Methane Emissions
Methane, a dangerous air pollutant and greenhouse gas, is a major contributor to the formation of ground-level ozone. Since pre-industrial times, methane has been responsible for roughly 30% of global warming and is proliferating faster than at any other time since record-keeping began in the 1980s. The concentration of methane in the atmosphere is now over 2.5 times greater than pre-industrial levels.
Methane is a potent greenhouse gas, being 80 times more effective at warming the atmosphere than carbon dioxide over a 20-year period. Methane emissions result in approximately 1 million premature deaths annually. Hence, Rapid and sustained cuts in emissions from the energy sector are imperative to limit global warming to 1.5 °C.
Sources of Methane Emissions
The latest comprehensive assessment from the Global Methane Budget indicates that annual global methane emissions are approximately 580 Mt. This figure includes emissions from natural sources (about 40% of the total) and human activities (about 60% of the total). While the agricultural sector is the biggest contributor to natural methane emissions, the energy sector holds the same position for man-made emissions.
In 2023, the energy sector was responsible for nearly 130 Mt of methane emissions, representing over one-third of the total emissions from human activities. Methane emissions from fossil fuel operations occur throughout the supply chain. Oil operations account for approximately 50 Mt, while the natural gas supply chain emits just under 30 Mt. An additional 1 Mt leaks from end-use equipment. Coal contributes another 40 Mt, primarily from underground mines (25 Mt). Additionally, 10 Mt comes from the incomplete combustion of bioenergy, mainly from the traditional use of biomass.
Focus on the fossil fuel industry
During COP28, over 50 oil and gas companies launched the Oil and Gas Decarbonization Charter (OGDC) to accelerate emissions reductions within the industry, and new countries joined the Global Methane Pledge. Substantial new policies and regulations on methane were also established or announced in 2023, including by the United States, Canada, and the European Union and China published an action plan dedicated to methane emission control.
However, despite these pledges and commitments, many companies have been slow to implement methane reduction measures, even the cost-effective ones.
Emission Abatement Scenario in the fossil fuel Industry
Reducing methane emissions in the fossil fuel industry is a prospect with extremely practical and cost-effective solutions. The technologies and strategies to mitigate these emissions are well-established and have been successfully implemented worldwide. In 2023, roughly 40% of the 120 Mt of methane emissions from fossil fuels could be reduced at no net cost, as the cost of abatement measures is less than the market value of the captured methane gas. This cost-free abatement potential is higher for oil and natural gas operations (50%) compared to coal (15%).
However, the companies have been lax at investing in and implementing emission reduction measures, despite their cost-effectiveness. One explanation could be that the return on investment for methane abatement projects may be longer than other investment opportunities. Around USD 170 billion in spending is needed to deliver the methane abatement measures to ensure emission reduction by 75% by 2030 (1.50C pathway). This includes around USD 100 billion of spending in the oil and gas sector and USD 70 billion in the coal industry.
Additionally, there may be a lack of awareness about the scale of methane emissions and the cost-effectiveness of abatement. In some cases, inadequate infrastructure or institutional arrangements make it difficult for companies to receive income from avoided emissions.
Roadmap to Net Zero
If all methane policies and pledges made by countries and companies to date are implemented and achieved in full and on time, methane emissions from fossil fuels would decline by around 50% by 2030 against a requirement of 75% for containing the temperature rise to 1.50C. Additionally, These pledges are not yet backed up by detailed plans, policies, and regulations. Hence, major realignment is rquired at policy level to ensure fulfilment of global climate goals. The next round of updated Nationally Determined Contributions (NDCs) under the Paris Agreement, where countries will establish climate goals through 2035, offers a significant opportunity for governments to set more ambitious targets for reducing energy-related methane emissions and outline strategies to achieve these goals.
Companies, for their part, should start investing in cost-effective solutions immediately. Additionally, Fossil fuel companies should carry the primary responsibility for financing these abatement measures, given that the amount of spending needed represents less than 5% of the income the industry generated in 2023.
Moreover, Better and more transparent ways of measuring methane emissions should be created. Little or no measurement-based data is used to report emissions in most parts of the world – which is an issue since measured emissions tend to be higher than reported emissions. For instance, if companies reporting emissions to UNEP’s Oil & Gas Methane Partnership 2.0 were taken as factual , it would suggest that global oil and gas methane emissions in 2023 were about 5 Mt, which is 95% lower than independent estimates. Various factors could account for these significant discrepancies, but they will only be resolved through more systematic and transparent use of measured data.
These measures and guidelines, which encompass various aspects of the emissions reduction journey, if implemented, would prove to be crucial in ridding the globe of one of the major proponents of global warming and mitigating its adverse effects on the environment and human health.