IEA’s recommendations for a voluntary near-zero intensity methane marketplace for oil and gas

1. Develop a voluntary marketplace for trading near-zero methane oil and gas by establishing a global framework to assess the upstream methane performance of oil and natural gas, leveraging existing initiatives and frameworks.

2. Base this common framework on two key indicators that reflect: (1) methane intensity; and (2) data quality. These two indicators are used to assign each asset a dual-letter grade, ranging from A to F. The two grades must be read in conjunction and disclosed together.

Methane intensity grade

3. Calculate upstream methane intensity at the asset level, covering emissions from production activities.

4. Express intensity on an energy basis, calculated as energy in emitted methane from oil and gas production activities divided by marketed oil and gas (both on a high heating value basis).

5. Define “near-zero” as an upstream methane emissions intensity below 0.1% (using the IEA’s recommended energy-based formula). An intensity below this benchmark is eligible for A and B grades.

Data quality grade

6. Develop a data quality grade that reflects the reliability of the reported emissions intensity, building on OGMP 2.0’s five reporting levels and other relevant frameworks.

7. Ensure that the dual grades are verified by an accredited independent third-party with demonstrated technical expertise. Operators that self-report emissions intensities without verification automatically receive a grade of F for data quality.

Government actions

8. Governments can support the development of the marketplace by establishing credible foundations for its operation and by incentivising both the supply of, and demand, for near-zero oil and gas. The proposed framework is designed to be interoperable with existing regulatory requirements, but participation in the marketplace is voluntary, and the nature and extent of government engagement will vary according to national priorities and circumstances.

Additional steps to support market operation

9. Establish a Working Group composed of relevant stakeholders to take forward and finalise the NZIMM framework, drawing on the recommendations set out in this report. The Working Group can refine the IEA’s proposed framework and will define the technical parameters underpinning the methane intensity and data quality grades to ensure consistent and credible application across producers.