By Dare Akogun
A new report by climate watchdog, Solutions for Our Climate (SFOC), has raised alarm over the growing climate footprint of the global liquefied natural gas (LNG) shipping industry, revealing that the sector is responsible for enabling an estimated 12.7 billion metric tonnes of carbon dioxide equivalent (CO₂e) emissions annually nearly matching China’s yearly emissions of 15.9 billion tonnes.
The report warns that the LNG fleet’s contribution to global greenhouse gas emissions is fundamentally incompatible with efforts to limit global warming to 1.5°C. Despite this, industry actors are pressing ahead with large-scale fleet expansions, risking a looming overcapacity crisis that threatens global climate ambitions and financial stability in the energy market.
Figure 1: GHG Emissions Comparison: China 2023 vs LNG Carriers vs US 2023
(Source: China and US country emission data from Emissions Database for Global Atmospheric Research)
The estimated footprint attributed to LNG carriers covers both direct emissions from vessel operations and the far larger enabled emissions across the LNG lifecycle, including stages from extraction, liquefaction, and maritime transportation to regasification and final combustion.
While shipping companies typically disclose operational emissions, they fail to report the much larger lifecycle emissions of the LNG they transport. This creates a significant accountability gap in global greenhouse gas (GHG) inventories.
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 spills during maritime transport. 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 emits more CO₂ than coal.
The LNG carrier boom: driven by few, backed by billions
Despite growing climate concerns and slowing demand projections, the LNG shipping industry is rapidly expanding. The global fleet has tripled to 1,032 vessels since 2014, with an additional 324 under construction and expected to operate for at least 30 years. This surge in orders raises concerns about potential stranded assets and an oversaturated freight market.
Figure 2: LNG Carrier Fleet Growth from 2014 to 2025
(Source: Clarkson Data)
Greece now leads in global LNG ship ownership with 195 carriers, enabling roughly 2.4 billion tonnes of CO₂ emissions annually through the LNG they transport. Japan and China follow with 175 and 112 carriers, respectively.
Qatar’s Nakilat remains the world’s largest LNG shipowner with 79 vessels, followed closely by Japan’s Mitsui O.S.K. Lines and NYK Lines, Greece’s Angelicoussis Group, and Norway’s Knutsen OAS Shipping. South Korean shipyards (Hanwha Ocean, Hyundai Heavy Industries, and Samsung Heavy Industries) are at the forefront of this building spree, responsible for the construction of nearly 80% of new LNG carriers.
Big banks and public institutions are fueling LNG shipping expansion
Over the past five years, US$335 billion has been funneled into LNG maritime financing through 175 transactions. Almost 40% of this amount has been funded by just 10 banks, including Mitsubishi UFJ, Mizuho, and JPMorgan Chase.
Table 1: Top 10 Banks’ Maritime LNG Related Financing (2019-2024)
Source: Stand.earth (2024). Banking on a climate shipwreck
Strikingly, general-purpose corporate loans (US$65.6B) have surpassed project-specific financing, suggesting that LNG expansion is being propped up through unrestricted capital flows rather than strategic energy investments.
The South Korean government has emerged as a major public financier, with public support peaking at US$12 billion in 2022. Over the past decade, South Korea has provided US$44.1 billion in public support across 652 financing instances, raising questions about the credibility of its pledge to phase out fossil fuel subsidies and achieve carbon neutrality.
Rachel Eunbi Shin, Gas Team Consultant at Solutions for Our Climate (SFOC), criticised the continued financing of liquefied natural gas (LNG) carriers by major financial institutions, describing it as a contradiction to their public climate commitments.
According to her, “There’s a clear contradiction in major banks spending billions to finance LNG carriers while simultaneously pledging to reach net zero by 2050.
“Many of these same institutions have policies against funding upstream and downstream LNG infrastructure, yet continue to back the ships that transport this fossil fuel,” she said.
She noted that with freight rates at historic lows driven by oversupply, further investment in LNG carriers is not only damaging to the climate but also economically irrational.
Her comments come in the wake of the International Maritime Organization’s (IMO) adoption of its Net-Zero Framework at MEPC 83 in April, which introduces greenhouse gas (GHG) reduction targets and fuel levies starting from 2028.
“The solution to reducing shipping emissions couldn’t be clearer,” Shin added. “Stop building ships we don’t need.”
By Dare Akogun
