Greenpeace Raises Concerns Over LNG Deals

Leading oil and gas conglomerates, both in China and globally, are employing substandard carbon offsets to obscure the environmental impact of their natural gas imports, all while falling short on making substantial emissions reduction commitments. This revelation comes from an announcement made by the environmental organization Greenpeace on Monday.

Noteworthy entities such as PetroChina and CNOOC Gas and Power have engaged in long-term contracts with Shell for the procurement of "carbon-neutral" liquefied natural gas (LNG). The approach involves utilizing "forest offsets" to counterbalance carbon emissions. Greenpeace, a vocal critic of fossil fuel producers integrating carbon offsets into their emissions reduction strategies, argues that the "carbon-neutral" designation is misleading the public.

Li Jiatong, the project leader with Greenpeace in Beijing, asserts that carbon offsets serve as a smokescreen for oil and gas companies, thereby concealing their ongoing and intensified carbon emissions. Greenpeace has raised alarm over the inconsistent measurement of many offsets, with instances of double counting. Additionally, certain forests associated with offset programs are susceptible to fires, potentially transforming them from carbon sinks into carbon sources.

Greenpeace underscores that credits from 15 forestry carbon sink projects in China, involving Shell, PetroChina, CNOOC, and others, have already been secured. However, 80% of these projects involve trees at medium to high risk of burning down. The escalating demand for "carbon-neutral" liquefied natural gas, primarily driven by the surging gas demand in Asia, has led to approximately 85% of such cargoes being sold to buyers in the Asian region.

Projections indicate that China's gas consumption will reach 250 billion cubic meters by 2026, a significant uptick from 216 bcm in the previous year. This accounts for nearly half of the new global demand over the same period, according to the International Energy Agency. The notion of "carbon-neutral" gas is anticipated to be a focal point during the upcoming COP28 talks, as highlighted by Polly Hemming, the director of the Climate and Energy Program at the Australia Institute.

Despite being a notable contributor to greenhouse gas emissions, gas is often deemed cleaner than coal and is positioned as a "bridge fuel" in the ongoing global energy transition. However, groups opposed to fossil fuels are critical of new gas projects. The balance between the environmental impact of gas consumption and its role as a transitional energy source is a contentious issue, especially amid growing concerns about carbon offsets and their efficacy in mitigating the climate change.