IEA (2022), Global Methane Tracker 2022, IEA, Paris https://www.iea.org/reports/global-methane-tracker-2022, License: CC BY 4.0
Strategies to reduce emissions from fossil fuel operations
Fossil fuel operations account for more than one-third of human-caused methane emissions. These emissions represent one of the best near-term opportunities for climate action because the pathways for reducing them are known and understood. Achieving a 75% reduction in emissions from fossil fuel operations, as set out in the IEA’s Net Zero Emissions by 2050 Scenario would take the world most of the way towards fulfilling the Global Methane Pledge.
Countries that have joined the Global Methane Pledge currently account for over 45% of total human-caused methane and for about one third of methane from fossil fuel operations. Even if these countries take every available step to reduce emissions within their borders, it would still not deliver a 30% reduction in global emissions by 2030. Forward-leaning countries need to capitalise on the momentum created by the Global Methane Pledge to bring new members to the coalition
Methane emissions from energy from Global Methane Pledge participants and non-participants, 2021Open
The methane emissions intensity of oil and gas operations varies greatly across countries, with the best performing countries having an emission intensity over 100 times lower than the worst performers. High emission intensities from oil and gas operations are not inevitable; they are an “above-ground issue” that can be addressed cost-effectively through a well-established combination of high operational standards, firm policy action and technology deployment.
Total methane emissions and methane intensity of production in selected oil and gas producers, 2021Open
The technologies and measures to prevent methane emissions from oil and gas operations include leak detection and repair campaigns, installing emissions control devices, and replacing components and devices that emit methane in their normal operations.
The cost effectiveness of abatement measures vary by country, depending on the prevailing emissions sources, capital and labour costs, and natural gas prices. We estimate that it is technically possible to avoid over 70% of today’s methane emissions from global oil and gas operations. Based on average natural gas prices over the past five years, over 40% of methane emissions from oil and gas operations could be avoided at no net cost as the outlays for the abatement measures are less than the market value of the additional gas that is captured. Based on the elevated natural gas prices seen in 2021, almost all of the options to reduce emissions from oil and gas operations worldwide could be implemented at no net cost.
Marginal abatement cost curve for oil and gas-related methane emissions by mitigation measure, 2021Open
As outlined in Curtailing Methane Emissions from Fossil Fuel Operations, a range of well-established policy and regulatory tools exist to help countries create the right incentives. These “tried and tested” policies include leak detection and repair requirements, equipment mandates and measures designed to limit non-emergency flaring and venting. Adopting these policies globally would reduce emissions from oil and gas emissions by half.
There are additional available policies available that would result in the full adoption of all technically feasible abatement options and lead to a 70% reduction in methane emissions from oil and gas operations. These include emissions pricing, financing instruments, and performance standards that would need to be supported by robust measurement-based monitoring regimes.
Several countries have adopted elements of these tried and tested policies, but no country has adopted all of them. Even early movers on methane regulation need to redouble their efforts to reach their full abatement potential. In parallel, these countries can support others by providing technical assistance and support, especially for countries that may be considering methane emissions for the first time.
The IEA’s Policies Database brings together more than 350 examples of policies that can directly or indirectly support methane abatement. Building on these examples, the IEA has prepared a detailed “how-to" guide for policy makers looking to develop new methane policies and regulations. This Regulatory Roadmap and Toolkit collects the experience of regulators around the world and can serve as a blueprint to support further technical assistance and capacity building efforts.
Much fossil fuel production takes place in countries that have not joined the Global Methane Pledge, yet around 40% of their oil and gas production is exported to countries that joined the Pledge.
These importers can encourage reductions from their trading partners through a mix of actions, including diplomatic pressure, incentives, technical and institutional support, and trade measures. Examples include financing instruments, emissions certificates, price premiums for lower intensity gas, minimum intensity standards and border adjustment mechanisms. Efforts are more likely to be effective if paired with technical and institutional support to enhance regulatory capacity and mitigate distributional impacts. If countries with strong methane commitments enrol their trading partners, this could reduce global emissions from oil and gas operations by more than 10 Mt, boosting the reductions that could be achieved through domestic action alone by around 50%.
Efforts to improve transparency in emissions data could be particularly effective at bringing in new partners while simultaneously improving our understanding of emissions. The European Union has committed to several efforts to improve the transparency of emissions data, including funding the International Methane Emissions Observatory, actively supporting the Oil and Gas Methane Partnership 2.0, and proposing to collect and make public information collected from operators and importers under its recently proposed methane regulations. These measures may encourage the uptake of measurement and reporting standards and help companies and countries identify abatement opportunities.
Satellite technology in particular has the potential to drive significant reductions. Existing satellites and processing technologies can already detect and quantify large leaks over a wide geographic area. Governments and companies should explore establishing transparent systems to efficiently alert regulators, operators and other stakeholders to large leaks as soon as they are detected. This would require creating a network of contacts to allow rapid communication of leaks to those on the ground best able to address them. Based on current instruments and capabilities, we estimate that such a system could already avoid close to 3 Mt of methane emissions associated with large emissions events each year. Private companies and industry groups may also look to establish similar dedicated networks of monitoring devices covering their facilities to rapidly accelerate their responses to leaks.
Along with actions by governments, the industry and investment community have important roles to play in driving rapid cuts and furthering abatement efforts. Companies can often move more quickly than governments, particularly where regulatory capacity is limited; companies are also closer to the problem at hand and have the required technical capabilities to manage methane emissions. Investors and financiers can play an important role by sending clear signals that good performers will be rewarded, as well as working with companies to set targets and hold them to account.
A number of oil and gas companies have already set targets to limit emissions, or reduce their emissions intensity. There are many voluntary, industry-led initiatives including the Methane Guiding Principles, the Oil and Gas Climate Initiative, the Oil and Gas Methane Partnership 2.0 and the China Oil and Gas Methane Alliance. Through these initiatives, companies have committed to reduce their emissions intensity over time, advocate for sound methane policy and regulation and to be more transparent about their emissions. While these initiatives are a promising step, they have so far not delivered demonstrable reductions on a wide scale. In order to drive the level of reductions needed, companies should adopt a zero tolerance approach to methane leaks from their facilities.
Tackling methane from coal operations is more challenging than for oil and gas operations. Reductions in consumption can play a major role in bringing down methane emissions but there are also significant opportunities to reduce emissions in the near term based on existing technologies.
In the IEA’s Net Zero Emissions by 2050 Scenario, coal use drops by 55% from 2020 to 2030, and by almost 90% by 2050. This decline would significantly cut methane emissions from coal mines as well as emissions of CO2 and other air pollutants; emissions reductions would be even larger if concentrated on the worst-performing coal assets. For example, removing the worst-performing quartile of production would remove around 25 Mt of methane while removing the best performing quartile would only remove about 4 Mt.
While reducing coal use would go a long way towards reducing emissions, policies and measures are still needed in the meantime to address methane leaks from coal operations. These include requirements for operators to capture methane using degasification wells and drainage boreholes prior to the start of production. For mines already in operation, ventilation air methane is often already captured. This can be used as an energy source, for example to heat mine facilities or for coal drying. These technologies have already been implemented in numerous sites, but are still far from being standard industry practice. Policies and regulatory regimes are needed to broaden their use, either by creating proper incentives or by directly mandating that mine operators adopt these technologies.