Japan’s top LPG supplier Astomos Energy said Aug. 17 it has received the country’s first carbon neutral LPG cargo bought from Shell at its Chiba import terminal, with an intention to procure more of such cargoes on a spot basis as part of its efforts toward carbon neutrality.
The 47,000 mt of carbon neutral LPG, bought from Shell International Eastern Trading Co., was discharged Aug. 16 from VLGC Astomos Earth at the Chiba import terminal after having loading at Ruwais, Abu Dhabi on July 22.
Astomos, which is 51% held by Idemitsu Kosan and 49% by Mitsubishi, intends to sell its carbon neutral LPG by providing domestic end users an option of the carbon neutral supply but the company has yet to decide on its sales scheme as yet, a company spokesman said.
A Japanese trading source said at the moment there is no incentive for Japanese importers and end users to switch to using costlier carbon-neutral LPG.
“In fact, there is no incentive, there are no customers who can pay such premium, but I guess it is just a matter of time, gradually, this scheme is spreading in Japan, and finally people will have to pay something,” the source said.
There is no mandate or law for using carbon-neutral LPG, he said, but “maybe big companies like Toyota intend to reduce carbon emissions, so there is a possibility that such requirement will happen.”
While he is concerned with the possible increase in costs to the LPG industry and consumers, “I guess this scheme is not easy to stop, so it might take a bit of time, but finally end users have to bear such costs.”
Astomos’ move comes at a time when there are an increasing number of Japanese companies purchasing carbon-neutral LNG and using carbon-neutral city gas, on the heels of accelerated efforts toward Japan’s 2050 carbon neutrality target. Currently, Japanese companies, both buyers and sellers of carbon neutral LNG or LPG, cannot claim their CO2 offset under the act of promoting global warming countermeasures when they procure and use the carbon neutral gas.
Ichthys supply
On the supply side, Japan’s INPEX is expanding its portfolio of carbon neutral products at the Ichthys project in Australia using carbon credits to include condensate and LPG, after arranging its maiden carbon-neutral LNG cargo shipment in July, a company official told S&P Global Platts July 15.
INPEX is seeing demand increase for its carbon-neutral gas and LNG supplies, as well as interest in its prospective supply of carbon neutral condensate and LPG from the Ichthys project, the official said. The Ichthys project is operated by INPEX with a 66.245% stake.
INPEX, which markets its equity share of Ichthys LPG and condensate output, has a sale and purchase agreement with Astomos to supply Ichthys LPG.
Source: Platts