Over $75 billion in cumulative spending is needed till 2030 to reduce energy-related methane emissions by 75 percent, stated the IEA's recent 'Financing Reductions in Oil and Gas Methane Emissions' report.
Ever since the Industrial Revolution, methane has been responsible for around 30 percent of the increase in global temperatures. Sustained and rapid reduction in methane emissions is key to limiting near-term global warming, the report stated. According to the IEA's scenario of achieving net-zero emission (NZE) by 2050, energy-related methane emissions will have to drop by around 75 percent — two-thirds of it comes from the decreasing emissions from gas and oil operations. This makes up for over 15 percent of the total reduction of energy-related greenhouse gas emissions till 2030.
"The energy sector accounts for nearly 40 percent of total methane emissions from human activity, and it has the largest potential for abatement in the near term. Oil and gas operations are responsible for 80 million tonnes of methane emissions and tackling these is one of the most important measures to limit near-term global warming," the report stated.
Abatement of methane in the gas and oil industry is one of the cheapest options to lessen greenhouse gas emissions in the economy. The report stated that the abatement measures would generate around $45 billion revenue from the sale of captured methane. "This means that the average cost of methane reductions to 2030 is less than $5/tonne CO2 equivalent. Even if there was no value to the captured gas, almost all available abatement measures would be cost-effective in the presence of an emissions price of around $20/tonne CO2 equivalent," the report added.
Following are the IEA's recommendations:
Oil and gas industry should take the lead: The oil and gas industry should take the lead in tackling methane emissions by adopting an approach of zero tolerance. The report mentioned that the COP28 climate change conference, which will be held in Dubai later this year, is a unique opportunity for the industry to show that it is serious regarding reducing methane emissions.
Effective methane policies and regulations: The report stated that policy makers should enforce and implement effective methane regulations and policies to incentivise early company actions. It listed options such as bans on non-emergency venting and flaring, offering targeting financial incentives, adoption of technology and equipment standards, among others.
Insurers and investors should incorporate methane abatement: The report stated that the insurers and investors should incorporate methane abatement in their engagements with the oil and gas industry, aiming to promote verifiable methane reductions, strict performance standards and transparent and comparable disclosures on measured emissions.
Fresh international efforts to fill financial gaps: The report stated that fresh international efforts are required from governments, philanthropic bodies and the industry to fill the financing gaps the report has identified, especially the $15-20-billion spending needed in low- and middle-income countries.
Financing efforts should ensure quick delivery of the most cost-effective mitigation opportunities: "More than 40 percent of the emissions reductions to 2030 in the NZE scenario can be achieved with measures that will result in overall savings given the value of the captured gas. Alongside mechanisms to detect and immediately tackle large leaks, these options include replacing pneumatics and pumps, installing recovery systems, and implementing leak detection and repair programmes," the report stated, adding that these measures need a little more than 10 percent of the total spending on methane abatement and can give quick results, laying the groundwork for further reductions.
Investing in low- and middle-income countries is vital to the solution: "Regulatory structures and frameworks for methane abatement should be created or further developed by increasing the dedicated staff, building technical knowledge and developing more robust monitoring and reporting systems," the report stated.(Edited by : Shoma Bhattacharjee)
First Published: Jul 17, 2023 6:11 PM IST
