BD’s growing reliance on LNG an economic, env risk: Study

The growing reliance on liquefied natural gas (LNG) in Bangladesh, traded through Japan, is exposing the country to long-term economic and environmental risks, including exposure to volatile global energy markets and rising greenhouse gas emissions.
A new analysis conducted by international research group Zero Carbon Analytics (ZCA) found this on Tuesday, June 16, 2026.

Over the past five years, these LNG flows have generated emissions equivalent to those produced by about 17 coal-fired power plants operating for one year, according to the study released on Tuesday from London.

According to ZCA, between 2020 and 2025, Japan resold around 16.5 billion kilograms of US-produced LNG to nine Asian countries- Bangladesh, India, Pakistan, China, South Korea, Taiwan, Thailand, Singapore and Malaysia. 

Across the full supply chain- from extraction and liquefaction in the United States to shipping, re-gasification and combustion in power plants, the fuel generated an estimated 63.5 billion kilograms of carbon dioxide emissions.

The findings come as Bangladesh continues to expand LNG imports and deepen energy cooperation with Japan to meet rising electricity demand, particularly during periods of fuel and price volatility in global markets.

The analysis shows Japan has emerged as a major global LNG trading hub. Since 2021, it has consistently resold more US LNG to foreign buyers than it has imported for domestic consumption. Between 2021 and 2025, Japan’s LNG resales exceeded its domestic use by about 77 per cent.

Researchers warn that this growing trade structure could further entrench fossil fuel dependence across Asia at a time when countries are under increasing pressure to cut emissions and accelerate renewable energy deployment.

Khondaker Golam Moazzem, Research Director at the Centre for Policy Dialogue (CPD), said Japan has become a key driver of LNG expansion in Bangladesh through fuel supply arrangements, infrastructure investment and broader economic cooperation.

“During the recent Middle East crisis, Bangladesh’s energy security came under severe pressure, prompting the country to seek financial support from development partners, including Japan,” he said. “Under the Bangladesh-Japan Economic Partnership Agreement signed in February this year, Bangladesh has agreed to import LNG from Japan duty-free. Japanese companies are also showing growing interest in the country’s energy sector.”

He cautioned that such developments are likely to focus heavily on LNG infrastructure, which could deepen Bangladesh’s dependence on imported fossil fuels and increase debt pressures over time.

The report comes at a time of rising LNG prices driven by geopolitical tensions in the Middle East, adding further strain on energy-importing Asian economies.

LNG is primarily composed of methane, a greenhouse gas significantly more potent than carbon dioxide over a 20-year period. The analysis estimates that around 30 percent of total emissions across the LNG supply chain come from methane leaks during production, processing and transportation.

In its 2026 Global Methane Tracker, the International Energy Agency (IEA) said methane emissions from fossil fuels remain close to record highs, while stressing that cutting methane leaks is one of the fastest ways to improve both climate outcomes and energy security.
Yu Sun Chin, Asia regional researcher at ZCA, said Asia is now absorbing roughly one-third of Japan’s surplus LNG exports.

“Our calculations of full lifecycle emissions show that LNG resales pose a significant risk for a region already highly vulnerable to extreme weather and climate impacts,” she said.
She added that shifting away from fossil gas toward renewable energy offers a more secure and sustainable energy pathway for Asia.

Energy analysts also cautioned that continued investment in LNG infrastructure could lock developing economies into long-term financial and energy risks.
Sam Reynolds, Asia LNG research lead at the Institute for Energy Economics and Financial Analysis (IEEFA), said Japanese firms are increasingly seeking overseas buyers as domestic demand declines.

“This strategy risks locking developing countries into expensive and volatile fuel dependence for decades, while slowing the transition to renewable energy,” he said.
The report warns that expanding LNG infrastructure across Asia could undermine global efforts to limit warming to 1.5 degrees Celsius, a threshold scientists say is critical to avoiding the most severe impacts of climate change.

For climate-vulnerable countries like Bangladesh, the findings raise renewed questions about how to balance immediate energy security needs with long-term sustainability and economic resilience.

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