IEA (2020), Methane Tracker 2020, IEA, Paris https://www.iea.org/reports/methane-tracker-2020, License: CC BY 4.0
Voluntary industry-led initiatives have been a positive first step in addressing methane emissions across the oil and natural gas value chain. However, there remain significant obstacles that make it less likely that companies will undertake the abatement actions consistent with the Sustainable Development Scenario, including those that our analysis finds could be put in place at no net cost.
The primary categories of obstacles to action are a lack of proper information, adequate infrastructure, and investment signals. Governments have an important role in overcoming these barriers and ensuring that companies have the right tools and incentives to carry out methane abatement actions. Industry and other stakeholders have recognised the role for policy and regulation and are working with governments to bolster actions in this area.
We have begun a review of existing regulatory instruments, including those motivated by Paris climate commitments as well as regulations indirectly limiting methane emissions from safety, public health, or natural resource conservation perspectives. From this review, we will identify important trends and lessons learned for regulators considering future action.
Existing regulatory instruments take many forms and reflect different approaches to the problem. They include prescriptive requirements to replace or meet emission standards for specific pieces of equipment, performance-based standards that set broader emissions limits across facilities or industry segments, and market-based instruments that price carbon or otherwise internalise the cost of methane emissions. Specific examples of regulatory instruments following these different approaches can be found on the methane abatement page. In addition to these categories of instruments, there are common elements to most regulatory approaches, such as mandatory recordkeeping and reporting requirements, as well as inspections and enforcement.
Although there are a number of examples already in place, existing regulations do not capture the full range of what is possible. Some governments are adapting existing approaches or coming up with entirely new strategies to meet their particular circumstances and goals. These include innovative regulatory schemes based on direct requirements, such as a low methane import standard. Alternatively, programmes like “green” certifications or carbon offset programs could incentivise more ambitious action.
Existing government policies are important initiatives, but more needs to be done. Many jurisdictions responsible for significant emissions have not yet taken action, and significant gaps remain even in those jurisdictions that have adopted some regulatory measures.
The IEA policies database provides a platform for stakeholders and decision-makers to access country-specific policy and regulatory tools across the entire energy sector. We have updated the database to include entries for methane regulatory measures. The database includes criteria for classifying and comparing regulatory aspects across jurisdictions and sectors. For example, entries are tagged by type of regulatory instrument, industry segments covered, and presence of technology-specific requirements.
The entries in the database currently focus on a subset of jurisdictions with regulations pertaining to methane. Through future efforts on this issue, and as additional regulatory efforts emerge, the database will be expanded to have greater global coverage.
In addition to building out the database, the IEA is developing a series of regulatory case studies, the first of which, covering the Canadian oil and gas methane rule, was released in February 2020. These analyses highlight creative features, gaps in coverage, and “lessons learned” for jurisdictions considering action. Further work will help identify key decision points that decision makers may use in developing methane regulation.