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.” 

Karen Ogen is CEO of the First Nations LNG Alliance. Photo supplied to Canadian Energy Centre

From the Canadian Energy Centre

By Will Gibson

First Nations LNG Alliance CEO Karen Ogen takes message of coastal nations to Beijing

Participating in a recent trade mission to China has strengthened Karen Ogen’s view of the opportunity for B.C. liquefied natural gas (LNG). 

For the CEO of the First Nations LNG Alliance, one of 10 Indigenous business leaders in the Canada China Business Council’s trade mission to Beijing in late October, the opportunity was as obvious as the grey smog that blankets the air above China’s capital city on most days. 

“So much of the problem with smog and air quality stems from using coal-fired plants to generate electricity,” says Ogen, a former elected chief and councillor of the Wet’suwet’en First Nation.  

Researchers have found that switching Chinese coal plants to natural gas from Canada could reduce emissions by up to 62 per cent. 

“The Chinese don’t view LNG as a fossil fuel. They see it as an important part of moving towards carbon neutrality,” Ogen says. 

“There are huge opportunities for LNG in China and other Asian markets, especially for the coastal nations in British Columbia. The need is there, and the appetite is there. It’s up to us to take advantage of it.” 

Ogen previously took trips to China between 2015 to 2018. The most recent trade mission was organized by the Canada China Business Council specifically for Indigenous businesses, organizations and leaders to build connections and partnerships to develop export markets and sources of investment to facilitate exports. 

Ogen said the delegation gained valuable insights into new forces shaping China in the post-pandemic era, notably around using social media platforms such as TikTok as part of their marketing and e-commerce outreach to the Chinese market. But she remains struck by the appetite for LNG as a lever to lower emissions as energy demand rises. 

“China produces 30 per cent of the world’s greenhouse gas emissions — it’s the world’s largest emitter and they are committed to addressing that,” Ogen says. 

The U.S. Energy Information Administration projects natural gas demand in the Asia Pacific region will increase by 55 per cent in the next three decades, reaching 54 trillion cubic feet in 2050. 

Canada can make a meaningful difference in helping reduce emissions by supplying Asian markets with LNG, she says. 

“Converting coal-fired plants in China to LNG produced in Canada would make a bigger impact on greenhouse gas emissions than anything we do in Canada,” Ogen says.  

“Canada needs to think globally when it comes to climate change.” 

The United States already has seen this opportunity and is addressing it by aggressively expanding LNG exports. Already one of the world’s largest LNG exporters, there are five new LNG projects being built in the U.S. 

Canada’s first LNG project is under construction with first exports targeted by 2025. Two Indigenous communities on the B.C. coast are advancing their own proposed terminals, Cedar LNG and Ksi Lisims LNG.  

Ogen doesn’t want to see Canada or B.C.’s coastal First Nations shut out of the opportunities she saw on the trade mission. 

“The message we received from China’s officials was very clear. They are prepared to do business with Canada and Canada’s Indigenous business community. There are opportunities for investment,” she says.  

“But we need governments to work with us to realize those opportunities. If we pursue them seriously, there are real economic benefits for Canada and First Nations.” 

And the five-day trade mission has convinced Ogen about the need to address the barriers for Canadian LNG. 

“We have a real opportunity to help address climate change while benefiting First Nations,” she says. “It makes too much sense for us not to fight for this.”