US supermajor Chevron, Singapore’s Pavilion Energy, and QatarEnergy announced Wednesday the launch of a jointly published reporting methodology for greenhouse gas (GHG) emissions of liquefied natural gas cargoes.
The methodology produces a statement of greenhouse gas emissions (SGE) that can be applied to sales and purchase agreements of LNG cargoes, with the intent that it is adopted widely.
The companies say that academic experts, commercial institutions, and verification bodies, including the global sustainability consultancy Environmental Resources Management, have reviewed the methodology.
“We share a common and decisive vision with QatarEnergy and Chevron to advocate for transparency and accuracy of GHG emissions associated with delivered LNG cargoes,” said Alan Heng, interim group chief executive officer of Pavilion Energy.
“The SGE Methodology sets a strong tone for increased accountability of emissions along the LNG value chain, paving the way for more decarbonisation strategies towards a lower carbon future.”
Efforts to provide emissions statements with LNG cargoes have increased recently, including from US LNG exporter Cheniere, which plans to provide ‘cargo emissions tags’ to customers beginning in 2022.
Emissions from the LNG sector are complicated due to the difficulty in calculating Scope 3 emissions, as well as the lack of transparency in transactions that include carbon offsets. This has led to a movement toward establishing an industry-wide standard.
“We jointly developed this LNG carbon-footprinting methodology for delivered cargoes to help advance a standard for GHG product-level accounting,” said Bruce Niemeyer, Chevron's vice president of strategy and sustainability.
“This methodology is expected to enhance transparency, improve accuracy and build stakeholder confidence in data reliability to help advance net zero ambitions.”
Industry framework launched
The International Group of LNG Importers (GIIGNL) also released a framework Wednesday for a consistent industry approach to declare LNG cargoes as ‘carbon neutral,’ with independent verification. Cheniere and Pavilion Energy are both a part of the group.
The framework accounts for lifecycle emissions, from extraction to consumption. Chevron, Pavilion Energy and QatarEnergy said the framework complements the work they’re doing to create transparency in their cargoes.
"The Framework provides organisations across the industry with a best-practice approach specifically designed to enhance transparency and accuracy in quantifying, reporting, and offsetting emissions associated with LNG cargoes,” said Steve Hill, executive vice president of Shell Energy and GIIGNL regional vice president for Americas.
“We are keen to start the groundwork on applying this framework to deliver a test 'GHG neutral' LNG cargo as defined by the Framework."
The framework is available for all in the industry, but GIIGNL recognises it may take a while for the programme to be implemented.
"We encourage the industry to begin using the Framework from now on but we understand that alignment will take time as industry participants build necessary resources and capabilities,” GIIGNL president Jean Abiteboul said.
“We look forward to working with all stakeholders so that the global community has the best chance of reaching net-zero climate goals.”