The trade of Green or Carbon Neutral LNG
There is no clear template for what a carbon neutral or “green” LNG cargo is in terms of which emissions are offset.
As of early July only 16 “Green” LNG cargoes had been traded since the first such cargo was delivered two years ago*. The cost of offsets is unlikely to have added more than 40-50 cents per mmbtu to the total cost of any “Green” cargo (depending on cost of offsets)
To date, relatively few players have been involved in the trade of “green” LNG cargoes The total amount of carbon offset in the 16 “green” cargoes totals around 3.4 Mt and is estimated to have cost around $17m*
Number of cargoes delivered
Loading Port
Discharge Port
WoodMac estimated emissions offset (kt CO2e, cumulative)
Estimated emissions offset using DEFRA
Estimated offset value (US$)*
Number of delivered cargoes:
Wood Mackenzie estimated emissions offset (kt CO2e, cumulative)
Wood Mackenzie estimated emissions offset using DEFRA
Wood Mackenzie estimated offset value (US$)*
Companies involved:
Supermajors
Traders
Utilities & NOCs
IOCs
Infrastructure & Industrials
The DEFRA emissions factors for LNG underestimate emissions for some LNG cargoes and overestimate for others. The DEFRA emissions factors were never intended to be used for the calculation of emissions related to specific LNG cargoes.
3.4 million tonnes CO2e
is equivalent to over
3 million trees
1050 football pitches or 1850 acres
That in turn would cover
"Green" Cargo Emissions Intensity vs DEFRA Emissions Factors
Summary of "Green" LNG cargoes
*based on public disclosures, but we understand that other undisclosed green cargoes have been traded
# - asumes offset cost of $5/t CO2e Source: Wood Mackenzie Research, Wood Mackenzie LNG Emissions Tool
Source: Wood Mackenzie Research, Wood Mackenzie LNG Emissions Tool
To Asia
To Europe
13
3
Source: Wood Mackenzie Research, Wood Mackenzie LNG Emissions Tool *Note: Assumes offset cost of US$5/t CO2e
3406
3331
$17 million
The LNG Carbon Emissions Tool provides a transparent, independent and comprehensive assessment of carbon emissions along the LNG value chain.
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