Italy's Eni to supply carbon-neutral LNG cargo to Taiwan's CPC Corp.

Italy's Eni said Aug. 6 it had agreed to deliver a carbon-neutral LNG cargo to Taiwan's CPC Corp. at the Yung An receiving terminal as the Italian company looks to move forward with its decarbonization strategy.

A number of global LNG players have started offering carbon-neutral LNG cargoes, including Shell, BP and Russia's Gazprom, as buyer interest in securing greener LNG continues to grow.

Eni said it would source the LNG from the Bontang liquefaction facility in Indonesia as part of its contract with Eni Muara Bakau, the joint venture operated by Eni that owns and operates the Jangkrik gas field.

"This is a milestone transaction for Eni, which shows how the company is moving forward in its decarbonization strategy while creating value for its LNG portfolio through own equity projects," it said in a statement.

The greenhouse gas emissions related to the entire value chain of the LNG cargo are to be offset through the retirement of high-quality nature-based credits, Eni said.

The cargo will be certified as carbon neutral according to the internationally recognized PAS2060 standard, it added.

The emissions related to the entire value chain of the LNG cargo, including gas production, transmission, liquefaction, shipping, regasification, distribution and end use, will be offset through the retirement of the credits.

The credits were sourced through the Luangwa Community Forest project in Zambia and Kulera Landscape REDD+ project in Malawi, Eni said.

The greenhouse gas emissions of the LNG cargo will be calculated using Eni's proprietary methodology, it added, which follows a lifecycle approach for the comprehensive accounting of the emissions related to energy products sold.

"This methodology is third-party reviewed and provides an integrated view of emissions along the full value chain," Eni said.

Eni's long-term strategy aims to achieve full carbon neutrality in its products and operations by 2050, with intermediate reduction targets of net lifecycle emissions (Scope 1, 2, 3) of 25% by 2030 and 65% by 2040 compared with 2018 levels.

Carbon-neutral LNG assessment

In mid-June, S&P Global Platts launched the world's first daily carbon-neutral LNG price assessment, tracking the cost of carbon credits used to offset the carbon emissions for an LNG cargo on the world's most active trade route.

The carbon-neutral LNG (CNL) assessment reflects CO2 emissions offset on a well-to-tank (WTT) basis and takes into consideration emissions associated with production, including an estimate for fugitive emissions, liquefaction, freight (including ballast leg) and regasification.

The Platts CNL WTT JKTC assessment reflects LNG cargoes loaded in Australia and delivered to the JKTC market (Japan, South Korea, Taiwan, and China), which is the most active LNG trade route in the world.

The CNL WTT JKTC differential was assessed Aug. 5 at $0.083/MMBtu.