Abatement or Reallocation? Unilateral Methane Standards in a Globally Traded Gas Market

Muntasir Shahabuddin and Chi Kong Chyong

May 2026

Natural gas is widely treated as a transitional fuel with a uniform emissions profile. We test that assumption by constructing a harmonized lifecycle dataset covering 333 gas fields across major exporting regions, comparing upstream, transport, and combustion emissions for LNG, pipeline gas, coal, and light fuel oil within consistent system boundaries. Upstream methane emissions vary by an order of magnitude, from below 20 gCO_₂e/kWh for low-intensity pipeline systems to above 200 gCO_₂e/kWh for selected high-intensity supply chains at the median. Lifecycle fuel rankings are therefore conditional on origin rather than intrinsic to fuel type. Under median assumptions and GWP100, export-facing gas does not exceed coal on a cradle-to-grave basis, although high-intensity cases narrow the margin substantially. Applying these findings to the EU Methane Regulation, we show that emissions are highly concentrated within exporting regions, implying that differentiated accountability can target high-intensity assets without wholesale regional disengagement. Large-scale diversion of displaced LNG to coal-dominated markets would require substantial price adjustments, suggesting that portfolio sorting rather than mechanical carbon leakage is the more plausible response. The results indicate that unilateral methane standards may induce selective trade reshuffling, with the climate impact depending on asset-level mitigation responses.