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Platts launches carbon-neutral LNG assessment

SINGAPORE, June 16, 2021

Commodity price agency S&P Global Platts said it has launched a daily carbon-neutral liquefied natural gas (LNG) price assessment, to track the cost of carbon credits bought and retired to offset carbon emissions from LNG trade, Reuters reported
 
The assessment involves offsetting the carbon emissions associated with the upstream upstream production, liquefaction, transportation and, where required, combustion of the gas through the purchase and retirement of carbon credits, Platts said in the statement.
 
"We are already seeing LNG consumers around the world demand action on emissions associated with LNG use amid an increasingly carbon-conscious economy," said Platts' global director of LNG pricing Ciaran Roe. 
 
Leading industry traders and consumers have been seeking more transparency on carbon and methane emissions in the gas value chain amid a global decarbonisation push.
 
While LNG is generally considered a cleaner fuel than coal or oil, there is currently no accepted standard for measuring the emissions from producing and transporting the fuel, which needs to be cooled to minus 162 degrees Celsius (minus 260 degrees Fahrenheit). 
 
Platts publishes the Japan-Korea-Marker (JKM), which is increasingly being used as a benchmark in the spot LNG market in Asia. 
 
The agency said it launched the daily carbon-neutral LNG price assessment in response to recent growth in trade of carbon-neutral LNG cargoes this year. 
 
The new assessment for well-to-tank emissions will reflect LNG cargoes loaded in Australia, the world's second-largest LNG exporter, and delivered to Japan, South Korea, Taiwan and China. This route is considered one of the most active trade channels globally, Platts said.
 
Platts said it will use a weighted average of the estimated emissions of carbon dioxide equivalent, or CO2e, per metric tonne of LNG produced from all Australian liquefaction plants and an average emissions rate for a standard LNG vessel sailing from Australia to the Japan, South Korea, Taiwan and China region. --Reuters



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