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IEEFA Update: Global methane pledge needs action, not transition

November 05, 2021
Bruce Robertson

This week our friends and allies, the U.S. and European Union and partners, formally launched the Global Methane pledge, an initiative to reduce global methane emissions.

In all, more than 100 countries representing 70% of the global economy and nearly half of anthropogenic methane emissions have now signed the pledge.

The global methane pledge commits signatories to reduce global methane emissions by at least 30% from 2020 levels by 2030.

Methane is a powerful greenhouse gas and is worse for the climate than coal over the short term. It is more than 80 times more powerful than CO2 on a 20-year view. Methane is the principal component of what is branded “natural gas”.

Far from declining, during 2020 methane emissions grew at the fastest rate in 40 years

Twenty years is the critical timeframe for reaching the Paris Agreement target of halting temperature rises to less than 1.5 degrees C, a trajectory the world is sorely missing at the moment.

Methane emission reduction is vital to curbing the worst effects of climate change. It makes up at least one-quarter of all greenhouse gases.

Methane from the oil and gas supply chain accounts for 23% of emissions, while coal mining accounts for 12%.

Far from declining, during 2020 methane emissions grew at the fastest rate since records began in 1982, despite it being a COVID-19 recession-affected year.

Since 1990, methane emissions have grown by a considerable 25%. It is little wonder a global methane pledge has become a necessity.

This year, it is expected that methane emissions will continue to rise at an even faster rate as the production of the highest fossil fuel emitters — oil, gas and coal — has recovered.

Global Methane Emissions Are Growing Strongly

Source: Earth System Research Laboratory


The easy road to reducing methane emissions by 30% by 2030

“Cutting methane emissions is the best way to slow climate change over the next 25 years.” 
Inger Andersen, Executive Director, UNEP

It is highly unlikely that signatories have already created detailed roadmaps on how they will reduce methane emissions by 30% by 2030 as the global methane pledge dictates.

There are however some easy-to-implement measures they could use that will quickly reduce methane (or as it is commonly called, “natural gas”) consumption and hence emissions.

In many countries, it is now cheaper to heat a home with renewable electricity and more efficient to heat hot water with a heat pump and cook with an induction cooktop.

Some governments have already implemented programs to encourage a switch of energy that will result in reduced methane emissions.

The U.S. for example has implemented a methane leak fee on gas that doesn’t reach the customer, of up to US$1500/tonne. This will encourage the gas industry to clean up their business, reduce venting and fix municipal and supply chain gas leaks.

The U.S. has a methane leak fee on gas that doesn’t reach the consumer, a ‘polluter pays’ fee

Essentially, the U.S. has recognised that to meet its climate change commitments, it has to tackle the methane issue. The U.S. gas industry has struggled to secure capital in recent years and has been unprofitable for most of the past decade.

The methane leakage fee is a “polluter pays” fee. It will have little effect on the economics of gas in the U.S. as gas prices have risen so strongly that it will be comfortably absorbed.

With pre-existing technology, a 75% reduction in methane from the oil and gas sector is possible; 50% of this could be done at zero net cost.

Using basic measures, signatories could comfortably achieve the global methane pledge.

Methane – or gas – cannot be a transition fuel any longer, anywhere in the world

As IEEFA has previously noted, methane is a significant danger to the climate and governments are only just waking up to its powerful effects, especially in light of the need to reduce emissions in the necessary short 2030 timeframe.

Over the years, governments around the world have fallen for the marketing line run by the gas industry that gas is a “transition” or “bridge” fuel. It is not. Taking the full lifecycle into account, gas is a high-emitting fuel.

The Top Six Global Emitters of Methane

Country Methane Emissions 2020 (MMTCO2e) Percentage of Global Emissions
China 1490 17.9
Russia 852 10.3
U.S. 686 8.3
India 559 6.7
Brazil 402 4.8
Indonesia 245 3.0
Total Global Methane Emissions 8301 100

Source: Global Methane Initiative

China, Russia and India are among the top six global emitters of methane. Clearly their non-participation in the pledge to reduce methane is not helpful.

China is the world’s largest methane emitter. It is expanding the use of all fuels – including renewable energy – as it rapidly develops.

Russia is a massive “natural gas” producer and, via the Power of Siberia pipeline, major supplier to Europe –and increasingly to China. As such, gas is a major foreign exchange earner for Russia, and the methane pledge rubs up against its historically weak climate change commitments.

As a fast developing nation, India has clearly defined targets to produce 450 gigawatts (GW) of renewable energy by 2030. Despite its rapidly growing renewables investments, India sees gas as a lower emitting fuel. Gas has less particulate pollution and is a relatively cleaner burning fuel compared to coal, wood or dung, but it is not clean on a lifecycle basis due to venting, flaring and gas leaks across the supply chain.

Australia, the world’s biggest exporter of LNG, did not sign the pledge and is pushing a ‘gas-fired recovery’

Australia, the world’s biggest exporter of LNG, also didn’t participate in the methane reduction pledge. Instead, the Australian Government is continuing to push through a “gas-fired recovery” post COVID-19, heavily subsidising companies in the production of gas and LNG and attempting to open up new gas fields in almost every state and territory. Instead of reducing emissions, the Government wants to see the gas industry – and emissions – grow.

That a major methane emitter — the U.S. — has signed up and led the initiative along with Europe is very positive, as is the inclusion of top emitters Brazil and Indonesia. Three of the top six emitters have signed the pledge, which is a great way to begin.

As with all pledges, they start with a few interested countries. We expect membership of the methane pledge to gather momentum over time, and in-country strategies to develop to move out of oil and gas extraction.

Bruce Robertson is an LNG/gas analyst with the Institute for Energy Economics and Financial Analysis (IEEFA)

This article was first published in Renew Economy

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Bruce Robertson

Bruce Robertson has been an investment analyst, fund manager and professional investor for over 36 years. He has worked with Perpetual Trustees, UBS, Nippon Life Insurance and BT. He has appeared as an expert witness before a number of government enquiries into energy issues.

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