Emission taxes on European LNG imports could split the global LNG market

The environmental footprint of LNG is under increasing scrutiny. Despite emitting about half the carbon dioxide (CO2) of coal when combusted, the LNG value chain remains highly carbon intensive and plagued by methane losses. The EU has extended its Emission Trading Scheme (ETS) to shipping, meaning that LNG cargoes into Europe will be subject to a carbon tax from 2024. But the fear is that if goes one step further and tightens it methane regulation or includes LNG in its Carbon Border Adjustment Mechanism (CBAM) then a two-tier, imbalanced global LNG market would result. Source: Wood Mackenzie