How Canadian LNG Impacts the Climate: Carbon emissions, fuel switching, and cleaner alternatives

Summary

• LNG is a fossil fuel; producing it will increase Canada’s domestic emissions.  
• Canadian LNG exports are likely to increase global emissions by adding to fossil fuel consumption and slowing the transition toward renewable energy.
• New Canadian LNG is incompatible with climate targets and diverts resources away from real climate solutions such as renewable power generation and a clean transportation system.

The leading cause of climate change is burning fossil fuels—and this is causing more frequent and intense wildfires, storms, droughts, and floods. With Canada’s first large-scale LNG terminal beginning operations in June 2025, and several others proposed or under construction, it is crucial to understand the impact that this fossil fuel could have on people and the planet. That means answering questions such as:

• Will new LNG production increase Canada’s emissions?

• How would Canadian LNG exports affect global emissions?

• Is Canadian LNG a climate solution?

Recently, senior government officials have suggested that expanding Canadian LNG production would be good for the climate. For example, some have argued Canadian LNG has the “lowest carbon footprint of any produced in the world” and that LNG Canada Phase 1 is “60 per cent lower carbon than the average LNG plant in the world.” The federal government has suggested LNG exports “could help reduce greenhouse gas emissions by reducing coal combustion,” and a minister for the Government of British Columbia (B.C.) has added, “It's not just a question of displacing coal or other dirtier fuels … it's displacing other LNG, which has dramatically higher emissions.”

Statistics and arguments like these, however, don’t tell the full story.

Here’s why.

Q: Will new LNG production increase Canada’s emissions?

A: Yes, LNG is a fossil fuel; producing it will increase Canada’s domestic emissions.

How much carbon is expected to be emitted from Canada’s current LNG facility?

Producing LNG requires a lot of energy as it involves cooling standard piped natural gas to -162°C. LNG Canada Phase 1—Canada’s only active LNG export terminal—uses natural gas turbines to do this. That means Canada’s current LNG production relies on burning fossil fuels, with LNG Canada Phase 1 expected to emit 2.1 megatonnes of CO2e annually. This is roughly equivalent to the annual emissions of around 450,000 passenger vehicles and would make LNG Canada Phase 1 one of the most climate-polluting projects in all of B.C. These emissions could double if LNG Canada Phase 2 goes ahead as initially planned with partial electrification.

What about Canada’s proposed net-zero LNG facilities?

Most other proposed LNG projects in Canada—such as Woodfibre LNG, Cedar LNG, and Ksi Lisims—intend to be powered by hydroelectricity rather than natural gas. This could reduce their overall carbon footprint, with a goal to achieving net-zero operational emissions; however, electrifying B.C’s oil and gas industry—including all proposed LNG projects—in line with provincial climate targets would require over 40,000 GWh per year of electricity by 2030. This huge surge in demand would require the equivalent of eight Site C hydroelectric dams, just for the oil and gas sector. Electrification would also be very expensive, with a significant share of the cost expected to fall to the public—either in the form of direct government financing, government-funded infrastructure support, and/or subsidized electricity rates. Finally, due to a recent policy change from the Government of B.C., new LNG plants are no longer required to be net-zero by 2030. Instead, they only need to be “net-zero ready,” placing the burden on the province to ensure clean electricity supplies are available. In the meantime, most LNG facilities would operate by burning natural gas, increasing emissions.

Would net-zero LNG facilities produce net-zero LNG?

LNG facilities account for less than 10% of LNG’s average life-cycle emissions (figure below)—that is, the total emissions generated by a product’s life cycle from start to finish.  Far more emissions—twice as many, on average—come from upstream gas extraction, transportation, and shipping (figure below). If all proposed B.C. LNG projects go ahead, the increase in upstream emissions from natural gas extraction, processing, and transportation could be 10 Mt per year. Implementing the federal government’s proposed regulations to limit methane emissions from the oil and gas sector could help reduce this figure, but only partially. Electrifying LNG facilities themselves, moreover, does nothing to reduce these upstream emissions. In other words, a net-zero LNG facility does not produce net-zero LNG. This means that new LNG production will increase Canada’s emissions—even if the facilities’ own net-zero goals are met.

Illustrative Life-Cycle Emissions of LNG

Source: Haig et al., 2024, based on data from Nie et al., 2020. A similar emissions distribution was also found in a recent global study of average LNG life-cycle emissions: International Energy Agency (IEA), 2025.

Q: How would Canadian LNG exports affect global emissions?

A: Canadian LNG exports are likely to increase global emissions by adding to fossil fuel consumption and slowing the transition toward renewable energy.

Will Canadian LNG reduce global emissions by replacing coal use abroad?

There is little evidence to suggest that Canadian LNG will significantly displace coal use abroad. For example, in China, it is renewable energy, not imported LNG, that is reducing the market share of coal in the power sector. The cost of new utility-scale solar photovoltaic power and storage is also falling rapidly in other countries such as India, meaning this trend of shifting from coal to renewables is expected to be replicated in other Asian markets, too. LNG, meanwhile, is typically twice as expensive to produce than it needs to be to compete with coal and renewables in China, India, and many other emerging economies.

Moreover, life-cycle emissions from LNG are typically underestimated—often by a large margin. This is mostly because a significant portion of LNG-related emissions comes from methane leaks throughout the supply chain. These leaks are systematically underreported and thus underestimated in life-cycle emissions comparisons. While most studies do conclude that life-cycle emissions from LNG are still lower than those of coal (e.g., 25% lower on average, as estimated by the IEA), the emissions benefits of switching are often less dramatic than assumed and vary widely depending on the emissions intensity of the LNG in question.

Is the LNG Canada project “60%” cleaner than the global average LNG production?

The commonly cited claim that LNG Canada is “60%” cleaner than average is based on the environmental assessment report from the LNG Canada project. That report estimated the emissions intensity of both LNG Canada Phase 1 and 2, operating together at full capacity, would be 0.15 tonnes of CO2 equivalent per tonne of LNG produced (t CO2e/t LNG). This was then compared to the average of several international LNG facilities, calculated as 0.35 t CO2e/t LNG. The comparison assumes partial electrification of the total facility (Phase 1 and Phase 2). As noted above, there may be insufficient hydroelectric power available to achieve this, in which case the emissions intensity of LNG Canada could be higher than expected. Other relevant factors include policy settings, such as the stringency of industrial carbon pricing. As such, the emissions intensity of LNG Canada—and all proposed LNG projects in Canada—is uncertain, given that these figures are based on projections rather than observed emissions from operating facilities.

Even if LNG Canada was 60% less carbon intensive than international competitors, this offers an incomplete view of the relative climate impact of LNG produced in different countries. This is because the liquefaction process only refers to a small part (less than 10%, on average) of LNG’s total life-cycle emissions (figure above), as highlighted above. Assuming other emissions from upstream processing and transportation are kept constant for the purpose of illustration, 60% cleaner liquefaction processes would result in LNG that is only 5% cleaner overall (figure below). When comparing the climate impacts of LNG, what matters most is total life-cycle emissions, not the emissions intensity of the liquefaction facilities alone. 

Is Canadian LNG (in general) cleaner than the global average, and if so, could this help reduce global emissions?

Estimates regarding the total life-cycle emissions of LNG vary widely due to differing methodologies and assumptions. Emissions estimates for Canada’s LNG facilities, moreover, are based on projections that have not been confirmed with observed data.  In this context, one meta-analysis of emissions studies for Canadian LNG found the average estimate for total production, transportation, liquefaction, and shipping emissions (“well-to-tank emissions”) to be 23.35 gCO2e/MJ. The average well-to-tank emissions for LNG delivered to Europe were estimated to be 21.31 gCO2e/MJ using the same methodology.

The IEA has estimated that Canadian gas production is generally less emissions intensive on average than that of some LNG producers, such as Malaysia and Indonesia, but significantly more polluting than Qatar, which is the world’s cheapest LNG exporter. Indeed, Canadian gas is typically extracted by fracking, a highly polluting process. Relative to these estimates from the IEA, expanding LNG production in Canada would increase the emissions intensity of Canadian gas production overall (due to the increased energy requirements of LNG production and transportation), while reducing methane leakage, venting, and flaring would lower the emissions intensity.  The carbon footprint of Canada’s LNG facilities themselves may also be higher than expected if electrification is not possible in the short-to-medium term (as is likely) and facilities are powered by natural gas instead of hydroelectricity. The bottom line is that the potential emissions advantage of Canadian LNG over international competitors is currently unclear.

Even if Canadian LNG were cleaner than international competitors, we cannot assume that it will replace LNG produced elsewhere. Rather, new LNG projects will generally add to the total global production and consumption of LNG (while reducing profits for producers). In other words, addition is more likely than substitution, and thus emissions are expected to rise. Because of this, it is best practice to consider the emissions impact of new fossil fuel projects in absolute terms—that is, relative to no expansion—rather than in relation to other projects elsewhere.

Would LNG help or hinder the global transition to renewable energy?

Instead of displacing coal use abroad, or even other LNG products, flooding the market with more LNG could disincentivize investments in electrification and new renewable power generation. This is because an oversupply of LNG would deflate gas prices (at the cost of exporters, like Canada), making it more likely for governments and/or companies to lock in long-term fossil fuel infrastructure. This effect may be amplified by market distortions, such as fossil fuel subsidies and geopolitical pressure to expand LNG trade, even as market dynamics increasingly favour renewables over imported LNG. Considering factors such as these, detailed modelling from the U.S. Department of Energy in 2024 found that new LNG exports from the United States are expected to displace more renewables than coal abroad, all while increasing total fossil fuel consumption. The study concluded that “in every scenario, increases in [U.S.] LNG exports would lead to increases in global net emissions.”

Q: Is Canadian LNG a climate solution?

A: No. New Canadian LNG is incompatible with climate targets and diverts resources away from real climate solutions, such as renewable power generation and a clean transportation system.

Is more Canadian LNG compatible with a safe and stable climate?

Regardless of LNG’s emissions relative to other sources of fuel, new LNG production will make it more difficult to stabilize the climate. To maintain the science-aligned 1.5°C limit on global temperature rise, no new long-lead time upstream oil and gas projects are needed—as confirmed by the IEA and others. This includes new LNG facilities that would enable increased upstream gas extraction in Canada’s Montney Basin—one of the world’s largest sources of unburned carbon emissions. In fact, projected fossil fuel production in 2030 is more than double what would be consistent with the 1.5°C limit. Even many existing fossil fuel projects would need to shut down early—including some in Canada—if demand declines in line with this target.

Alternatively, if new projects are developed and fossil fuels continue to be consumed at a level needed to support them, the climate will be destabilized further. Every tenth of a degree of warming matters, with climate impacts on people and the planet expected to increase dramatically as temperatures increase. That means more wildfires, tropical storms, food insecurity, flooding, droughts, human displacement, and wildlife extinctions. The science is clear: a safe and stable climate requires transitioning away from fossil fuels and scaling up clean energy as quickly as possible. For governments that are serious about meeting globally agreed climate goals and protecting their citizens from the worst impacts of climate change, LNG expansion is simply not an option.

Do LNG projects come with opportunity costs?

The governments of Canada and B.C. have allocated at least CAD 3.93 billion in financial support for new LNG projects by the end of 2030. This creates an opportunity cost as public money is used to enable fossil fuel development at the expense of other projects that could create jobs, reduce household costs, and facilitate the transition toward a cleaner economy. For example, a clean transportation system could employ over 1.6 million people by 2050. A net-zero electricity grid could save Canadian households CAD 15 billion annually by 2050. Meanwhile, a wave of clean energy retrofits for Canadian homes could save households CAD 10.8 billion annually by 2050 while creating over 100,000 jobs. The more public money is used to expand fossil fuel infrastructure, the less is available to support real climate solutions.