The S&P Global Commodity Insights study examined emissions reductions pathways for power generation.
- Using LNG to support renewable energy to accelerate coal retirements could be a viable approach that balances affordability and emissions reduction
- LNG from Australia, Qatar and the US had an average lifecycle carbon intensity 47% lower than coal for equivalent electricity output
- Power sector emissions would be reduced by 33-38% with an additional energy system investment of only 8-16%
The independent study, commissioned by the Asia Natural Gas & Energy Association (ANGEA), examined emissions reduction pathways to 2050 for power generation in Japan, the Philippines and Vietnam.
For each focus country, the study identified that a balanced approach to energy transition in the power sector – with LNG-fired power supporting expanded use of renewables – would achieve significant emissions reductions in a cost-effective manner.
The balanced approach would support the retirement of 50 per cent of coal-fired power by 2035.
“This study underscores the critical role that Australian LNG should play in helping Asia decarbonise and debunks the myth that nations must choose between rapid decarbonisation and economic growth,” ANGEA CEO Paul Everingham said.
“With more than 90 per cent of power sector emissions in Asia resulting from coal-fired generation, global decarbonisation will depend on the region’s ability to phase out coal.
“The S&P Global Commodity Insights analysis highlights pathways for Japan, the Philippines and Vietnam – and by extension, other nations in Asia – to do this and reduce power sector emissions by 33-38 per cent by 2035, while only investing 8-16 per cent more in their energy systems.
“The common element to each of those pathways is increased use of LNG, providing reliable power generation that complements the rollout of more renewable energy
“On average, for each tonne of CO2 emitted in producing and shipping LNG from Australia, the US and Qatar, more than 3 tonnes of emissions are avoided on a lifecycle basis when replacing coal in power generation in the study countries.
“Australia is already Asia’s biggest source of LNG and it’s essential that it continues to be a reliable supplier of affordable gas in decades to come.
“This applies not only to existing trade partners such as Japan but also the Philippines, Vietnam and other growing economies seeking to use more LNG to displace coal.”
The study modelled the lifecycle emissions profile of LNG against coal, along with the cost and emissions reductions outcomes of a range of decarbonisation pathways.
In addition to a balanced case scenario for each country, S&P Global Commodity Insights modelled a base case scenario reflecting a business-as-usual trajectory, along with an accelerated approach that would result in full decarbonisation by 2035.
“Both the Philippines and Vietnam would have to more than double their investment in energy systems to achieve full decarbonisation by 2035, while Japan would have to invest nearly 75 per cent more,” Mr Everingham said.
“And that’s before you take into account the average marginal electricity prices – the costs paid by communities and industries – which would more than double for the Philippines and more than triple in Japan and Vietnam.
“No country can entertain that type of financial burden, especially not emerging nations such as the Philippines and Vietnam, where continued economic growth is needed to raise living standards.”
S&P Global Commodity Insights Director, Energy Transition Consulting, Allen Chan said its consulting team had taken a technology-agnostic approach to mapping out viable pathways for accelerating coal retirements in Asia.
“We think this study is an important piece of analysis that can contribute to discussions in the region about how decarbonisation and coal phasedown can best be pursued and progressed, by providing quantitative data points to inform trade-offs of different pathways,” Mr Chan said.
“For the assessed countries, LNG has significantly lower emissions than coal, with an average lifecycle carbon intensity 47 per cent lower, and end-use emissions 57 per cent lower.
“This study shows that renewable energy supported by gas is well placed to accelerate coal phase-out in Japan, the Philippines and Vietnam, while balancing affordability concerns.”
Mr Everingham said the study findings aligned with energy plans being progressed in Asia.
“Australia has gas resources that can be used to meet both domestic needs and demand from allies in Asia for decades to come.
“What Australia needs is political will to make this happen and a policy and regulatory environment that is conducive to major investments required to progress gas projects.
“Australia has a huge opportunity to contribute to meaningful decarbonisation in Asia through LNG exports. But inaction will see that opportunity missed and make it more likely that coal use continues to grow in Asia.”
Media contact
Simon White
simon.white@angeassociation.com
