More U.S. LNG is Needed to Support Asia’s Emissions Reduction Goals, New Study Finds

Coal use and emissions from power generation in Asia will surge in coming decades unless there is significant new supply of U.S. liquefied natural gas (LNG), a new study by data and analytics company Wood Mackenzie has shown.

The study, commissioned by the Asia Natural Gas & Energy Association (ANGEA), models energy demand, power generation and the implications for gas demand for nations across Asia through to 2050.

The study found continued growth in LNG production from the U.S. – the world’s biggest exporter – was essential to balancing global markets and providing emerging Asia with an affordable and available alternative to the high-emitting coal that is currently the region’s dominant energy source.

Wood Mackenzie forecasts LNG demand from Asia growing from 270 million tons per annum in 2024 to 510 million tons per annum in 2050, fueling economic and population growth across emerging economies, and supporting greenhouse gas emissions reduction, alongside investment in renewables.

Without the resources to be self-sufficient, Asia must rely on LNG imports to meet its natural gas needs.

“Wood Mackenzie has modelled two scenarios: one where the current halt to U.S. LNG export approvals to non-free trade agreement countries is lifted early in 2025 and another where this ‘pause’ stays in place longer-term,” ANGEA CEO Paul Everingham said. “If the pause is lifted and approvals and development of export facilities resume, then U.S. LNG is expected to comprise a third of global supply by 2035. But if it remains in place and planned and proposed U.S. LNG projects are not developed, there is a risk that LNG developments in other regions will fail to keep pace with anticipated demand growth."

Everingham added that the Wood Mackenzie study was notable for the realistic approach it took to Asia’s energy transition, as emerging nations sought to maintain energy security and economic growth while reducing emissions.

“Rather than starting at net zero and working backwards to provide an unrealistic picture of the energy sources Asia will use over the next 25 years, Wood Mackenzie has carefully analyzed individual countries to project their most likely energy pathways, as they strive to reduce greenhouse gas emissions,” Everingham said.

“The rollout of renewable energy in Asia is a complex undertaking and we’ve already seen countries having to cut back on renewables targets. Natural gas and LNG provide an opportunity to reduce power-related emissions and coal use, while also ensuring energy security.”

Mangesh Patankar, Head of Asia Gas and LNG Consulting at Wood Mackenzie, said that the company forecasts growth in Asia’s LNG demand from the 2030s onwards would mostly come from South Asia and Southeast Asia.

“LNG will continue to play a strong role in the Japanese, South Korean and Taiwanese economies to 2050. However, demand from these countries will decline slowly as energy transition measures progress,” Patankar said. "Growth in LNG demand from China will be strong until the early 2030s but is expected to be limited after that as piped gas projects from Russia are expected to enter operations and ramp up.

By contrast, Southeast Asia and South Asia will experience rapid growth in LNG demand throughout the 2030s and beyond, as energy demand continues to grow at pace and LNG provides a low-cost and low-carbon solution, alongside renewables, to reduce dependence on coal-fired power amidst depleted and declining domestic gas resources."

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