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Carbon-neutral LNG

picks up momentum

Several recent developments illustrate the adoption of carbon-
neutral LNG picking up pace, though it is still in its early days

COMMENTARY CARBON-NEUTRAL LNG is increasingly forward on carbon-neutral LNG, which it first
gaining momentum as more industry players imported in 2019, subsequently becoming the
commit to the concept, or put themselves on a first company in Japan to supply it to custom-
WHAT: path towards it. ers as carbon-neutral city gas. It now wishes to
More and more Carbon neutrality is currently achieved for expand its network of buyers.
companies are getting LNG cargoes through the issuing of carbon cred- “We are seeking an innovation in hydrogen,
behind carbon-neutral its to offset emissions generated. Thus far, cred- methanation and carbon capture utilisation
LNG. its for the nascent carbon-neutral LNG industry technology, but it may take time,” Tokyo Gas’
have generally been bought from projects that executive vice-president, Kunio Nohata, said.
WHY: avoid or reduce emissions, such as nature-based “Therefore, we want to spread the use of car-
The concept is still schemes. These credits are generally used to off- bon-neutral LNG, which is the most feasible
in its early days, but set emissions associated with the entire lifecycle measure right now to slash CO2 [carbon diox-
aligns with national of a cargo, from production to end use by the ide] emissions,” he added.
and company-level LNG buyer. The alliance comprises Tokyo Gas, Asahi
decarbonisation targets. New liquefaction plants have been proposed Group Holdings, Isuzu Motors, Olympus, Sakai
that would minimise their emissions from the Chemical Industry, Duskin, Tamagawa Acad-
WHAT NEXT: start, for example via carbon capture and storage emy & University, Toshiba, Toho Titanium, New
There are concerns that (CCS). While these projects have yet to advance Otani, Marunouchi Heat Supply, Sumitomo
the costs of carbon- to the final investment decision (FID) stage, Mitsui Trust Bank, Mitsubishi Estate, Yakult
neutral LNG will be a their emergence suggests that it could become Honsha and Lumine. It opens up a number of
deterrent to some. increasingly easier to source carbon-neutral downstream industries that consume gas to car-
LNG via various avenues in the future. bon-neutral LNG.
Nohata reportedly declined to comment on
Buyers’ club the cost of carbon-neutral LNG, according to
Tokyo Gas announced last week that it had Reuters, citing confidentiality obligations.
joined 14 other Japanese companies in This comes after Mitsui & Co. announced last
forming the Carbon Neutral LNG Buyers month that it had agreed to supply carbon-neu-
Alliance in an effort to promote the more tral LNG to Hokkaido Gas. And both develop-
widespread use of the greener version of the ments are playing out against the backdrop of
fuel. For Tokyo Gas, the move is another step Japan’s nationwide net-zero emissions goal, for

P4 www. NEWSBASE .com Week 11 18•March•2021