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.”