Methane Cut Pledge Is Big Boost for Transition to Net Zero
Jon Wallace, Fund Manager, Environmental Solutions, discusses innovation in detecting methane and the importance of a pact to reduce emissions of this harmful gas
The Global Methane Pledge covers countries representing nearly half of global methane emissions and 70% of the global economy. Some major producers including Russia, India and Iran didn’t sign, however.
The focus on methane highlights the challenges and opportunities of an often-overlooked climate change issue. Carbon emissions are more widespread, but methane, in the main stemming from oil and gas, coal, and agriculture, is a more potent greenhouse gas (absorbing much more heat from the sun) and has contributed to about a quarter of the rise in global temperatures since the Industrial Revolution.
Reducing methane emissions is crucial to reach the Paris Agreement target of limiting global warming to a maximum 1.5 degrees above pre-industrial levels. As methane’s warming effect is shorter-lived than carbon dioxide, tackling its emissions would have an immediate effect. The Pledge is not a silver bullet, but it marks a step-up in addressing this key challenge.
Plumes of methane
Researchers are finding leaky oil and gas industry infrastructure is responsible for more of the methane in the atmosphere than previously thought. An International Energy Agency paper1 published in September says that energy producers’ downstream operations, which includes distribution, refining and storage, generates 20% of all methane emissions. It cited researchers using an optical gas camera who detected methane leaks at 100 sites in Europe.
In the US, this number is estimated to be 30%, leading to the US government unveiling a plan to cut methane emissions with a focus on oil and gas producers. These regulations would take effect as early as 2023 and aim to reduce methane from oil and gas operations by 74% from 2005 levels by 2035, according to the Environmental Protection Agency.
Total methane emissions and methane intensity of production in selected oil and gas producers, 2020*
*Source: IEA, all rights reserved. Chart data as at Nov. 2021
Halting these emissions requires exacting measures, such as monitoring lengthy pipeline infrastructure and repairing equipment that is often difficult and expensive to access. At a time when the energy transition is in sharp focus, we see this series of developments as making an important contribution to highlighting an often-overlooked advantage of a pivot towards clean energy sources.
Innovation beyond energy systems
The Global Methane Pledge has highlighted the importance of tackling all sources of methane, including from agriculture. Over many years, we have monitored innovations looking to address climate challenges in this notoriously hard to tackle sector. In a paper prepared for the WWF in 20092, for example, we highlighted that enteric, or intestinal, methane emissions from beef and dairy herds could be reduced by up to 15% by a novel feed additive that was then still in lab-stage development and included this in an emissions reduction pathway for the sector for 2020 and beyond.
We have been encouraged by the commercialisation of innovations aimed squarely at reducing the environmental impacts of dairy and red meat, while recognising they are only one part of a solutions mix that also includes changing diets. This feed additive has received regulatory approval for use in Brazil – one of the five biggest global methane polluters and a signatory of the Pledge – and has an efficacy of 30% for dairy cattle, a step up from our original estimates.
It was developed by Dutch nutrition group DSM – which announced during COP 26 that it would dramatically expand production of the additive at its facility in Scotland. In our view, this marks a further example of how environmental solutions can both embolden and benefit from regulation over time, providing a fertile landscape for long-term stock picking.
2 ‘Strategies for Reducing the Climate Impacts of Red Meat/Dairy Consumption in the UK’ 2009 Wallace, Jackson et al (WWF/Imperial).
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