The Need to Move Beyond "Carbon-Neutral LNG"

In the wake of geopolitical tensions and a shifting global energy landscape, the LNG industry finds itself at a critical crossroads. While the industry has been grappling with a multitude of challenges, the resurgence of the term "carbon-neutral LNG" in the media highlights a crucial issue that needs immediate attention. It is high time that we, as industry participants, reconsider and rephrase our terminology to reflect a more accurate picture of our environmental impact. The term "carbon-neutral LNG" not only invites accusations of greenwashing but also adds to the confusion surrounding emissions scopes. In this article, I will explain why we must retire this misleading term and embrace a more transparent narrative for the future of LNG.

The Trouble with "Carbon-Neutral LNG"

Greenwashing Allegations: The term "carbon-neutral LNG" has, in recent years, been used to suggest that LNG is a clean and environmentally friendly energy source. However, such claims are misleading, and they expose the industry to valid accusations of greenwashing. Greenwashing occurs when companies make exaggerated or false claims about their environmental responsibility to appear more environmentally friendly than they actually are. In a time when environmental consciousness is on the rise, maintaining honesty and credibility is paramount for the LNG industry: LNG is a fossil fuel.

(Conveniently) Complex Emission Scopes: One of the most significant challenges in achieving a clear understanding of LNG's environmental impact is the complexity of emission scopes. LNG production and consumption involve various greenhouse gas emissions, including direct emissions from production, transportation, and indirect emissions from the entire lifecycle of the product. Labeling LNG as "carbon-neutral" only muddles the waters and fails to account for these intricate emissions sources, including the omnipresent issue of methane slips. Remember that downstream combustion accounts for more than 70% of the emissions. Certain accounting frameworks openly recognize that the elephant in the room is the downstream use of LNG, being forthright about it (GIIGNL).

Secondary Role in Decarbonization: While some companies are willing to invest in carbon offsets or other mitigation measures to reduce their environmental footprint when using LNG, it is essential to recognize that these efforts play a secondary role in addressing the broader issue of global emissions from the LNG industry. Relying solely on carbon offsets does not align with the industry's long-term commitment to decarbonization and sustainable practices.

Rephrasing the Terminology

Transparent Terminology: Instead of using the term "carbon-neutral LNG," we should opt for more transparent terminology that accurately reflects the environmental impact of LNG. This could include terms such as "emission-offset LNG", "low-carbon LNG" or "mitigated carbon LNG" tied to specific segments of the value chain. These labels would convey that efforts are being made to reduce emissions associated with LNG but do not suggest it is entirely carbon-neutral.

Clarifying Emissions Scopes: To address the confusion surrounding emissions scopes, the industry should provide clear and concise information about the greenhouse gases emitted at each stage of the LNG lifecycle. This transparency will enable customers, investors, and policymakers to make informed decisions about the environmental impact of LNG.

Prioritizing Decarbonization: Rather than relying solely on carbon offsets, the LNG industry should prioritize decarbonization efforts. This includes investing in cleaner production technologies, improving energy efficiency, and exploring renewable energy sources for LNG facilities. These actions will contribute more significantly to global decarbonization efforts than dubious PR efforts. Carbon-abated LNG cargoes won't help much.

Conclusion

The LNG industry faces numerous challenges on its path to a sustainable future. While the term "carbon-neutral LNG" may have been used with good intentions, it is time to recognize its shortcomings (See Ben Cahill 's excellent Credibility Gap for Carbon-Neutral LNG). To maintain credibility and foster trust among stakeholders, we must adopt more accurate and transparent terminology that reflects our commitment to mitigating emissions and reducing our environmental impact. Additionally, a focus on decarbonization, rather than relying solely on carbon offsets, will pave the way for a greener and more sustainable LNG industry. It is only through these changes that we can hope to win the media war, secure funding for new projects, and drive the industry toward a more sustainable future.