Global LNG fleet’s annual CO2 emissions exceed 12 billion tonnes

Methane leakage accounts for a significant share of total LNG emissions yet remains a major blind spot in industry reporting. Methane, a GHG 80 times more potent than CO₂, can leak throughout the LNG lifecycle, from extraction and liquefaction to potential slips during maritime transport.

Furthermore, the emissions from these leaks are widely underreported and undermine the industry’s longstanding claim that LNG is a cleaner “bridge fuel.” When overall emissions are fully accounted for, LNG, in fact, emits more than coal.

Five systemic challenges facing LNG shipping

The analysis identifies five fundamental contradictions that demand urgent attention in the LNG shipping sector:

• Climate Pathway Incompatibility

Previous research demonstrates that the current LNG carrier orderbook far exceeds what’s compatible with a 1.5°C pathway.

Each new vessel ordered today locks in fossil fuel infrastructure for 30+ years, directly undermining global climate commitments.

• Emissions Accountability Gap

While shipping companies report their direct operational emissions and supply chain emissions, they do not account for the lifecycle emissions of the LNG cargo they transport. Each LNG carrier enables decades of greenhouse gas emissions across the entire supply chain – from extraction to end-use – including substantial fugitive methane emissions from leakage and slip. These enabled emissions represent a far greater climate impact than the shipping operations alone and remain largely invisible in current industry reporting practices.

The industry’s true climate impact reaches approximately 12.7 billion metric tonnes of CO2e annually-systematically underrepresented by current accounting practices.

• Concerned Financial Control

Just 10 banks (5% of institutions) control nearly half (\$127 billion) of all LNG-related maritime ship financing over the past five years.

Major institutions like MUFG, JPMorgan Chase, and HSBC are accelerating LNG infrastructure expansion while contradicting their own climate commitments.

• Public Policy Contradiction

Public financing is actively undermining climate goals, with South Korea alone providing $44.1 billion in support for LNG carriers over the past decade.

This pattern extends across major shipbuilding nations, undermining climate goals and creating market distortions that further drive overcapacity,
Market Overcapacity Risk

• Speculative Ordering Creates Stranded Asset Exposure

Conventional shipowners frequently order vessels without securing long-term charters, creating significant market overcapacity. The current oversupply of LNG carriers is already driving charter rates to historic lows, validating warnings of stranded asset risks. Despite this downturn, new orders continue — exposing both public and private financiers to growing financial and climate risk.

This speculative expansion has historically led to boom-bust cycles requiring public bailouts, now compounded by accelerating energy transition risks.

These findings underscore the urgent need for a strategic reassessment of the industry’s expansion plans and investment patterns to align with global climate imperatives.

Recommendations:

• For Shipowners: Disclose enabled emissions and develop fleet transition plans with specific reduction targets
• For Financial Institutions: Set clear phase-out timelines for LNG carrier financing by 2025
• For Public Finance Entities: Terminate support for new construction and develop transition program