[Carbon Market Trends Brief] Redefining LNG as a Transitional Energy Source: Balancing Utilization and Emissions Management Within Reduction Plans
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Carbon Market Trends Brief (3st Week of January 2026)
Redefining LNG as a Transitional Energy Source: Balancing Utilization and Emissions Management Within Reduction Plans
• Reaffirmation of LNG’s role as a transitional energy source during the carbon neutrality transition
• Verra formalizes CCS approach for LNG emissions management during the transition period
The government has made it clear that Liquified Natural Gas (LNG) power generation will be reduced over the medium to long term to meet the 2035 Nationally Determined Contribution (NDC). At the same time, Korea has recently committed to importing a large volume of LNG under a trade agreement with the United States, signaling a pragmatic policy choice to manage LNG not as solution to carbon neutrality, but as a transitional and supplementary energy source. This approach is also reflected in the Korean Green Taxonomy, which classifies LNG not as a “green” activity but as a “transitional economic activity.”
Globally, efforts to manage emissions under the assumption of continued transitional LNG use are becoming more concrete. As electricity demand surges due to data center expansion major tech companies are securing long-term gas and power purchase agreements while simultaneously considering the adoption of Carbon Capture and Storage (CCS). In line with this trend, Verra has approved a CCS methodology that enables the capture and storage of unavoidable emissions from natural gas processing. This represents not a justification for continued LNG use, but an approach focused on managing emissions during the transition rather than leaving them unaddressed.
Recognition of LNG’s Transitional Role in the Carbon Neutrality Pathway
To achieve the 2035 NDC, the government plans to reduce the share of LNG power generation over the medium to long term. The share of natural gas in power generation is expected to decline from 26.8% in 2023 to 10.6% by 2038. At the same time, Korea has recently pledged to import approximately USD 100 billion worth of U.S. LNG, oil, and other energy resources under a trade agreement. While these moves may appear contradictory, they can be interpreted as a policy decision to manage LNG not as a final solution to carbon neutrality, but as a transitional energy source. The Minister of Climate, Energy and Environment also emphasized LNG’s role as a supplementary and emergency power source to address the intermittency of renewable of renewable energy in an interview with the Associated Press. This direction is further clarified in the revised Korean Green Taxonomy, which classifies LNG as a “transitional economic activity” rather than a “green” activity.
Verra Approves CCS Methodology in Response to Continued LNG Use During the Transition
From a global perspective, approaches to managing emissions under the assumption of transitional LNG use are becoming increasingly tangible. In particular, as electricity demand rises sharply due to data center expansion, global big tech companies are entering into long-term gas supply and power purchase agreements to ensure power system stability, while simultaneously exploring CCS as a means to manage LNG-related emissions. Against this backdrop, Verra has approved a new methodology that allows CCS projects capturing and storing unavoidable CO2 emissions from natural gas processing to be included in the voluntary carbon market. This approach positions CCS not as a means to extend gas use, but as a pragmatic option for managing unavoidable process emissions during the transition. It reframes the issue not as whether LNG should be labeled “green”, but whether emissions should be left unmanaged or actively reduced.
Implications
• LNG is being redefined as both a “phase-down target” and a “managed asset” in the carbon neutrality transition
While LNG power generation is set to decline along the NDC pathway, its transitional role is being explicitly acknowledged due to energy security concerns and renewable energy’s intermittency. This does not imply an expansion of LNG as a long-term solution, but rather a shift in policy focus toward how residual use should be managed along the decarbonization pathway.
• Verra’s approval of a natural gas processing CCS methodology brings transitional emissions into the scope of voluntary carbon market discussions.
By defining unavoidable CO2 emissions from natural gas processing as potentially creditable, Verra’s approach signals that emissions management associated with transitional LNG use is no longer excluded from voluntary carbon market debates. This suggests a possible expansion of Voluntary Carbon Market(VCM) discussions toward how transitional industrial emissions should be addressed during the path to net zero.
Related Articles & References
2) 외신 "한국 탄소중립 정책 강화해 LNG수입 줄인다, 미국과 무역합의 지키지 못할 수도"
3) 녹색분류체계 개정으로 본 LNG의 위치… 전환금융 도입이 분수령
4) Carbon Capture To Bridge The Gap Between Natural Gas And Carbon Markets
5) Why Verra Supports Carbon Capture from Natural Gas Processing
