Credit Check: Should Canada get climate credit for its liquefied natural gas exports?

This policy brief by the International Institute for Sustainable Development (IISD) evaluates the proposal that Canada should receive climate credits under Article 6 of the Paris Agreement for exporting liquefied natural gas (LNG). The author argues that such credits are likely impossible to obtain and environmentally unsound, as they would struggle to meet the 'additionality' requirement—proving that LNG exports directly caused a reduction in coal use abroad. The brief concludes that the only feasible path to such credits would involve costly subsidies and technology transfers that would contradict Canada's own climate policies and lock in fossil fuel infrastructure.

• The proposal to gain credits via Article 6.2 (internationally transferred mitigation outcomes or ITMOs) faces a critical challenge regarding 'additionality,' as it is difficult to prove that foreign facilities would have burned coal specifically if not for Canadian LNG.
• The actual climate benefit of LNG is questioned due to higher-than-reported upstream methane emissions and the high energy intensity required for liquefaction, storage, and transport.
• Claiming credit for how other countries use Canadian exports would deviate from standard UNFCCC accounting rules, which generally hold countries responsible for emissions occurring on their own soil.
• Unlike typical Article 6.2 deals, which often involve development assistance, LNG exports are commercial transactions where the buyer receives no additional benefit that would incentivize them to transfer emission credits to Canada for free.
• A more feasible but flawed approach would involve Canada providing technology transfer and finance to help buyers switch from coal to gas, but this would violate Canada's policy to end subsidies for the international unabated fossil fuel energy sector.

APA

Cosbey, A. (2024). Credit Check: Should Canada get climate credit for its liquefied natural gas exports? International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-10/credit-check-lng-exports-canada.pdf

Chicago

Cosbey, Aaron. Credit Check: Should Canada get climate credit for its liquefied natural gas exports? International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-10/credit-check-lng-exports-canada.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |title=Credit Check: Should Canada get climate credit for its liquefied natural gas exports? |publisher=International Institute for Sustainable Development |date=October 2024 |url=https://www.iisd.org/system/files/2024-10/credit-check-lng-exports-canada.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2024credit, author = {Cosbey, Aaron}, title = {{Credit Check: Should Canada get climate credit for its liquefied natural gas exports?}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = oct, url = {https://www.iisd.org/system/files/2024-10/credit-check-lng-exports-canada.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }