2022 baseline. This higher baseline reflects the industry's recovery from the COVID-19 pandemic, which saw increased activity.
UKEF's long-term aviation reduction goals
Looking ahead, UKEF has set a long-term target to reduce aviation emissions intensity by 35% by 2035. Achieving this ambitious goal will depend heavily on real-world decarbonisation efforts within the aviation industry, including the wider adoption of sustainable aviation fuels and continuous efficiency improvements.
Cessation of new overseas fossil fuel projects
UKEF has aligned its operations with the UK government's policy of ending support for the fossil fuel energy sector overseas. This strategic decision underscores UKEF's commitment to facilitating a global transition to a low-carbon economy.
Ambitious targets for oil and gas by 2030
As part of its broader decarbonisation strategy, UKEF aims to achieve a 75% cut in its oil and gas financed emissions by 2030. The agency is also committed to bringing its overall financed emissions to net zero by 2050.
Navigating UKEF's green finance criteria
UKEF's increased renewable energy financing in the power sector demonstrates a shift towards supporting cleaner growth.
The UK's role in global sustainable export finance
UKEF's ambitious net-zero pledge and its proactive approach to reducing financed emissions underscore the UK's commitment to climate action on the international stage. By setting and pursuing these targets, UKEF aims to encourage other countries and export credit agencies to adopt similar ambitious climate goals. This role is integral to the UK's broader efforts to drive global sustainable export finance and achieve its economy-wide emission reduction targets.
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References
- Energy Live News. UK's export emissions fall by a third
