Liquefied natural gas exports from Canada to China: An analysis of internationally transferred mitigation outcomes (ITMO)

Abstract

The ever-increasing anthropogenic greenhouse gas (GHG) emissions worldwide make it quite challenging to meet country-specific Nationally Determined Contributions (NDC) targets. Therefore, it is evident that the existing emissions abatement measures need to be taken a step further. Internationally Transferred Mitigation Outcomes (ITMOs) are allowed in Article 6.2 of the Paris Agreement as a cooperative approach to achieving NDC goals. There is a potential to create ITMOs between Canada and China by replacing coal use in China with British Columbia (BC)'s liquefied natural gas (LNG) supply. Replacing coal with LNG in energy generation applications is a promising approach to mitigate emissions. With global and national pressures to reduce emissions, China has created a market for LNG imports to cater to its rising natural gas (NG) consumption due to the coal-to-gas source switching strategy. However, the terms under Article 6.2 requires generated ITMOs to ensure environmental integrity, support sustainable development goals, and have a robust accounting system. Therefore, the current study aims to quantify the life cycle environmental outcomes of generating ITMOs by exporting LNG from BC to Chinese end-users while integrating uncertainties and to provide policy recommendations in adherence with the requirements of Article 6.2. Different LNG export scenarios were generated in the study and environmental impacts of each scenario were assessed and compared using a life cycle assessment (LCA) framework developed by the authors. Sensitivity and uncertainty analyses were conducted to understand the impacts created by the data uncertainties in the final result. By replacing conventional coal with NG, approximately 40–45% and 26%–32% emissions reductions can be obtainable for Chinese textile and chemical industries, respectively. The highest emissions reduction of approximately 60% was observed when coal is replaced with NG for district heating. The life cycle emissions (LCE) quantification framework provided in the study provides stakeholders with a systematic approach to determine the total GHG emissions and emissions reduction potential of different LNG export scenarios.