From the Canadian Energy Centre

By Cody Ciona and Deborah Jaremko

Sharing emissions reductions through Article 6 is possible when LNG replaces coal in power generation

With Asian countries continuing to rely on coal to fuel their growth, Canada can provide a cleaner alternative while having its efforts to reduce emissions recognized by the global community, says a new report. 

 Canada is getting closer to exporting some of the lowest-emitting liquefied natural gas (LNG) on the planet, with the first terminal nearing completion in British Columbia.  

 A Canadian think tank argues providing a significantly cleaner alternative to coal should merit credit for helping Asian countries reduce emissions under a global climate treaty. 

 “Sharing emissions reductions through Article 6 [of the Paris Agreement] is possible when LNG replaces coal in power generation,” writes Jerome Gessaroli, a senior fellow with the Macdonald Laurier Institute. 

“New LNG projects within British Columbia are amongst the least carbon-intensive sources of LNG in the world. BC’s LNG exports could lower global carbon emissions by displacing coal power, particularly in the Asia-Pacific region.” 

Adopted by the United Nations Framework Convention on Climate Change in 2015, the Paris Agreement was ratified by Canada on October 5, 2016. This agreement set forth the worldwide effort to mitigate the effects of climate change.  

Article 6 outlines that countries may pursue “voluntary cooperation” with others to implement their nationally determined efforts to reduce emissions.  

Coal use and coal plant construction are increasing each year in Asia as countries look to grow their economies.  

The increase in coal-fired power has ostensibly created a significant challenge to meeting climate targets as emissions from announced and planned plants alone are expected to be over 1,415 million tonnes of CO2 equivalent.

“Just over half of LNG Canada’s Phase 1 production capacity in British Columbia would result in approximately 1.2 Mt CO2e emissions annually,” Gessaroli writes.  

“Using the same production capacity to replace coal for power generation in Asia has the potential to significantly reduce emissions, ranging from 14.9 to 35.2 Mt CO2e per year. Such outcomes underscore the importance of international collaborative efforts.” 

Studies have concluded that LNG from Canada can provide a net benefit in emissions reduction when switching from coal.  

Last year, global energy research and consultancy firm Wood Mackenzie found that Canadian LNG could reduce net emissions in northeast Asia by an average of 188 million tonnes per year between 2022 and 2050.  

That’s three times the emissions of the entire province of B.C., which were 62 Mt in 2021, according to the provincial inventory. 

“If Article 6 is used, the assertion that British Columbia’s pursuit of LNG production would prevent the province from meeting its emission reduction becomes inaccurate,” Gessaroli said, noting Canada should announce its intent to use Article 6 as a tool to help meet its emissions reduction targets. 

“These are complex issues, but we can learn from other countries that have already established processes for managing such projects.”