BAKU, Azerbaijan, Dec.1
By Leman Zeynalova – Trend:
The simultaneous push towards renewables in many markets could see certain countries abandon the use of liquefied natural gas (LNG) altogether, instead choosing to pursue a full-on transition to renewables in order to reach their net-zero targets, Trend reports with reference to Fitch Solutions.
“However, we expect most countries will continue to see LNG as a transition fuel that can support a long-term switch to renewables, rather than attempt to phase-out gas from their energy mix altogether. Indeed, our long-term forecasts to 2030 reflect a sustained global demand for gas, supported by an expectation for increased investment in both LNG export and import infrastructure over the decade. As countries tighten their emission targets and announce their paths towards decarbonization and net-zero, we expect suppliers to respond by increasing their offerings of carbon-neutral LNG cargoes, providing buyers with more choice for cleaner LNG cargoes,” reads the report released by Fitch Solutions.
The company notes that most carbon-neutral LNG deliveries seen to date have been directed across Asia and Europe, as environmentally conscious buyers pursue decarbonization strategies and net-zero targets.
“A growing number of key net LNG importers are announcing net-zero targets, including Japan, the European Union and China. We expect these markets to be increasingly conscious of buying emission-heavy LNG cargoes, which could secure a long-term demand for carbon-neutral or low-carbon LNG. This is the case in Japan, where in March 2021 Tokyo Gas and 14 other Japanese companies established the Carbon Neutral LNG Buyers Alliance to enhance the use of carbon-neutral LNG in the country. The alliance view carbon-neutral LNG as having a direct role in helping tackle climate change and reaching Japan’s target to be net-zero by 2050,” the report says.
Should other countries adopt similar strategies to Japan and expand their own buyers’ network, this will lead to greater recognition across both the global LNG industry and amongst key policymakers, of carbon-neutral LNG and the role it can play in helping a country’s path towards decarbonization, Fitch Solutions believes.
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