The biggest challenge in decarbonizing the liquified natural gas (LNG) industry is accurately measuring carbon emissions, one expert told Al Arabiya.
Countries around the world have increasingly turned to LNG as an energy source as world leaders seek to reduce global carbon emissions and fight climate change. Experts have previously argued that LNG could serve as a bridge fuel amid a global energy transition away from fossil fuels. However, as the popularity of LNG has grown, more focus has been placed on the carbon emissions generated by the fuel’s value chain.
While LNG itself is a fossil fuel, arguments have been raised about prospective carbon-neutral LNG, or “green LNG”, whereby emissions are offset by carbon credits and emission abatement projects. The argument is not without its challenges, however, with critics arguing more work is needed for the fuel to reach its most climate friendly point.
“What gets measured gets done, so the priority is to collaborate along the value chain to measure, report and certify the greenhouse gas emissions transparently, [this is] a work-in progress … with global supplies and global consumption,” Mehdi Chennoufi, head of LNG origination & market development, at Shell LNG Marketing and Trading told Al Arabiya’s Naser El Tibi.
With more measurement of the LNG industry, companies and regulators will be better suited to target actions aimed at reducing emissions caused by LNG, Chennoufi argued.
“I think, when it comes to scaling up the offset market, we are seeing a lot more interest. Carbon-neutral LNG demand growth did have its intended impact on the supply side of nature-based credits,” he added.
While LNG does emit far fewer carbon emissions than other fossil fuels, with the International Group of Liquefied Natural Gas Importers estimating that a new LNG power plant emits 50 to 60 percent less emissions than a new coal plant, increasing efficiency along the value chain can cut these numbers even further.
Primarily, the highest carbon emissions during LNG production occur at the combustion site, accounting for more than 70 percent of all emissions, Chennoufi said, with exploration and production “rarely” exceeding 20 to 25 percent, and remaining value-chain emissions occurring in the shipping process.
“If you follow the “avoid, reduce and then offset” principles, the biggest opportunity to reduce emissions is in the efficiency of the power plants, of course the liquefaction technology used, or the renewable energy that can be used to power the liquefaction as we did in Canada LNG for example,” he said.
There is currently no government or industry mandated definition of carbon-neutral LNG, but Chennoufi believes in the future, the emissions generated by individual cargoes will be supplied alongside individual shipments.
“This will become in my view table stake by the end of the decade. As we have seen the carbon natural cargos have been incredibly effective at putting the price or cost on carbon emissions, and to some extent ecosystem impact in our market, and getting the industry to ask who pays for what. So, measurement will be done for sure by the end of the decade,” he said.
Implemented new technology and processes aimed at reducing carbon emissions of LNG production does not come cheap, however, with carbon-neutral LNG sold at a premium over conventional LNG. The industry will continue to seek to pivot towards more climate-friendly production methods, with Chennoufi arguing that market forces, fair competition, and occasional government incentives likely to provide the force behind industry innovation.