Methane emissions will be one of the key topics debated in Brussels this fall. Anticipating the publication of the long-awaited EU Methane Strategy, we created this piece to provide you with a basic knowledge that can help you to understand better the issue and its implications for the EU 2050 climate objectives. Among other things, we explain what methane emissions are, why they matter and how they could be reduced.
What are methane emissions and why do they matter?
Methane is the second most important greenhouse gas after carbon dioxide (CO2). In comparison to CO2, methane remains in the atmosphere for a shorter time (around one decade) but it is a much more potent Greenhouse Gas (GHG), as it attracts more heat per unit of mass than CO2.
One way to compare the environmental impact of the two gasses is by their Global Warming Potential (GWP) which, in this case, is a measurement of the heat absorbed by 1 tonne of methane over a given period of time, proportionate to the emissions of 1 ton of CO2 greenhouse. Therefore, the GWP of CO2 is always 1, while the GWP of methane is calculated as 84 in a 20-year perspective and 28 in a 100-year perspective.
Seeing the high heat-trapping potential of the gas, the abatement of methane emissions would have an immediate effect on climate. Emissions decrease would also benefit air quality, as methane contributes to the formation of ground-level ozone – an air pollutant.
A recent study calculates that the concentration of methane in the atmosphere is approximately 2.6 higher than the pre-industrial levels (1750) which ultimately contributes to 25% of the global warming that we are experiencing today.
The reduction of methane emissions is necessary to achieve both the 2050 EU climate neutrality target and the Paris Agreement objective of keeping the global temperature rise below 2 – 1.5°C – compared to pre-industrial levels.
What are the main sources of methane emissions?
The recent estimates of the Global Methane Budget show that the annual global methane emissions are around 570 million tonnes (Mt), the majority of which (nearly 60%) is the result of human activity. These emissions originate mostly in agriculture, the energy and the waste sectors.
Agriculture is responsible for contributing the largest amount of man-made emissions, both globally and at the EU level. Farm-related emissions primarily come from enteric fermentation (fermentation within the digestive systems of animals) and manure management. The energy sector follows closely in terms of emissions. Methane is mainly emitted during the extraction, transport and use of fossil fuels (oil, gas and coal). Finally, in the waste sector, landfills are the major source of emissions.
What is the role of methane emissions in the oil and gas sector?
As mentioned before, energy-related methane emissions – although lower than those coming from agriculture – are considerable in size. Specifically, the oil and gas sector is the biggest emitter of methane in the energy sector, accounting for 63% of the total methane emissions from fossil fuels (coal mining accounts for (coal mining accounts for 33%; other industries (metals, chemical), fossil fuel fires (e.g. Kuwait oil and gas fires), and transport constitute the remaining 4%).
The size of the phenomenon begs the question: what can we do about it? For one thing, a large part of fossil fuel emissions can be reduced cost-effectively with the use of existing abatement technologies.
Moreover, unlike CO2, methane has commercial value in itself – as it is the main component of natural gas – so efforts to capture methane can often be monetised. In the decades to come – and even under strong decarbonisation scenarios, such as the IEA’s Sustainable Development Scenario – natural gas is expected to continue to play a significant role in the energy system as a “transition fuel”. And this role that gas will play in the transition to a carbon-neutral energy system is heavily dependent on the industry’s ability to reduce methane emissions.
Unabated methane emissions in the sector have, in fact, the potential to question the environmental benefits of switching from oil and coal to natural gas altogether.
Even in future low-carbon energy systems, where fossil gas will be replaced by renewable and low-carbon gases (biogas, biomethane and blue hydrogen), the issue of methane emissions is likely to persist, according to the recently published EU Hydrogen Strategy.
What measures is the EU oil and gas sector undertaking to reduce methane emissions?
Currently, most actions to reduce methane emissions in the EU oil and gas sectors are voluntary. We cover three important industry initiatives.
First, the group of companies led by Gas Infrastructure Europe (GIE) and Marcogaz compiled a report investigating potential ways in which the industry can contribute to the reduction of methane emissions. This publication, constituting a first of a kind summary of industry initiatives to tackle methane emissions, was presented and discussed at the Madrid Gas Regulatory Forum in 2019.
Second, a group of companies is developing the Oil and Gas Methane Partnership (OGMP) 2.0 Reporting Framework. The companies participating in this initiative will voluntarily report emissions from their facilities annually, according to a standardised methodology. The aggregated data will be made publicly available.
Third, the Methane Guiding Principles initiative is organising training to raise awareness about the issue of methane emissions among the oil and gas companies, is sharing best practices and advocating policies and regulations to address methane emissions.
What is the EU framework to reduce methane emissions?
At this stage, there is no EU-wide regime to reduce methane emissions in place.
Methane and other GHG are regulated under the Effort Sharing framework with binding national GHG reduction targets. In contrast to the EU ETS which is regulated at the EU level under the Effort Sharing Decision, the design of concrete policies and measures regarding GHG is left up to the Member States. As a result, the Member States may choose to give priority to emissions reduction in other non-ETS sectors – such as constructions and transport – and to postpone actions on methane emissions.
This status quo may change with the publication of the EU Methane Strategy this fall. Regulation (EU) 2018/1999 on the Governance of the Energy Union, which was part of the EU Clean Energy Package, requires the European Commission to propose the EU Strategic plan for methane (art. 16). This strategic plan will become an integral part of the EU long-term strategy aiming to reach climate-neutrality by 2050.
There are good reasons to strengthen the methane emissions framework; because of insufficient detection and monitoring, lack of action from the part of industry and impact that the EU can have on the global natural gas value chain.
What are other regions doing to reduce methane emissions?
Over the course of the last few years, more and more jurisdictions have been adopting methane policies and setting methane reduction targets. North America has been one of the most dynamic regions in this respect.
In 2016, US, Canada and Mexico set up a joint objective to reduce methane emissions in the oil and gas sector by 40-45%- from 2012 levels – by 2025, and all of them have already adopted methane-specific regulations to achieve this target. It should be noted that the US federal regulations on methane adopted in 2016 have been rolled back this year, yet methane emissions in the oil and gas sector are regulated in several US states including Colorado, Pennsylvania, and North Dakota.
The major EU natural gas suppliers – Norway and Russia – use economic instruments to reduce methane emissions in the oil and gas sector. In Norway, each tonne of methane released in the air during the oil and gas production is taxed, while in Russia an environmental charge on methane release is applied. Both instruments have been put in place in the 1990s.
If you still have questions or doubt about the topic, do not hesitate to contact one of our academic experts:
- “Satellite and other aerial measurements: a step-change in methane emission reduction?” by M. Olczak, A. Piebalgs and Ch, Jones
- “Methane emission reduction: an important step in strengthening the sustainability dimension in gas network companies” by M. Olczak, A. Piebalgs
- “Regulatory framework to mitigate methane emissions in North America: the lessons learned for Europe” by M. Olczak, A. Piebalgs
- A series of FSR webinars on satellite and other aerial measurements (June 2020)
- How important should methane emissions be in the Green Deal Strategy? (February 2020)
- Making the invisible visible | Dr. S. Hamburg & Prof. I. Aben
- Successful regulation is a result of a negotiation | Dr Robert Kleinberg
- Regulatory approaches to methane mitigation and aerial measurements | Kate Konschnik
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