Page 8 - GLNG Annual Review 2021

GLNG MARCH GLNG

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

ENERGY CARBON-NEUTRAL LNG is increasingly
TRANSITION gaining momentum as more industry players
commit to the concept, or put themselves on a
WHAT: path towards it. Carbon neutrality is currently
More and more achieved for LNG cargoes through the issuing
companies are getting of carbon credits to offset emissions generated.
behind carbon-neutral Thus far, credits for the nascent carbon-neutral
LNG. LNG industry have generally been bought from
projects that avoid or reduce emissions, such as
WHY: nature-based schemes. These credits are gener-
The concept is still ally used to offset emissions associated with the
in its early days, but entire lifecycle of a cargo, from production to
aligns with national end use by the LNG buyer.
and company-level New liquefaction plants have been proposed
decarbonisation targets. that would minimise their emissions from the
start, for example via carbon capture and storage
WHAT NEXT: (CCS). While these projects have yet to advance
There are concerns that to the final investment decision (FID) stage, Credits for the nascent
the costs of carbon- their emergence suggests that it could become Bank, Mitsubishi Estate, Yakult Honsha and carbon-neutral LNG
neutral LNG will be a increasingly easier to source carbon-neutral Lumine. It opens up a number of downstream industry have generally
deterrent to some. LNG via various avenues in the future. industries that consume gas to carbon-neutral been bought from
LNG. projects that avoid
Buyers’ club Nohata reportedly declined to comment on or reduce emissions,
In March, Tokyo Gas announced that it had the cost of carbon-neutral LNG, according to such as nature-based
joined 14 other Japanese companies in forming Reuters, citing confidentiality obligations. schemes.
the Carbon Neutral LNG Buyers Alliance in an This comes after Mitsui & Co. announced last
effort to promote the more widespread use of the month that it had agreed to supply carbon-neu-
greener version of the fuel. For Tokyo Gas, the tral LNG to Hokkaido Gas. And both devel-
move is another step forward on carbon-neutral opments are playing out against the backdrop
LNG, which it first imported in 2019, subse- of Japan’s nationwide net-zero emissions goal,
quently becoming the first company in Japan to for which it has set a deadline of 2050. Tokyo
supply it to customers as carbon-neutral city gas. Gas has voiced hopes that more LNG producers
It now wishes to expand its network of buyers. will offer a carbon-neutral version of their fuel,
“We are seeking an innovation in hydrogen, so that the company can work on widening its
methanation and carbon capture utilisation sources of supply.
technology, but it may take time,” Tokyo Gas’
executive vice-president, Kunio Nohata, said in Other moves
March. “Therefore we want to spread the use of The news about the Japanese consortium comes
carbon-neutral LNG, which is the most feasible around the same time that a number of other
measure right now to slash CO2 [carbon diox- moves have been made, either involving car-
ide] emissions,” he added. bon-neutral LNG or a shift towards the concept.
The alliance comprises Tokyo Gas, Asahi Group Also in March, Russia’s Gazprom reported that
Holdings, Isuzu Motors, Olympus, Sakai Chemi- it had delivered the first carbon-neutral LNG
cal Industry, Duskin, Tamagawa Academy & cargo to reach Europe, in collaboration with
University, Toshiba, Toho Titanium, New Otani, Royal Dutch Shell. (See: Shell, Gazprom deliver
Marunouchi Heat Supply, Sumitomo Mitsui Trust Europe’s first carbon-neutral LNG, page 14) The

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