Page 4 - GLNG Week 36 2021

GLNG COMMENTARY GLNG

Demand for carbon-neutral LNG

grows amid growing criticism

Demand for carbon-neutral LNG is rising, but critics are increasingly arguing

that using carbon offsets is not an effective way to combat climate change

ENERGY THE concept of carbon-neutral LNG – still in not as effective as not having those emissions in
TRANSITION its infancy – is rising in popularity. The first car- the first place.
bon-neutral cargoes were delivered in 2019, and “This paradigm … is encouraging a fictitious
WHAT: since then a small – but growing – number of engine that doesn’t help advance our net-zero
Critics are increasingly LNG players have announced the purchase or goals,” Danny Cullenward, a Stanford Univer-
questioning the use of sale of such a cargo. sity lecturer, who is also policy director at the
offsets to sell carbon- But while the emerging trade in carbon-neu- non-profit CarbonPlan, was quoted by Bloomb-
neutral LNG. tral cargoes is being welcomed and praised in a erg as saying.
world where decarbonisation is increasingly a Indeed, a similar criticism is being levelled at
WHY: priority, the concept is also progressively com- the concept of net-zero emissions more broadly,
Opponents of the practice ing under fire from critics. This is because those as ultimately achieving it will require offsetting
point out that it does carbon-neutral cargoes traded thus far have existing emissions rather than releasing none.
not actually prevent all relied on carbon credits from other, often Critics – including those within the LNG
emissions. nature-based projects. Thus direct emissions industry – are calling for more transparency
are still generated from the production of LNG. when it comes to offsetting emissions with car-
WHAT NEXT: Indeed, Bloomberg recently cited France’s bon credits.
Demand for carbon- TotalEnergies – one of the companies to have
neutral LNG is on the rise made a foray into carbon-neutral LNG – as On the rise
as buyers and sellers saying it does not count carbon credits in its Despite these concerns, though, carbon-neu-
alike seek to bolster their companywide emissions reports or as part of its tral LNG shipments are rising. According to
green credentials. plan to reach net-zero greenhouse gas (GHG) BloombergNEF, twice as many carbon-neu-
emissions by 2050. tral LNG shipments have changed hands so
“While an important tool … offsetting cannot far this year than in 2019 and 2020 combined.
be considered as a substitute for direct emissions North Asian buyers in particular are increas-
reductions by corporates, but as a complement,” ingly turning to carbon-neutral cargoes as
the company was quoted as saying. they seek to reduce emissions while meeting
growing demand for natural gas and power
Criticism generation.
Critics are increasingly highlighting these Japan is the largest buyer of carbon-neutral
aspects of carbon-neutral LNG and arguing LNG thus far. Indeed, one of the most recent
that balancing emissions that are added to the carbon-neutral cargoes to be announced was
atmosphere with an equal amount of removal is delivered by Malaysia’s Petronas to Japan’s

P4 www. NEWSBASE .com Week 36 10•September•2021