From pipeline to pipe dream: why there’s no such thing as shipping carbon-neutral LNG

There’s been a lot of talk about carbon-neutral LNG in recent weeks. It’s all fake news, argues Wijnand Stoefs, shipping policy officer at Carbon Market Watch.

So-called carbon-neutral liquefied natural gas (LNG) is the new kid on the block when it comes to fake climate credentials. The number of deals across the world is growing at an alarming pace. This greenwashing trend is wrong at many levels.

First, let’s be clear that we’re not talking about a new or different type of fossil fuel that does not emit greenhouse gases. It is the exact same product as regular LNG. But it is sold together with carbon offsets to supposedly compensate for the climate destruction caused by the production, transportation and consumption of LNG.

This practice is absurd and illogical. Take last year’s shipment from Total to CNOOC (respectively a French and Chinese oil company). Total and CNOOC bought carbon credits from a Chinese wind farm to compensate for their own continued trade in fossil fuels. This particular wind farm was built a decade ago, meaning that the credits did nothing to actually reduce emissions when the deal was signed nor will they do so in the future. In this story, a fossil fuel giant is trying to encourage others to switch to renewables while sticking to its own highly polluting business model.

Cheap renewable energy carbon offset credits are not the only product on the market. In fact, the above-mentioned deal also includes credits from forestry, which are at least as problematic. Planting or protecting trees to justify burning fossil fuels basically means that you shift carbon from very secure storage sites – fossil underground – to highly vulnerable and reversible ones – trees in a forest. It includes massive uncertainties when it comes to accounting. And it comes with risks for local communities who depend on forests for their livelihoods. Forests are also increasingly vulnerable to climate change impacts, and a forest planted to offset emissions can, for example, go up in smoke in wildfires.

There is currently no consensus on how to calculate the total lifecycle emissions of an LNG shipment. In many cases, companies don’t mention how many credits they have purchased to offset their emissions. One estimate puts the total emissions from all 2019 LNG shipments at around 1.5GtCO2e. We’re hence talking about 1.5bn carbon offsets needed to compensate for all that pollution. It is simply not realistic to have this volume of offsets available, nor is it desirable. Royal Dutch Shell alone is claiming 50m hectares of land for tree planting to compensate for continued fossil fuel production and consumption.This is the equivalent of the size of Spain.

When it comes to ‘voluntary’ climate action through offsetting by private companies, we should also ask the question: are these companies doing everything they can to reduce pollution and relying on offsets only for those emissions that they cannot avoid? Or are they doing what they consider as the bare minimum to satisfy their customers and perhaps to convince policymakers that there is no need for new regulation?

Carbon-neutral LNG is only a part of the gas industry’s relentless push to market its product as an important part of the transition towards a sustainable world. As otherworldly as these can be – like paying teenage influencers to extol the virtues of cooking with gas – they are also dangerous and can have long term consequences on policymaking.

The EU is currently considering the inclusion of gas as a “sustainable” activity eligible to receive green finance under its new finance taxonomy.

There are readily-available, economically viable technologies, such as wind and solar, to generate energy without the use of fossil fuels (including LNG) today. There’s a vast potential to save energy and focus on energy-efficiency in the first place. Fossil fuels have no role to play in a decarbonised world, and relying on offsets to artificially green their credentials is nothing but an attempt to mislead consumers. The atmosphere cannot be fooled. We all need to reduce emissions and we need to do it fast.


  1. Carbon offsets are totally illogical, and the whole concept of trading offsets is just smoke and mirrors. “Carbon neutral” when it is just as meaningless, as it fails to take into account the carbon footprint of actually building a ship in the first place.

    1. Yup first time I saw a tanker leaving Rotterdam for the North Sea to pump carbon dioxide 2 km under the seabed I figured out what the Al Gore crowd was up to: one big scam. Next INTERPOL is investigating carbon trading being used (via offshore accounts) to launder money…

    2. The impact of building the ship can be taken into account, but is a tiny component compared to the emissions generated from running the ship over 25 years or so. The emissions of shipping LNG to market are a fraction of the emissions generated by combustion of the LNG shipments. Focusing on the 0.1% that’s potentially not included is not a strong argument. The article raises valid points, so let’s not distract from those.

  2. Good article. The nonsense of “offsets” needs to be stopped – the juggernaut of vested interest behind it is already starting to roll.

  3. Interesting article.
    Always thought that “carbon offsets” were a gimmick and do not really do anything with regard to actually reducing our emissions.

  4. How do you make wind farms? How do you produce solar panels? That all is massively carbon intense. Complaining of ships being built to move LNG is a silly thing, when hardly any countries produce the compnants needed for green energy domestically or the thousands of products made in countries like china which are then SHIPPED around the world.

    Also, the author and OPs seem to forget the whole point of shipping LNG is to take off line coal fired power plants in countries that DO NOT HAVE natural gas. Countries require energy, there is no way around that. People need to understand the simple fact that Natural Gas is one of the cleanest burning options available today. Most industrialized nations already have the infrastructure in place to use their own stores, the point of LNG is to safely ship to countries that do not have any reserves of thier own.

    The carbon needed for hydro dams is staggering, wind turbines have a short life span and are NOT recyclable, let alone the carbon required to make the damn things. The mining required to get rare earth minerals is absolutely terrible for the environment, and if you care to take a gander at what is required to get cobalt, you will be horrified. We need to have frank discussions about what a green energy future looks like, people need to be aware of the impact and actual generation capacity of green tech.

  5. Yeah screw offsets. I’d rather those shipments of LNG be as cheap as possible to encourage mass consumption of fossil fuels without any consideration of the carbon intensity of those fuels both upstream in production nor in the shipping nor scope 3. Offsets are so stupid but if a company is marketing fuel as carbon neutral by bundling with offsets then I suppose it creates a price signal and market differentiation for the lowest carbon intense fuels and the cleanest producers. But you what, it’s way easier to just bash offsets and feel smart. Because let’s be honest, those LNG cargoes are going to be bought someone and without regard to embedded CO2, it often is going to the lowest bidder.

  6. Does this mean that Al Gore’s claim that he is carbon neutral because he purchased offsets is bogus? The whole concept is smoke and mirrors but is the basis for progress towards emissions goals in much of the world.

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