Greenhouse Gas Emissions from LNG Trade: from carbon neutral to GHG-verified

Carbon-neutral LNG has become progressively limited to a relatively small number of trades in Asia and cannot be considered a credible or relevant environmental standard. Cargos should be `greenhouse gas verified’ and should set out the methodologies used to measure, report, and verify emissions. These methodologies should distinguish between assumptions and models for estimating emissions, and empirical measurement of emissions. Owners and operators of assets in the different segments of the supply chain should take responsibility for MRV of emissions from those assets. For sellers this would include emissions from the wellhead to the loading arm of the LNG ship (ie all upstream segments plus liquefaction), and this may also include shipping depending on ownership of that segment. Buyers would normally take responsibility of emissions from regasification, distribution and end-use. Reporting should focus on the degree of accuracy which has been achieved in tracking gas molecules from production through different segments of the supply chain to liquefaction, shipping and end-use. This will be especially important where emissions have been estimated rather than empirically measured. Measurement and reporting should be subject to verification by technically qualified companies which should have the capability to replicate a sample of emissions from the different assets in the supply chain. If offsets are used to claim GHG neutrality, these should be reported in detail along with the MRV of emissions.

In 2022, the attention of the gas and LNG world has been diverted by the security crisis in Europe and by global price levels. However, when this crisis passes, attention will return to climate targets and emission reductions. At that time, the LNG community must be able to credibly document its emissions which will become an increasingly critical part of its social license to operate.

By: Jonathan Stern