Decarbonise LNG production and transition to renewable hydrogen

Wind turbines at a hydrogen energy storage plant

The opportunity

The production of Liquified Natural Gas (LNG) for export is Western Australia’s largest source of carbon pollution, eclipsing all other sources in the state. Even more pollution results from burning this fossil fuel overseas.

While further growth in the production of LNG must be prevented to avoid further pollution growth, there is a significant opportunity to decarbonise and transition WA’s existing LNG production facilities in a way that can create thousands of jobs across the state.

Decarbonising WA’s biggest polluters in the LNG industry presents a huge opportunity for job creation in engineering, renewable energy, energy efficiency, and carbon offsetting industries that can benefit communities across the state.

In 2009, Clean State released the first comprehensive investigation of direct carbon emissions from Western Australia’s Liquefied Natural Gas (LNG) industry, revealing alarming growth in pollution that  is undermining Australia’s national efforts on climate change.

Currently, five operating WA LNG facilities are in the Top 10 list of WA’s highest polluters and produce more than double the emissions of WA’s three coal-fired power stations. Where conditions to control pollution have been imposed on some LNG projects by the State Government, they are inconsistent, inadequate, unenforceable, and in some cases have been removed altogether.

As a result, Clean State estimates that existing WA LNG production facilities will account for over 25% of the state’s emissions and 5% of national pollution. If Woodside’s proposed Burrup Hub expansion were to proceed, this would further increase, placing our state and national emissions reduction targets out of reach.

The proposal

Clean State is advocating for Western Australia’s LNG production industry to be transitioned to exporting renewable energy derived hydrogen. Until this occurs, existing LNG operations can reduce domestic (Scope 1) emissions to net zero to deliver action on climate change and create thousands of jobs of West Australians.

This can be achieved through:

  1. State Government and Environmental Protection Authority (EPA) updating Ministerial Conditions on all existing LNG production facilities to:
    – require emissions avoidance and reduction measures according to the ‘abatement hierarchy’.
    – require all remaining emissions to be offset here in Western Australia through carbon farming, renewable energy and other offset industries that create jobs.
  2. Support the scaling up of the WA carbon farming industry to supply the demand for offsets (see separate initiative).
  3. Accelerate the adoption of the WA Renewable Hydrogen Strategy and prioritise the transition of existing LNG industries to renewable hydrogen production.
  4. Update State Agreements, Ministerial Statements, operating licenses and regulations governing LNG operations to provide a regulatory pathway and support for transition to renewable hydrogen production and exports.
  5. Support the establishment of the Asia Renewable Energy Hub in the Pilbara to provide a large-scale renewable energy source for hydrogen production, so long as the location is appropriate to all environmental conditions are met.

Carbon Savings

Decarbonising current LNG production would save around 25 million tonnes per year of carbon pollution – around a third of Western Australia’s total carbon emissions from all sources.

How many jobs would this create?

Reducing and offsetting emissions from existing LNG projects would create around 4,000 jobs, mostly located in regional areas. Jobs would be created in undertaking work on LNG facilities as well as offset industries such as carbon farming and renewable energy installation. This job creation opportunity could be realised at no cost to government, with LNG profits easily accommodating the cost of decarbonisation as demonstrated by Woodside’s $80/t internal carbon price. The transition to hydrogen production would create even more jobs, and there is the potential for this industry to scale up significantly as the demand for polluting fossil LNG declines.