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    Sakhalin-2 group delivers first carbon neutral LNG to Japan


The Sakhalin region is due to launch a pilot carbon trading system in 2022. [image credit: Sakhalin Energy]

by: Joseph Murphy

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Sakhalin-2 group delivers first carbon neutral LNG to Japan

The Gazprom-led Sakhalin Energy consortium that operates the 10mn metric ton/year Sakhalin LNG terminal in the Russian Far East has delivered its first carbon neutral/offset LNG cargo to Japan, the group said on October 13.

The cargo was delivered on board the Russian Grand Aniva LNG carrier to Japan's Toho Gas at the Chita terminal in the Aichi prefecture. To offset its emissions, carbon credits were purchased from Gazprom, and  Sakhalin Energy is looking into buying Russian carbon credits using a pilot carbon trading system on Sakhalin to cover future shipments, as well as generating them from environmental projects.

Commenting, Sakhalin Energy CEO Roman Dashkov said he expected that carbon neutral/offset LNG would be "a competitive standard offer for many years ahead."

Sakhalin Energy announced it would cooperate with Toho Gas in decarbonisation last month. Besides Gazprom, the consortium's members include Shell and Japanese companies Mitsui and Mitsubishi.

Sakhalin Island is due to launch its pilot CO2 trading scheme in 2022, as part of its ambition to become Russia's first carbon neutral region by 2025. This is part of a broader effort by Russia to decarbonise, to ensure its exports are judged as sufficiently clean in climate-conscious markets such as Europe.

Under a plan announced in September, Russia will start requiring companies with emissions above 150 kilotons of CO2/year to report those emissions in 2022. The threshold will be lowered to 50 kilotons/yr in 2024 – the year that the government hopes to approve a law on a national carbon trading system. The system will be piloted in 2025 and go into full-scale operation in 2026, coinciding with the EU's launch of its carbon border adjustment mechanism.