Methane Abatement

Methane emissions are currently the second largest cause of global warming. They come from a range of anthropogenic and natural sources. In the energy sector, coal, oil and natural gas operations are responsible for around 115 Mt of emissions and nearly 5 Mt of leaks from end-use equipment. Around 10 Mt of emissions comes from the incomplete combustion of bioenergy, largely from the traditional use of biomass. Due to the near-term warming potential of methane emissions, reducing their level will be critical to avoid the worst effects of climate change.

Oil and gas operations are the largest source of methane emissions from the energy sector and there is clear potential to reduce them cost-effectively. Annual investment of around USD 15 billion would be required to mobilise all methane abatement measures in the oil and gas subsectors. Taking average natural gas prices in 2023, the annual investment required is close to the total value of the captured methane that could be sold, meaning that related methane emissions from oil and gas could be reduced by almost 75% at nearly no net cost to the global oil and gas industry.

In the Net Zero Emissions by 2050 Scenario, methane emissions decline rapidly in the coming years, fulfilling this abatement potential by 2030. This results mostly from the rapid deployment of emission reduction measures and technologies, which leads to the elimination of all technically avoidable methane emissions within this decade.

In the Net Zero Emissions by 2050 Scenario, oil and natural gas continue to comprise a large part of the overall energy mix to 2030. Natural gas can play a supporting role in the energy transition by replacing more polluting fuels. It may also deliver services that are difficult to provide cost-effectively with low-carbon alternatives, such as peak winter heating, seasonal energy storage and high-temperature heat for industry. However, fulfilling this role requires minimising adverse social and environmental impacts and immediate and major reductions in methane emissions are central to this.  

The IEA Global Methane Tracker Data Explorer tracks oil and gas methane and provides detailed country-by-country estimates of emissions, abatement technologies, costs and regulation. The intensity of methane emissions currently varies widely across countries that produce oil and gas. If all producing countries were to match the emissions intensity of Norway, the best performing country, global methane emissions from oil and gas operations would fall by more than 90%. Upstream oil and gas operations contribute more than three-quarters of total emissions globally, with the downstream segment accounting for the remaining share.

Increased attention to methane abatement in recent years, including new measurement campaigns and technologies, may be having some effect. Emissions have remained around the same level since 2019, when they reached a record high. Since fossil fuel supply has continued to expand since then, this indicates that the average methane intensity of production globally has declined marginally during this period. 

The Global Methane Pledge was launched at COP26 in November 2021 to catalyse action to reduce methane emissions. Led by the United States and the European Union, the pledge now has 155 country participants, which together are responsible for over half of human-caused global methane emissions. By joining the pledge, countries commit to work together in order to collectively reduce methane emissions by at least 30% below 2020 levels by 2030. Meeting the Global Methane Pledge target has the potential to make an enormous impact on climate change, similar to the entire global transport sector adopting net zero emission technologies.

As always with climate action, implementation is key. The pledge is non-binding and individual countries are not assigned targets. Many participants issued new policies and actions in 2023, and some countries may be able to show measurable, verifiable reductions in emissions within a few years, and their progress should be measured by demonstrable reductions. However, it may be several years before most countries can comprehensively track emission reductions with the necessary confidence. Until then, a number of actions could signal progress, such as developing national action plans or strategies, establishing policies and reduction targets aimed at methane emissions, and updating national greenhouse gas inventories and working to improve their quality.

If all countries implemented tried and tested policies that have already been used effectively in multiple settings, it would cut global methane emissions from oil and gas operations in half. Most standards in this category do not require a robust measurement-based monitoring regime to verify compliance, although a quantification and reporting system is usually necessary. Tried and tested policies include leak detection and repair requirements for fugitive sources, equipment mandates for sources known to emit significant volumes of methane, and measures designed to limit non-emergency flaring and venting.

Our broad reviews of policies and regulations reveal some success stories that other countries can look to for inspiration: The United States and Canada have both implemented tried and tested approaches, although there remains room to strengthen their requirements and expand coverage further. They are moving further in their regulatory agenda. The United States approved the Inflation Reduction Act of 2022, which provides incentives for methane mitigation and establishes a tax on oil and gas methane emissions, and finalised new regulations in December 2023 that tighten requirements on new and modified oil and gas facilities. Canada advanced new rules designed to reduce emissions from the oil and gas sector by at least 75% below 2012 levels by 2030. These new regulations tighten requirements dating from 2018, including restrictions on flaring and venting, equipment standards, and mandatory risk-based LDAR.

Other countries are making progress as well. In 2022, Nigeria issued guidelines to support the elimination of routine gas flaring by 2030 and a 60% reduction in fugitive methane emissions by 2031. Colombia became the first South American country to regulate methane emissions from its oil and gas sector, including equipment standards and leak detection and repair requirements. Norway and the Netherlands have gone the furthest towards adopting a comprehensive regime, as they have robust measurement and reporting requirements, ensure best industry practice, and have economic incentives that encourage abatement action.

The European Union announced an agreement on a new methane regulation that requires gas, oil and coal operators throughout the bloc to report regularly on their emissions for both operated and non-operated assets; carry out regular LDAR; stop routine flaring and venting; and limit non-routine venting and flaring to unavoidable circumstances. In another first, the regulation will also apply an emissions standard to imported fuels, leveraging the EU’s position as a major importer. This will require gas, oil and coal imported into the European Union under contracts concluded after January 2027 to meet requirements equivalent to those for domestic sources.

There are a large number of international methane initiatives underway that look to provide support for increased action, and more are being created each year. The IEA is engaged in or affiliated with many of these efforts, including a longstanding collaboration with the International Methane Emissions Observatory (IMEO),  an initiative that aims to improve the world’s understanding of methane emissions by commissioning measurement studies and developing a public dataset that tracks methane emissions levels and abatement efforts. IMEO also leads the Oil & Gas Methane Partnership 2.0, a measurement-based reporting framework for the oil and gas industry that aims to improves the accuracy and transparency of methane emissions reporting, as well as the Methane Alert and Response System, which uses satellites to detect major methane emission events and then alerts the country where it is occurring and the involved operators or company. 

In parallel with government action, industry initiatives have an important role in driving rapid cuts and leading abatement efforts. In certain countries, companies may be able to implement emission reductions more quickly than governments, particularly where regulatory capacity is limited. Multiple international oil companies have set targets to restrict emissions or the emissions intensity of production, and many voluntary, industry-led efforts are attempting to reduce methane emissions from oil and gas operations: 

• The Oil and Gas Decarbonization Charter launched at COP28 is an industry initiative focussed on climate action across the oil and gas sector. A total of 52 companies have joined and they aim to achieve net zero scope 1 and 2 greenhouse gas emissions from their operations by 2050 at the latest, to end routine flaring by 2030, and to achieve near-zero upstream methane emissions by 2030.
• The Methane Guiding Principles aim to advance understanding and best practices to reduce methane emissions, and to support the development of sound methane policies and regulations.
• The Oil and Gas Climate Initiative launched the Aiming for Zero Methane Emissions Initiative, which aims for companies to have zero methane emissions from their operations by 2030. It calls for an all-in approach that treats methane emissions as seriously as the industry already treats safety.
• The China Oil and Gas Methane Alliance aims to build a platform in the country for technical experience-sharing and co‑operation to improve methane emissions control and engage with climate governance.