Canada's B.C. province sets high emissions bar for new LNG projects

British Columbia's decision this week to toughen emissions standards for new liquefied natural gas (LNG) projects creates one of the most robust climate plans in North America, but sets a high hurdle for industry even as many countries look to Canada to become a global supplier of gas.

As part of a new energy action framework, the western Canadian province will require proposed LNG projects that are going through or entering the environmental assessment process to have a credible plan to be net-zero emissions by 2030.

While the tougher regulation will not impact the huge Shell-led (SHEL.L) LNG Canada project already under construction, a proposed export terminal adjoining the small-scale Tilbury LNG facility and the early-stage Ksi Lisims LNG project in northern B.C will fall under the new rule.

Canada is the world's sixth-largest gas producer and its west coast LNG industry has seen revived interest as the world tries to secure alternatives to Russian gas supply following the invasion of Ukraine.

The province will start exporting 14 million tons per annum (MTPA) when LNG Canada enters service in 2025.

"That (net-zero requirement) is a very high bar and a high hurdle to pass," said Mark Zacharias, executive director of think-tank Clean Energy Canada, adding the new framework rounds out B.C.'s plan to cut emissions 40% below 2005 levels by 2030.

"The B.C. roadmap to 2030 is probably North America's strongest climate plan but what was missing until now was answers on dealing with oil and gas. This fills in the missing gaps."

Ksi Lisims, proposed as a 12-MTPA plant, will achieve net-zero through a fully electrified facility that utilizes renewable hydro power and carbon offsetting, spokesperson Rebecca Scott said.

FortisBC, one of the companies behind the Tilbury Marine Jetty project, said it welcomed the clarity the framework provides for LNG development and "looked forward to engaging with government" on the 2030 guidelines.

Reuters