Page 7 - AsiaElec Week 16 2021

AsiaElec COMMENTARY AsiaElec

carbon-neutral LNG as being among the possi-
ble solutions. portfolio of carbon offset projects. It added that
As for the carbon-neutral LNG cargo the credits used for the offset are from Natu-
received by Toho Gas, the shipment is reported ral Climate Solutions projects certified under
to have been supplied by Diamond Gas Inter- the Verified Carbon Standard (VCS) and Cli-
national, a subsidiary of Mitsubishi, which also mate, Community and Biodiversity Standard
bought the credits to offset the cargo’s emissions. (CCB) – Evio Kuinaji Ese’Eja Cuana in Peru and
Few other details related to this cargo have Liangdu Afforestation in China. Both projects
emerged, but it illustrates the gradual growth of are designed for the protection and restoration
the carbon-neutral LNG trade in Japan. of forests, according to Pavilion.
Pavilion’s plan What next?
The delivery of a carbon-neutral LNG cargo to LNG players typically do not discuss commer-
Pavilion also comes as no surprise, given that the cial arrangements, including the prices paid for
Singaporean company launched a tender a year their LNG supplies, and the recent deliveries and
ago for LNG deliveries with their carbon emis- other developments are no different. Nonethe-
sions quantified. The eventual goal of this was less, carbon-neutral cargoes will be more costly
carbon neutrality. than standard LNG deliveries, and there is scep-
Pavilion subsequently reached two separate ticism over how many players will be willing
supply deals – one with Qatar Petroleum (QP) to buy such cargoes when economics remain
and one with Chevron – that involve each cargo important.
being accompanied by a statement of its associ- On the other hand, those moving forward
ated GHG emissions from wellhead to discharge with initiatives to decarbonise LNG include
port. The company is also working with others to some major players, and their participation
develop a methodology to quantity and calculate will almost certainly help carbon-neutral LNG
emissions from LNG. to become more widespread. As deadlines for
Details of who supplied this first carbon-neu- national decarbonisation targets loom, the pres-
tral cargo to Pavilion were not disclosed. How- sure to embrace carbo-neutral LNG will likely
ever, the company said the emissions from the rise.
cargo would be offset by retiring a correspond- That said, carbon-neutral LNG is still in its
ing amount of carbon credits sourced from its early days, and much is unknown.™

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