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Shell sells carbon-

neutral LNG to CNOOC

Royal Dutch Shell has agreed to supply two more cargoes of
carbon-neutral LNG, as it continues to grow this nascent industry

COMMENTARY ROYAL Dutch Shell announced this week that Chinese gas customers looking to decarbonise
it had agreed to deliver two cargoes of “car- their energy use.”
bon-neutral” LNG to a subsidiary of China Shell said in its statement that nature-based
WHAT: National Offshore Oil Corp. (CNOOC). The projects protect, transform or restore land, help-
Shell is supplying delivery, to CNOOC Gas & Power, will mark the ing to boost oxygen while carbon dioxide (CO2)
carbon-neutral LNG to a first carbon-neutral LNG to reach the Chinese emissions from the atmosphere are absorbed. In
subsidiary of CNOOC. mainland. Shell has supplied three carbon-neu- addition to protecting biodiversity and restoring
tral cargoes to date, starting in June 2019 – to ecosystems, the super-major hopes the credits
WHY: Tokyo Gas, South Korea’s GS Energy and Tai- from projects in Qinghai and Xinjiang may also
A small number of wan’s CPC. increase the added value of forestry in China
buyers are increasingly and provide a new source of income to local
interested in ways to Carbon neutrality communities.
offset their carbon Shell said in a statement that for LNG to be car- Shell has said previously that its global
footprint. bon neutral, all emissions from exploring for and portfolio of nature-based projects includes the
producing the natural gas used as feedstock, as Katingan Peatland Restoration and Conserva-
WHAT NEXT: well as the use of the fuel by the final consum- tion project in Indonesia, the Cordillera Azul
Questions of affordability ers, are offset by credits from a variety of nature- National Park project in Peru and the Form
need to be addressed based projects. Under the latest agreement with Reforestation project in Ghana. The super-ma-
as carbon-neutral CNOOC, the nature-based projects include jor notes that there is no single solution as far as
LNG becomes more afforestation schemes in China’s Qinghai and decarbonisation goes, which is why it is investing
widespread. Xinjiang provinces that the company supports. in nature-based projects as it strives to become
“We are very excited and humbled to be a “net-zero” emissions company by 2050 or
working alongside our trusted partner CNOOC sooner. Nature-based projects are one compo-
in bringing the first carbon-neutral LNG car- nent, with Shell also pursuing targets such as
goes to [the] Chinese mainland,” Shell Energy’s an improvement in the energy efficiency of its
executive vice-president, Steve Hill, stated. “We operations, selling more natural gas, generating
are particularly pleased to be able to also use electricity from renewables and providing low-
credits from projects in China for China. Using er-carbon fuels such as biofuels and hydrogen.
nature-based credits in conjunction with LNG In another innovation, the cargoes being
is a unique solution to support the needs of delivered to CNOOC will be auctioned through

Week 26 02•July•2020 www. NEWSBASE .com P7