2Celsius
"A podcast 2 degrees Celsius hotter" (2C) is a Brussels-based enterprise that brings about hot dialogues about everything climate. The episodes are made and edited by Francesca Fazey and Raul Cazan while the whole product is supported by Association 2Celsius (2Celsius.org).
2Celsius
METHANE. Mitigation: How Do You Solve a Problem like Methane?
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So if methane is this big a problem, what tools do we have, and are we using, to solve it? The first global agreement that methane was a problem came in the form of the Global Methane Pledge announced at COP26 at Glasgow in 2021. What’s happened since then, especially in the industry with the easiest to abate emissions: oil and gas?
We look at the International Methane Emissions Observatory, the Oil and Gas Methane Partnership, the new EU regulation on methane and proposals for financial instruments to help bring emissions down.
Host:
The show is presented by: Francesca Fazey
Affiliation:
The show is brought to you by: The 2Celsius Association
Resource List:
1. Environmental Investigation Agency (EIA)
2. International Methane Emissions Observatory (IMEO)
3. International Energy Agency (IEA)
5. United Nations Global Methane Pledge
6. Rocky Mountain Institute Climate Program
7. Oxford Institute for Energy Studies
9. Greenhouse Gas Laboratory, University of Royal Holloway
10. Romanian Methane Emissions from Oil and Gas
Laboratory of Climate and Environmental Sciences, Paris
11. University of Alaska Fairbanks, Fairbanks, USA
12. NASA Goddard Space Flight Centre, Washington DC, USA
Contributors:
Raul Cazan, Founder of The 2Celsius Association, Bucharest, Romania
Kim O’Dowd, Campaigner at The Environmental Investigation Agency, London, UK
Dr Roland Kupers, Global Advisor to the United Nations Environment Programme’s International Methane Emissions Observatory, Amsterdam, The Netherlands
Deborah Gordon, Senior Fellow, Watson Institute for International and Public Affairs, Brown University; Senior Principal at the Rocky Mountain Institute (RMI) Climate Program, Washington DC, USA
Dr Philippe Ciais, Associate Director, Institut Pierre-Simon Laplace (IPSL), Paris, France
Théophile Humann-Guilleminot, Campaign Manager, Clean Air Task Force ,Athens Greece
Dr Dave Lowry, Reader: Stable Isotope and Greenhouse Gas, Department of Earth Sciences, University of Royal Holloway, London UK
Dr Rebecca Fisher: Reader: Atmospheric Methane, Department of Earth Sciences, University of Royal Holloway, London UK
Dr Thoman Roeckmann, Professor of Atmospheric Physics and Chemistry, Utrecht University, The Netherlands
Professor Jonathan Stern, Distinguished Research Fellow, The Oxford Institute for Energy Studies, Oxford, UK
Melanie Kenderdine, Principal, Energy Futures Initiative, Washington DC, USA
Methanine does present a quick, ready, potent solution. But I also think we have to match the challenge by durable solutions. So that's the visibility of it with the satellites, the policy action, the market action. We need to price leakage in. So we're gonna need to really do everything we possibly can.
SPEAKER_02Welcome to the sixth and final episode of Methane, our podcast series about the world's second most important greenhouse gas and the best opportunity we have for a win in the climate change fight. If you haven't heard our previous episodes yet, methane may not have had a lot of attention in the past, but it is a hugely powerful greenhouse gas and is driving between a quarter and half of the global warming we're currently experiencing. It's also a lot easier to tackle than carbon dioxide, and so governments and policymakers are now scrambling to catch up. In this last episode in our series, we look at the tools and the policy instruments being used to do that.
SPEAKER_05It's not just the environmental community that is saying all those things, it's clearly like the International Energy Agency.
SPEAKER_02If that sounds like a lot in a short space of time, it is. But that's largely because the emissions from the fossil fuel industry, oil and gas specifically, but also coal, have historically been ignored. So implementing just a few cost-effective measures, campaigners say, could clamp down on a fair chunk of methane emissions really quickly. The ambition was applauded, but it didn't give any meaningful instruction as to how to implement the pledge or how to know accurately what your emissions were as a baseline. Kim O'Dowd's is a voice you may recognize from a couple of our earlier segments. She's a campaigner focused exclusively on methane for an international NGO called the Environmental Investigation Agency.
SPEAKER_05So the Global Methane Pledge was launched at COP26 in Glasgow by the EU and the US. It's an initiative to globally reduce methane emissions by 30% by 2030. It's been now joined by 155 countries. Romania actually just joined the initiative at COP28, so just a few months ago. And it was a big moment when it was launched because this was the first international initiative on methane. And it kind of put methane forward as an important thing that countries needed to start looking into. However, even if it was a good first step towards action, the pledge remains just a pledge. There's no actual support for developing countries, for example, to mitigate their methane emission. They don't have access to stable and predictable funding to mitigate their methane emission as part of the pledge. There's no obligation to set up a mitigation target or mitigation action plans. And finally, there's no one who's currently taking like a look at what the countries are doing. There's no uh accountability mechanism. So you can be part of a pledge but continue emitting a lot of methane and there's absolutely no consequences.
SPEAKER_02Which is the problem with a lot of climate policy. How do you meet some of these challenges? Well, you can encourage change in behavior by facilitating some of these things, building capacity, increasing awareness and information sharing, and so enabling change voluntarily. You can also be a little less carrot and a little more stick with the introduction of command and control regulation, with things like penalties and fines to incentivize compliance. And you can look to fiscal policy measures to change the economics of emitting. Over the next half an hour or so we'll take a look at each of these in turn. First, however, to the voluntary approach. The United Nations was not unaware of the risk that the global methane pledge would remain just a pledge when it was launched. While many of the whole's conventions are still an issue, it did allocate some funding to the development of a collaborative platform to help support the pledge's objectives. That platform was called the International Methane Emissions Observatory, or EMAO for short. It was launched in the same year as the Global Methane Pledge, 2021, and it serves as a tool for implementing the commitments made under the pledge in two main ways. First of all, by providing a trusted framework for reliable data on methane emissions, and secondly, by giving the tools necessary to mitigate them to the right people. Dr. Roland Coopers, who we spoke to in episode two about the sources of methane from oil and gas, is also a global advisor to the United Nations on methane. And he was instrumental in IMAO's design.
SPEAKER_10So my name's Roland Coopers. I'm an advisor to uh UNEP's International Methane Emissions Observatory, and I've been working on this issue of methane mitigation for about 10 years with various organizations, also with the Environmental Defense Fund, which has to a very large extent put this issue on the agenda. And before that, I spent a decade with Shell. I was the head of the LNG business, and at the time nobody knew what LNG was, but that somewhat changed. I was also the head of sustainable development for the Shell Group. Going backwards, originally I'm a theoretical physicist, and I've always been interested in system change, and I've written a number of books on the consequences of complex systems on public policy.
SPEAKER_02I mentioned two principles in the founding of IMEO, one being the prioritization of data. Why was this so important?
SPEAKER_10One of the curious things about the entire climate space is that we have a lot of science detail about how much greenhouse gases are in the atmosphere, so how much is emitted globally. But there is very little data about where it exactly comes from. And so what we've done is we've taken these global numbers, and those have been allocated back to countries and industries and sectors and so on. But you we shouldn't be surprised that then countries and sectors actually have relatively little ownership of the numbers because it's an allocation game through emission factors.
SPEAKER_13What do you mean by emission factors?
SPEAKER_10So basically, we use averages, an average factor across all sorts of assets. And that's the way we run it. And so the big idea behind the observatory is in order to fix something, you know you need to know what the exact emissions are at a specific site. And that allows the people who run those sites to then prioritize actions and know what the particular problems are at that specific site. That is what IMEO is. It's the place where methane emission data will be assembled under the flag of the UN with all its neutrality. You know, if you want to know what the trusted source of methane data, empirical methane data is, then that's where you go.
SPEAKER_02Speak to anyone about the methane emissions issue, and this question of data will likely come up. The more we investigate and gather data, the more we realize the problem is much bigger than we thought. Two studies in the US, for example, recently found that the actual emissions of methane from one region's oil and gas operators were six times higher than the emissions that were being reported using emission factors and estimates. The Romanian study of oil and gas, which we talked about in episode three, found similar discrepancies. Measured emissions were almost five times higher than those that had been estimated by the IEA. Here's Raul Kazan from 2Celsius talking to me about it when we first started discussing the idea of creating this podcast.
SPEAKER_07The thing is that that we we do not have data. You know, this is also really the scarcity of data is is a big, big problem. And when data is not there, companies are just like uh happy with this ignorance.
SPEAKER_02So that's the first problem that the observatory seeks to resolve. But what about the second principle? Why does change need to be agent-centric?
SPEAKER_10So you need to figure out who do you need to do something different on a Monday morning as opposed to a Friday evening, and figure out how do we change the context so that that individual can act differently. You know, a lot of the narratives around climate action are about influencing policymakers and getting CEOs to sign up to stuff and ministers, etc. And all of these people obviously matter, but they're contextual. They're context to the person who actually needs to do the thing. They're not the actors. They're important, right? I'm not mocking them at all, but we have to think of them as context. So those are the two elements that went into IMEO design is this idea of a trusted source of data that's essential for collective action. And the other thing is make it agent-centric. Those are the two elements of IMEO.
SPEAKER_02Giving that responsibility to workers and managers who are actually on site is a priority because of the nature of methane emissions from oil and gas. They're not a byproduct of burning gas, they are the gas. It's practices on these plants like using the right valves, checking for leaks, monitoring the efficiency of flaring that will bring the emissions down.
SPEAKER_10For example, there's this fan, there's this amazing project that happened in the Dutch North Sea a couple of years ago. The government signed a covenant, is a typical Dutch policy thing. You don't regulate, but you sign a covenant with industry. So they signed a covenant with the oil and gas industry that they would reduce their methane emissions in the North Sea platforms by 50% in two years. And this was off a pretty good base, right? Because they weren't sloppily run. I mean, it's, you know, it was a reasonable environment. And they managed to deliver that. And I asked the person who managed the projects, who's an X Shell engineer. I said, you know, how did you do this? And he said, Well, you know, it's quite simple. We actually went and talked to the people who run the platforms and said, You know, what's going on here? What's the what's this venting thing? Why are you venting methane? And they know, they know where it vents, and they said, Well, it's because, you know, these guys from headquarters forced us to put this valve in. It's the wrong valve, but they won't listen to us. And because they, in a sense, gave more agency to the people, the blue-collar workers and not the white-collar workers, they gave them more agency and and a budget. So they swapped out the valve and they don't even no longer need it to vent. Part of it is getting better empirical data, but part of it is also, you know, listening to the people who actually run the kit.
SPEAKER_02If that sounds simple, it's because for a lot of it, it is, which is why methane emissions from oil and gas are considered such low-hanging fruit in the methane fight.
SPEAKER_10I mean, our chief scientist says that, you know, half of the emissions can be fixed by a guy with a wrench. And and this is a powerful image because it's actually true. A lot of this is is you know, is really silly stuff. Valves that are open that should be closed. Of course, you know, when you get to the second 50%, it becomes harder, right? You have to swap out, you have to have different equipment and design, etc., and it becomes more difficult. But the initial reductions tend to be really easy.
SPEAKER_02According to the International Energy Agency, or the IEA, up to 70% of the emissions from oil and gas could be mitigated at no net cost to the industry. But enough about the theory. What does IMAO look like in practice? In its day-to-day operations, it has three main work streams. One is the funding and development of the sorts of scientific studies that we heard about in Romania to not only get a more accurate data picture, but also to enable local operators to know where they can start to reduce. The second focus is the coordination of satellite data, which is becoming invaluable for methane mitigation. The third is an industry partnership framework to encourage companies to start to monitor, report, and verify their own emissions independently. This is known as the oil and gas methane partnership, or OGMP. As you'll hear, the theory of change underpinning OGMP is very much in the spirit of partnership and cooperation.
SPEAKER_13The industry partnerships obviously get a lot of attention and rightly so. So maybe let's move on to that. What is OGMP and how does it help?
SPEAKER_10So OGMP is what's referred technically referred to as an MRV system, which is measurement, uh, reporting and verification. So essentially, companies sign up an MOU with UNEP, and they promise to do a certain number of things, which is to measure the emissions at each of their assets according to a methodology that we've defined, together with the world's methane scientists and with the companies, etc., there's quite a specific methodology that you need to follow. They report the emissions and we verify them using satellites and consistency checks, and then we publish annually the aggregated reports. So for every company, we we publish in an extensive annual report what their measurements have been the past year and also the quality of those measurements. And this is really important because the first year we expect the quality to be poor. This is what we call level one reports. And so we say these are numbers, but they're poor quality numbers. And it takes a number of years for companies to move from poor quality measurements to high quality measurements because these it's not easy, and these are very large companies. So we're not only transparent about the emission numbers, but also what the quality of those numbers are, which I think is really crucial because it means that the uncertainty margin is very, very large.
SPEAKER_13Can I just ask, though, with that quality question? I mean, some of these companies, obviously you want to work in partnership with them, right? So you want to say, yeah, it's okay if at the beginning you're level one and your data is is poor. But should we give them such a free pass for poor quality data? They have the money, they know how to, you know, they do a lot of complex things on site at asset level. Why is it so hard for them to measure methane emissions?
SPEAKER_10Because it's hard and it takes time, right? You need to create the capacity that guides and the you know the contracts with service providers to do this on one or two sites really well and then then roll it out to the next ones. And that just takes a number of years. And it's really important to recognize that industrial reality, right? If you're operating in dozens of countries around the world, you know, you you can't turn on a dime. This this really takes a while. And you know, for example, to develop you know a major oil or gas operation takes a decade. They also don't do that in six months. You know, these things really are complex and they just take time.
SPEAKER_13Why do they join? Why do companies sign up? What's in it for them?
SPEAKER_10There are a number of reasons. One is that the societal license to operate gas really is they recognize that it's increasingly tied to this. Right? You you you know, an oil and gas company can be forgiven for producing a fuel that that emits CO2 because that's what they do, and we use it. But losing a lot of it along the way is really embarrassing. And and you know, the people who work in these companies also have friends and kids, etc., who ask them, you know, so what do you do about the climate? Because it's eminently avoidable. We we have companies that are near zero emitters. So it is possible.
SPEAKER_02The current iteration of OGMP, sometimes referred to as OGMP 2.0 because it replaced an earlier version, has now been around for about two and a half years. What progress has been made?
SPEAKER_10Today we cover almost 40% of the world's oil and gas production, as well as chunks of the downstream and pipelines, etc. And so we cover, for example, almost 80% of the world's LNG flows are included in OGMP. So it's quite strong coverage. Who still needs to join? Notably, Exxon and Chevron are not part of uh and not for lack of discussing with them. And then all these companies are essentially the small ones, right? Exxon and Shell are small companies. The big ones are the Gazproms and the Aramcos are much, much, much larger. The state-owned, the large state-owned companies. And there are quite a few who are members. So it's Petronas, Petrobras, Ecopetrol, and there's quite a long list of, and so it's not that this is just an alliance of, you know, a bunch of Western companies. It's very global and it's very diverse in terms of its membership. And we're signing up companies almost every week, right? So we've only started two years ago. So to get from zero to 40% of the world's production is not so bad in two years.
SPEAKER_02Not bad at all. And since our interview, ExxonMobil has joined too.
SPEAKER_07I find OGMP is a very interesting model. It is a new model in climate diplomacy. I mean in diplomacy in general, you know, in these sort of treaties are very original and they might actually work because that's a way of putting companies and states, but mostly companies, in front of each other. And they will learn from one another, you know, and focus on direct measurements and have at least have an idea where they stand, you know, and knowing that they already can do something about it.
SPEAKER_02But like everything, there are challenges. It was exciting to see ExxonMobil come on board, but some of the other state-owned groups that Dr. Cooper's mentioned, like Gazprom, the Russian Gas Company, and Aramco, the Saudi Arabian oil company, have shown little interest. One study that looked into the barriers to getting good MRV in place found that companies tend to not want to spend money that they can avoid spending, even if they have it. And remember, this is the UN's flagship methane program. While there are plans afoot to expand to other sectors, for now its focus is very much what's in the name, oil and gas. Here's chemo down again.
SPEAKER_13Does something like OGMP not work as something like a structure in terms of giving, if not countries, then companies at least a framework?
SPEAKER_05Absolutely. OGMP is kind of the state-of-the-art monitoring and reporting framework, but that's just for the energy sector. And methane is also emitted by in the agriculture sector and in the waste sector. And obviously, it's super important to put a lot of emphasis on the energy sector because it's the low-hanging fruit, but we can't just overlook agriculture and waste. And we need to provide some kind of framework for those sectors as well. OGMP has been used, is used already, and it's great, but we would need to kind of figure something out kind of similar for waste and agriculture.
SPEAKER_02Voluntary initiatives can get a lot of early momentum, but often for actual change, you need a little more force. In short, regulation. Deborah Gordon is another voice you may recognize from the last episode. She's based at Brown University in the States and is a senior principal at the US-based climate NGO RMI.
SPEAKER_12It needs to be in regulation. It can't be left voluntarily to be done. That's what we found with the sector. It's fine to start with voluntary efforts like you know OGMP and Yes, exactly. Like the industry will lean in to certification or OGMP 2.0. But the reality is that that's a good first step, but the real durability of that is regulation that's enforceable.
SPEAKER_02This is where we turn to next, and one example of methane regulation in particular. In November 2023, just before the start of the COP28 summit, the three different bodies of the European Union the Commission, the Council, and the Parliament, agreed to the text of a New landmark methane regulation, which was the first of its kind for the union, and globally was the most stringent law on methane emissions to date. It took almost two years of negotiations, under the pressure, of course, of intense lobbying from multiple interest groups. So, how did the regulation evolve and where might it succeed or fail relative to OGMP? Kim O'Dowd was close to the process the whole way through.
SPEAKER_05So it covers the oil, gas, and coal sector and includes monitoring and reporting measures and mitigation measures. For monitoring and reporting, it kind of follows the OGMP 2.0 framework, which is with extended timeframe, like to reach level 5 OGMP, it's longer than what the OGMP requires to the participants. For mitigation, we have provision on leak detection and repair. Then you have limits to venting and flaring, which is good. And it introduces also standards. So basically, you have to replace components that are venting by design, so that's quite positive. For inactive wells, which a lot of people don't know, but once you stop using oil or gas well, it can continue to emit quite a lot of methane emissions if it's not properly sealed or plugged. And that causes a risk for like for climate, obviously, because methane is emitted, but also for groundwater pollution, and also it's just a risk of explosion because it's just gas. And here we actually don't have a clear picture of how many inactive wells there is in Europe. So the regulation asks member states to do an inventory of all their wells and to develop mitigation plans to properly seal those wells.
SPEAKER_02Already then there are aspects that can't be covered by OGMP. Leak detection and repair schedules force companies to check for leaks more regularly. Limits to venting and flaring make it illegal to have flares below certain efficiency levels or components that vent when they don't have to. If incentives and voluntary approaches don't work, legal performance standards can be enforced at least, and are far more likely to be adhered to under a regulatory framework than a voluntary one. Downsides, it's way more costly and requires quite a high institutional capacity to enforce.
SPEAKER_10There are relatively few places where you produce oil and gas where you can have effective regulation. Right? The regulation in the US and in Europe will be, you know, okay to good or whatever it ends up being. But if we wait for effective regulation in, you know, in Libya and Iran, in Nigeria, and Kazakhstan, the places where a lot of the emissions are, it's not going to be on time. And that's why the kind of principle-based agreement that we have in OGMP is really important. I think we really need to have both and not simplify the world to saying, oh, regulation is the solution. It matters, but it's not the only thing that matters.
SPEAKER_02And it doesn't come as easy. Jutta Paulus is a member of the European Parliament for the coalition group known as the Greens and the European Free Alliance. She was one of the co-rapporteurs responsible for drafting the Parliament's position paper on the regulation. Jutta's well known in the Parliament and among campaign groups for her ambition on environmental policy.
SPEAKER_04We have the so-called oil and gas methane partnership, which is something which occurs at UN level. So you have UN and you have industry and you have certain, let's call them, self-obligations on monitoring, reporting, verifying methane emissions. And what we're doing here, we're basically putting ODMP into European law. So any company who has signed OGMP could really not complain about this regulation.
SPEAKER_02But complain they have. While the standards within the oil and gas methane partnership weren't really challenged at all, things change when it comes to regulation, and the EU methane regulation met with fierce opposition from industry on almost every level. We approached several companies and industry bodies for comment, but unfortunately weren't given a direct statement. But here's a flavor of the position of some oil and gas producers.
SPEAKER_09Nothing existed in Europe on this, and even at member state level, there was little legislation targeted specifically on methane emissions. So we agree and support that such a regulation needs to be developed. But it's technically very complex because it goes into the very details of our operations. The regulation is also, in some areas, just too prescriptive. You can use modern technologies like flying a drone over pipelines or platforms to detect drumms. Rather than having a team of specialists being shipped in or flown into our production sites and going with these one or two types of devices that are handheld devices along the steel of our facilities, searching for possible methane emissions, which is very cumbersome, a huge effort, a huge cost, and creating a lot of emissions by itself by this activity, flying with helicopter people on Teams N rather than having just a camera on a flex staff monitoring the plant all the time.
SPEAKER_13I just wanted to put to you some of the responses that have been put out by oil and gas producers just to give you a chance to respond to them. So they've said they're extremely concerned about the regulation, that some of the requirements rely on technologies that don't exist, which obviously goes against a lot of the claims that the environmental community make that this is a sort of low-hanging fruit mitigation effort because these technologies do exist. They've said the regulation is at risk of being impossible to implement by the European oil and gas industry because of certain requirements that are disconnected from reality. And then in their last sort of general position statement that they actually published on their website, they wrote, We're concerned that the regulation in large part establishes unnecessary MRV, measurement, verification, and LDAR leak detection and reporting activities, and new service industries with corresponding cost to the industry and consumers, but with no environmental benefit, therefore not being in line with the better regulation principles. What do you think when you get pushback like that?
SPEAKER_05It's very frustrating to hear, especially because it's not just the environmental community that is saying all those things. It's literally like the International Energy Agency, like for years has been talking about this and showing that. I mean, there's been studies where they show that 80% of measures in the oil and gas sector are available at no cost or low cost. And it can actually be beneficial for, and I don't want to go because I we are very clear that like in we need a fossil show phrase, obviously, so I don't want to hear like I'm promoting oil and gas at all. That's not what I'm saying. But if they fix their leaks, they will have more product to sell without having to extract more.
SPEAKER_13That's obviously true for the for a gas company. How does an oil company, if they capture that methane, they can't necessarily take it to market in the same way that a gas company can?
SPEAKER_05You can also use the gas in your facilities, for example, instead of using NG like from the external world, you could just use it to power your facility. So yeah, I mean, it's not a big surprise that the reaction from the industry face, industry lobbying for absolutely every regulation that touches on climate issues. We're used to it. It's just it's it's problematic because we've seen that there was a lot of pushback in the whole process of regulation and the final outcome definitely shows that those voices were listened to by certain policymakers.
SPEAKER_02It isn't just industry bodies and companies that oppose the stricter forms of the regulation. While all member states may agree with the aim to reduce the EU's overall methane emissions, the burden invariably falls on the shoulders of some member countries more than others. For those whose oil, gas, or coal industries are a thing of the past, a new regulation on methane emissions on this sector is nothing but good news. But this isn't the case for all member states. Romania, for example, will face estimated expenses of over a billion euros to meet the new regulation's requirements. Another forthright lobbyist from within the negotiating chambers was Poland, who saw the methane regulation as a potential death knell to their main energy industry, not oil and gas, but coal. Here's Jutta Paulus again.
SPEAKER_04I'll be very frank and open because it's already been out in the media a lot, and so I'm not breaching any secrets. What the problem with coal is that we have a lot of underground coal mining which is still occurring in Poland. And now this regulation, this methane regulation is framed as the EU tries to close down Polish coal mines through the backdoor. Because Poland claims there is no possibility to mitigate those methane emissions from those mines, and therefore our only option would be to close them.
SPEAKER_02And Kimu Dowd.
SPEAKER_05There was a lot of pushbacks on the coal section, particularly from Poland, and they considerably reduced the impact that the coal section will have. What the commission had put for was quite good, but then it was completely walled down during the process, and it kind of only puts the easiest measures on coal that you can do.
SPEAKER_02Poland successfully pushed for a major weakening in the emissions reduction measures for coal. Coal methane emissions are more complicated than those from oil and gas because many of the leaks persist long after mines are no longer economically viable. For Poland's coal miners, the cost of meeting the requirements to monitor and cut these emissions would force closure and end tens of thousands of jobs. Someone who focuses exclusively on the methane issue issue from coal is Dr. Sabina Asan at the climate NGO EMBA. I asked her to explain what the implications were of the weakening of the regulation stance on coal. I must just warn you, the sound on Dr. Asan's recording is not in stereo, like the rest of our audio recordings.
SPEAKER_11One major consequence of these loopholes is that you know, quite frankly, the EU might not be able to reach its climate target of a 58% reduction in its fossil fuel methane emissions. The EU also needs to think about what message does this send to other countries that are thinking about how can we reduce and mitigate our coal mine methane emissions. As we know, the EU is one of the leaders of the global methane pledge, and it's now agreed to a regulation that is potentially unaligned with the IEA's net zero roadmap, which requires a 75% cut in energy sector methane, and a just a generally unambitious mitigation, which sends a similar message to other countries.
SPEAKER_02If only a small share of your emissions come from imports, this might not matter. But the European Union is the world's third largest economy and its biggest importer of natural gas. Its external methane footprint is estimated to be eight times as big as its domestic one. Here's Kim again to explain.
SPEAKER_05Imports are particularly important because over 70% of the coal and 90% of the gas and 97% of the oil that the EU consumes comes from imports. That means that most methane emissions associated with EU consumption occur long before reaching the border, especially because most methane emissions in the oil and coal sector occurrence extraction, and three-quarters of gas emission comes at the moment of extraction. So that's just yeah, where it's extracted. So in the US, in Algeria, in Russia, in Qatar, etc. etc.
SPEAKER_02So if you could extend the rules for EU producers to all producers whose energy the EU uses, that would mean that regardless of the regulatory environment in their own countries, all suppliers would suddenly have to raise their games to meet the same stringent standards. This was the most pertinent point during the negotiation process for Jutta Paulus.
SPEAKER_04For me, the most important point actually is we need to extend this legislation to imports. 90% of methane emissions from the energy sector occur outside the borders of European Union because we import most of our oil and gas. So by making these provisions on monitoring, reporting, verification, but also on leak detection and repair mandatory. I actually had contact to a company which does methane monitoring as a service, and they have customers worldwide, they use open data from Copernicus, which is the European Union satellite program. And one of these satellites has an instrument where you can spot super emitters of methane worldwide, which is really an asset. This company says they have estimated that if we could really extend this regulation to imports worldwide, that would save 400 million tons CO2 equivalent per year, which is really, really a lot.
SPEAKER_02Legislators therefore proposed that the regulation could be far more powerful in effecting change by extending the standards to all those who exported energy to the EU. But again, regulation has far more stakeholders than voluntary campaigns. And while progressives saw opportunity from a climate security perspective, from an energy security perspective, the governments of individual member states were wary. The regulation was first proposed in December of 2021, and it was a matter of two short months before this. Energy ministers were perhaps understandably reticent about discussing onerous methane sanctions and standards to gas that they were going to be hugely dependent on. Here's Kim again.
SPEAKER_05It was a difficult time, obviously, just before the start of the war in Ukraine, where we were in a context of just in general fear and also from just the public of the soaring energy prices. And I live in the UK, definitely there was a big problem here. And definitely a lot of people use this context as an excuse to do less, and particularly in the question of imports, when literally the data shows that you could have used those methods to give more gas to Europe. I mean, there was a study done by uh Flair Intel, which is a company that looks at flaring events in the world through satellites, and they had found, like I can't remember the exact numbers, but that if northern African countries were to stop venting and flaring, they could start supplying about one-third of what Russia was exporting to Europe. Yeah, it's just a question, it's kind of a negative battle, I guess.
SPEAKER_02The number wasn't quite one-third. The study Kim's referring to by Flair Intel found that four North African gas exporters, Algeria, Libya, Tunisia, and Egypt, waste the equivalent of 15% of the quantity of Russian imports to Europe through venting, inefficient flaring, and leaks. And in the end, the narrative battle was won by energy security. Flavia Solazzo is the senior director on the EU energy transition for the Environmental Defense Fund Europe, which has been pressuring governments to pay attention to methane for over a decade.
SPEAKER_03There is the big concern, the regulation doesn't go far enough in addressing methane emissions from imports. We need to get it right here, but we also have to use what we do here as a lever to make sure that what we import meets the same standards at least.
SPEAKER_02Not all of the timelines and details on imports are fully agreed yet. But nevertheless, the EU regulation has set a precedent and has undoubtedly spearheaded a move towards a more global recognition of the need for methane rules in other jurisdictions. Here's a summary of what the final text included.
SPEAKER_05It kind of introduces a three-step approach. The first step being information sharing. Operators will have to start telling competent authorities whether the country where they import from have some mitigation or MRV measures or not. But if they don't, it's fine, it's not a problem. It's just they have to kind of start gathering that data. The second step is as of January 2027, countries that export gas, coal, or oil to the EU will have to comply to the MRV measures, so monitoring and reporting and verification measures. And then the third step is the introduction of an intensity standard performance standard that will have to be set by the Commission by six years of the implementation of the regulation. So that's around 2030.
SPEAKER_02So those are the two most promising mitigation measures that have come into force since the Global Methane Pledge in 2021. But if you remember, there was one more set of instruments that commonly gets talked about in climate policy, which we haven't mentioned when it comes to methane. Financial ones. Someone who's looked at this in detail is Dr. Ian Parry at the International Monetary Fund.
SPEAKER_06I'm in the climate policy division in the Fiscal Affairs Department of the IMF. I've been at the IMF for uh 12 years, and uh most of my research focuses on um designing mitigation strategies for our countries.
SPEAKER_02Dr. Parry prefers financial instruments to regulation when it comes to climate policy because he says they're more flexible and less costly to enforce.
SPEAKER_06We have to be careful with regulations if they're telling all firms to adopt the same technology. That's not going to be very cost-effective. Maybe for some firms it's feasible to adopt that technology, maybe for others it's very costly to adopt that technology. Fiscal policies are more flexible, so they they allow firms to choose how to cut their emissions.
SPEAKER_02While the IMF considers all kinds of financial instruments, Dr. Perry prefers fiscal approaches, that's economic speak for taxes, to trading schemes. I asked him to talk me through the difference.
SPEAKER_06Emissions trading systems can be designed well, uh, but we we generally recommend carbon taxes in place of emissions trading systems for uh three main reasons. First of all, carbon taxes are straightforward from an administrative perspective. Most countries already collect taxes on fuels as they enter the economy. So a carbon tax is just building off what governments are already doing, whereas an emissions trading system requires monitoring firm emissions and monitoring trading markets, so it's a it takes a bit more institutional capacity. Secondly, the government can provide more certainty over the emissions prices or the tax rates going forward. That can be very important for promoting adoption of cleaner technologies in the private sector to have uh certainty over uh the emissions the future emissions prices and how much they will save by adopting technologies which uh cut their carbon emissions. And then thirdly, under a carbon tax, the revenues just uh accrue to the uh finance ministry for general purposes, for cutting other taxes or maybe funding critical public investments for sustainable development goals. Whereas in trading systems often these fiscal opportunities are not exploited because the allowances are maybe given away for free rather than auctioned, or even if they're sold, often the revenues are earmarked rather than going to the general government.
SPEAKER_02What Dr. Perry and some of his colleagues have proposed is that this is an overlooked solution that could be applied to the methane problem too.
SPEAKER_06Countries already have have established business tax regimes for the extractive sector, and so it it's straightforward from the administrative perspective for them just to introduce a fee on methane emissions at the same time that they collect business taxes.
SPEAKER_02The best example, he says, is Norway, which introduced a methane tax on vented and leaked emissions for offshore oil and gas a few years ago.
SPEAKER_06So one possibility, as in Norway, is to require that these firms, oil and gas producers, monitor their own emissions and report that to the government and then remit taxes based on that. That seems to be working well in Norway. Another possibility is to say, well, we'll assume a default emission rate for your production, levy a tax based on that, but then if a company installs its own metering and demonstrates that its emission rate is less than the default, they can get a rebate.
SPEAKER_02An interesting part of Dr. Perry's work has been to actually calculate what kind of level methane could and should be taxed at. And they've got a number.
SPEAKER_06Well, we think a fee in the order of about $70 of carbon dioxide equivalent from methane is is needed to get global emissions cut by 30% and in in line with temperature targets. Yeah.
SPEAKER_02That sounds a lot, and it is, but the idea would be for the fees to be graded and potentially staggered to get actual. Results. On the one hand, better performances by companies, but in the bigger picture, keeping global warming in line with the Paris Agreement goals.
SPEAKER_06That's exactly right. We're trying to calculate what taxes are needed to cut our emissions, either methane or carbon dioxide, to levels that are required to get on track with our temperature goals.
SPEAKER_02The details of OGMP and the fine print of regulation or tax instruments can make the abatement of methane feel like an academic exercise sometimes. But ultimately, all of them are aimed at turning environmental ambition into real change. Here's Dr. Roland Cooper's again.
SPEAKER_10All of them matter because, you know, if we get back to the agent who actually needs to do something, all of these things signal to the agent that this matters, right? Because people are talking about taxes and regulation and all of these things. So it increases the agency. So it all matters, but none of them are the only thing. And that's what always despairs me is when people say, well, you know, just regulation. If we could only tax things, it would be fine. It's completely implausible. I mean, nothing ever changes at scale with just a single. And we know this from systems change theory. It's just not a it's just not the way it works.
SPEAKER_02So that's a peep through the door for you into the worlds of climate diplomacy and policy and how they're being used to push for change on the emissions of methane. Have we got anywhere yet? Here's Professor Jonathan Stern, who we spoke to about natural gas in the energy transition in the last episode. He's from the Oxford Institute for Energy Studies in the UK and now spends a lot of his time researching emissions from oil and gas.
SPEAKER_01We don't really need any more big announcements. What we need is action. You know, if you look back at the global methane pledge and you ask yourself, right, well, what's happened since then? Have governments actually set out, here's how we're going to meet this pledge, year by year, sector by sector, here's how we're going to do it. Because we're not so far away from 2030 now. My concern is there's a lot of announcements, there's a lot of important people signing documents. I don't want to say I don't see a lot of action because there might be a lot of action, but we don't know about it. We don't know whether whether this has caused methane emissions to drop dramatically and in which sectors and in which countries. The concern is that when you look at the atmospheric numbers, global uh global methane emissions are still going up. Now, obviously methane emissions are divided into anthropogenic, that's caused by human activity, and the rest. So it might not be the human activity ones that are going up, but the IEA says that they think fossil fuel methane emissions are still rising.
SPEAKER_02But is this all they are? Initiatives, pledges, empty promises. What more is required? At the Environmental Investigation Agency, Chemo Dowd is in no doubt what we need. Money and some structure.
SPEAKER_13In terms of the progress, you were talking about some of the things that we need to have in place. We had a lot of quite significant developments on methane at COP28, which is now two years after the global methane pledge. How satisfied were you with the results for methane at COP28? And are you in general with the progress that we've seen in the last two years?
SPEAKER_05So, yes, uh one billion was announced on methane, which is great. I mean, it's a first step, I guess. But the climate policy initiative has found that we need 10 billion per year to reach our goal of reducing methane emissions by 30% by 2030. So 1 billion, I don't know how to phrase it, friend, but like yeah, 1 billion per year each year until 2030. So that's one thing, it's not enough. But the second thing is we still don't know where this money is coming from. It's not clear and where it's going to, who's gonna benefit from it. And this is where I'm gonna get, sorry, I'm gonna repeat myself, but if we had a clear financial mechanism where we say, okay, we have this 10 billion, and someone is gonna decide a secretaria, how much is gonna be given to this country, how much is gonna be given to this country, but not just that, but also they that they tell countries, okay, you'll have that until 2030. That's essential for countries to have stable and predictable funding. Because we have a few cases we've we've talked to countries who receive some money to, for example, to do methane monitoring in one specific landfill in this particular city in that country. Okay, they're gonna do the project, but they have no idea whether they're gonna receive additional money to then, I don't know, exploit the data, develop policy to kind of respond to the data that they found, and also then have like additional monitoring. We need to give countries money so that they can do all the spectrum of activity that is needed for MATEM, and that is monitoring and mitigation. And monitoring is all on all the sectors, and mitigation is developing policies, having the people in the ministries and in on in the field who are going to make sure that the policies are developed and implemented. If you just keep give money for one like one specific project, a country can't like have a global view on their methane emission in their country. So even if it was a good step, we definitely need to see more and we need to see it more structured. It's been two years now since the pledge was announced, and I think two years is considerably enough to just start acting. Because I think we see a lot of just initiatives and new projects and things, but we don't see an actual framework. And I think that's two years in, that's what we need now.
SPEAKER_13And where would you be looking for that framework? Would that framework come out of government policies within those countries? Would it come out of UNEP? Who is it that we're waiting for to give us the structure?
SPEAKER_05I think a first step, definitely a first step would be to create just a financial mechanism because it's the most urgent thing. And when you you you listen to the conversation, uh, for example, at the CCAC ministerial meeting that happened at COP28, a lot of developing countries were just saying, listen, we need more support, we can't do this without support. We need financial assistance, we need technical assistance. This is what we need to make sure that we can actually contribute to the goal. So I think we should start by creating this kind of fund or mechanism. I don't want to put a word to it, I don't think it's our place, we just want to push for the idea, then can country can decide what shape it should take. And we could make the CCAC, the Climate Clean Air Coalition, in charge of this fund because they already do it. They already have money, they already receive money to support projects, but just not enough right now, and not enough to, as I said, give the big amounts to countries on a long time frame. From that, we can think about also starting to have some monitoring being done, and then we have like the International Meth and Emission Observatory that's going to be a major help for that and have more and more data, and then push for, and that's also a lot of just organization within uh countries to push for the adoption of policies, and that when we come back to the EU, for example, we like the EU took its first step towards towards uh methamp mitigation with the EU methane regulation. And also, if you want to come back to the European Union, it has to start looking at agriculture as well, and not just say, okay, we've done energy, we've done our job over now.
SPEAKER_02And with that, we've come to the end of the episode and of the series. Methane may sound a bit niche, but I hope we've convinced you that it's pivotal to some major aspects of the climate challenge, which we are now nose up against. And while it's relatively easy to tackle, it still takes doing, as Deborah Gordon from Brown University reminds us.
SPEAKER_12Methane does present a quick, ready, potent solution. But I also think we have to match the challenge by durable solutions. So that's the visibility of it with the satellites, the policy action, the market action. We need to price leakage in. We're gonna need to really do everything we possibly can. We can't just be Pollyanna-ish about this is gonna be so easy that it will do itself. I think we're gonna have to be really mindful about making it happen.
SPEAKER_02It's also at the heart of how our society interacts with the much bigger natural aspects of the climate system. And methane feedbacks now represent a very real threat to any gains we're able to make. And if we don't, I'll leave the last comment to Jonathan Stone from the Oxford Institute for Energy Studies.
SPEAKER_13Let's imagine a world where we do embrace the idea of natural gas as the kind of sort of green fossil fuel, and we say yes, we're gonna phase our coal. Looking at the United States as an example, a huge shift from coal to gas. Can you spell out for people the climate consequences of not getting methane emissions under control in that scenario?
SPEAKER_01Not specifically, but I think the easiest way to say this is getting methane under control is easy in relation to other greenhouse gas reducing measures. This can make a big and immediate contribution to reducing overall greenhouse gas emissions. It's not expensive and it's not technically difficult. If we can't do that, if companies can't do that, and if governments can't require companies to do that, it's hard to see that we're going to be able to do much else.
SPEAKER_02It remains for me to say a massive thank you to all our contributors. If you're interested in reading more about an aspect of their work you've heard discussed, have a look in the show notes for links to their research and to various other related resources. Thank you for listening.