"We believe rail to be the most efficient mode of transport currently available for short journeys on congested routes, longer domestic journeys, short-haul international travel and freight," the fund told UK transport secretary Grant Schapps in a letter dated Aug. 27 and seen by Reuters on Tuesday.

Oceanwood, which has $1.3 billion in assets under management, holds a position in Channel tunnel operator Getlink, according to the letter.

Oceanwood also has positions in other renewable energy companies, including in Danish offshore wind company Orsted, according to the letter.

"We believe that the use of air travel for anything other than mid to long-haul, and ferries for freight, are not just inefficient, but generally the most carbon intensive options... and should be heavily discouraged," it said.

Oceanwood's deputy chief investment officer Julian Garcia Woods noted that while CO2 emissions have fallen during the coronavirus pandemic, governments should encourage a shift in transport habits as economies begin to return to normal.

"We believe now is the perfect opportunity for the Government to instigate this structural shift in the habits of transport and be more ambitious with its transport policy," he said in the letter.

(Story corrects para 4 to say that Orsted is a Danish company)

By Maiya Keidan