Clearing the view: navigating the future of LNG carbon intensity

Abstract

This paper investigates discrepancies in methane emissions reporting within the liquefied natural gas (LNG) sector, focussing on the underreporting of methane emissions due to reliance on generalised emission factors. National reporting standards from both Australia and the US use broad emission factors primarily derived from the American Petroleum Institute Compendium, which fail to reflect the specific operational and environmental conditions of their respective LNG industries. This leads to significant underestimations of methane emissions, with early satellite data revealing discrepancies of two to three times between reported and actual emissions. The paper examines the regulatory challenges in both nations, highlighting fragmented approaches to methane emissions reporting and a lack of alignment with global standards, particularly as the European Union enforces stricter regulations on methane emissions. To address these issues, the paper advocates for the development of location-specific emission factors and the incorporation of satellite and aerial data into monitoring, reporting and verification practices. By adopting internationally recognised standards, both the US and Australia can improve the accuracy and transparency of their emissions data. For Australia, implementing these practices could enhance the global competitiveness of its LNG sector, positioning Australian LNG as a cleaner energy source in climate-sensitive markets. This paper stresses the importance of a unified, global approach to emissions reporting, one that ensures consistency, improves regulatory alignment and supports the decarbonisation of the global energy sector.