Digital Natural Gas: Enabling Transparency in Global Energy Supply Chains

Demand for natural gas worldwide is increasing in parallel with increasing demand in European and potentially some Asian markets for transparency into the origin, transit path, abatement controls, and the emission intensity profile of imported gas. Upstream producers and mid-stream operators in the U.S. and Canada who are part of LNG supply chains will also be part of the data chain that exporters and importers will need for their compliance reporting.

Fiùtur’s digital fuels registry has been in operation since 2021, created to reliably track and tokenize the environmental attributes of gas, oil, and other energy fuels across complex supply chains beginning with verified production data. It provides a proven solution for compliance with performance standards directed at LNG imports, with an interoperable platform for energy producers to differentiate their natural gas through standardized contracts - for utilities, industrial consumers, and financial institutions focused on the environmental efficiency of their feedstocks and investments.

Digital Natural Gas

In 2021 our team launched the Digital Fuels Registry and Digital Natural Gas^TM with the following objectives:

• Enable differentiation of previously undifferentiated energy fuels and other commodities in established energy and commodity markets
• Establish a secure, transparent system to register and transact the environmental attributes of natural gas and other energy fuels that eliminates risk of double counting
• Integrate advanced technologies including distributed ledgers and smart contracts with advanced monitoring, reporting, and verification (MRV) systems to create an end-to-end “digital supply chain” of high-quality environmental performance data

Digital Natural Gas (DNG) is an immutable digital record representing the provenance and environmental attributes of a specific production unit of natural gas beginning with primary production data at the wellhead.

As illustrated in Figure 2, Digital Natural Gas assets are an integration of continuously metered operations data, supplemental environmental data (e.g., ground-level cameras, drones, satellites), third-party certifications, and advanced analytics and modelling. High quality data is captured from multiple monitoring systems and verified to substantiate environmental claims associated with physical natural gas. Bottom up/top-down reconciliations and methane emission intensities are calculated in conformance with industry best practices and protocols, such as Level 4 and Level 5 reporting under OGMP2.0. [1]

For each volume of gas produced and aggregated, Fiùtur registers emission profiles and unique IDs for each facility and corresponding supply chain in an immutable, digital provenance chain, referenced on a retirement certificate providing a forensic trail to the environmental attributes (Figure 3). Each data partner (e.g., natural gas producer, midstream operator, data refinery, monitoring system, buyer) operates according to a consistent set of APIs, enabling visibility for permissioned participants, including the registry operator or third-party auditors. These certificates are being used by U.S. and Canadian gas producers to establish baselines, document Scope 1 emissions, create market differentiation, and track progress in meeting reduction targets. 

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Early Adoption

The digital fuels registry was an outgrowth of our team’s early designs at Xpansiv for an interconnected market of digital instruments representing GHG emissions and other attributes of physical commodities. [2] The initial focus was to incentivize production of natural gas with reduced methane emissions against an established benchmark, reflected in daily price assessments published by S&P Global. [3] Since program inception, approximately 500 bcf of North America production has been registered as DNG assets from over 500 producing wells in the U.S. and Canada, enabling producers, marketers, utilities, and financial institutions define, record and transact the environmental attributes of natural gas using a standardized data governance framework.

In 2023, Fiùtur spun out of Xpansiv with a focus on supporting banks and other financial institutions to access reliable, empirical data to monitor environmental performance of their investments, e.g., data centers, manufacturing facilities, LNG cargoes. To help meet this goal, Fiùtur has continued to operate and extend the digital fuels registry as part of a broader set of data intelligence solutions for capital markets. 

Digital LNG

Since we began building the DNG program in 2019, there have been major advances in MRV and quantification protocols, high quality reporting frameworks (e.g., ONE Future, GTI Veritas), high resolution satellite systems, monitoring and modelling systems (e.g., Xplorobot, Qube, LongPath), data intelligence (e.g., Highwood Emissions Management, Project Canary, Carbon AI), and standardized gas contracting (e.g., North American Energy Standards Board, NAESB). In parallel, regulatory implementation at sub-national and national levels in the U.S. and other countries have resulted in improvements in leak detection and repair, venting and flaring practices, and comprehensive reporting and verification systems.

Fiùtur and our partners are incorporating these advances in expanding the digital fuels registry and the DNG program. For example, in anticipation of increasing demand for LNG emission tracking that encompasses transport to and processing at liquefaction facilities, shipping, and re-gasification, Fiùtur has expanded the assessment boundary and product specifications to register “Digital LNG” (D-LNG) assets to be tracked across LNG gas pathways.

For LNG exporters to Europe, and potentially Japan and Korea, MRV systems will be required to ensure accurate and timely disclosures to access critical markets. Some exporters and upstream suppliers may require operational changes equivalent to EU producers. Compliance with these requirements will likely be used by the European Commission to promote long-term contracts with “reliable” and “trusted” LNG suppliers to promote EU purchasing power. [4]

Connecting to Markets: Tokenization, Smart Contracts, Trace-and-Claim

All digital evidence underpinning the lifecycle emission profile of a physical unit of production such as data inputs, emission factors, quantification algorithms, 3rd party verifications and certifications, are encrypted into the DNG and D-LNG units. These are aggregated into tokens backed by an auditable record of calculations recorded on Fiùtur’s immutable ledger platform, allowing near real-time tracking of processes and standardized data reporting for integration with physical gas settlement systems and external blockchains and registries.

Banks and their clients can obtain trustworthy, actionable information and track verifiable claims regarding the environmental performance of physical assets in a standardized format. In addition to banks, the Fiùtur platform provides the common trust architecture that can be used for trace-and-claim data accountability to meet the performance-based import standard in the EU Methane Regulation, as described in a recent paper from the Clean Air Task Force. [5] The same functionality can be used to coordinate more transparent LNG supply chains into Asia, more efficient, “pipeline” gas contracts and investments in domestic markets, and more broadly, supporting trade-based domestic/regional policies seeking to decarbonize energy systems while ensuring competitiveness of industries in the global economy.

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^[1] The Oil & Gas Methane Partnership 2.0 is the flagship oil and gas reporting and mitigation program of the United Nations Environment Programme.

^[2] “Blockchain and Emerging Digital Technologies for Enhancing Post-2020 Climate Markets”, for the World Bank (2018); “A Common Data Ontology for the World’s Oldest Market” (2019); Cohen and Madden (2020) “Digital Carbon Removal Assets for Global Markets”.

^[3] https://commodityinsights.spglobal.com/methane-price-certificates.html

^[4] Action Plan for Affordable Energy: Unlocking the true value of our European Union to secure affordable, efficient, and clean energy for all Europeans. European Commission, February 26, 2025.

^[5] “Harnessing Data-Driven Accountability: How ‘Following the Money’ Can Track Fossil Fuels Across the Supply Chain”, Clean Air Task Force. February 25, 2025.