While efforts to mitigate climate change have typically focussed on carbon dioxide (CO2), attention has been increasingly turning toward other greenhouse gases (GHGs), most notably: methane.

At COP26 in Glasgow, 122 countries, led by the US and the EU, signed the Global Methane Pledge, committing to collectively reduce methane emissions by at least 30% of 2020 levels by 2030. COP28 built on this momentum, recognising the importance of methane not only in voluntary commitments but also in the final negotiated text, which calls on countries to “accelerat[e] and substantially reduc[e] non-carbon-dioxide emissions globally, including in particular methane emissions by 2030”. 

Voluntary methane commitments at COP28

Methane was the topic of many events and voluntary commitments announced in the Blue Zone. One major announcement was the launch of the Oil and Gas Decarbonization Charter (OGDC), under which 50 international oil and gas companies (including 29 national oil companies) committed to cut methane emissions from their operations to “near zero” by 2030, eliminate routine flaring of natural gas (the primary element of which is methane) by 2030, and reach net zero carbon emissions from their operations (Scopes 1 and 2 only) by 2050.  Although the OGDC has been criticised for lacking ambition and ‘teeth’ (emissions from operations account for only 15% of the total emissions from exploration, extraction, production, and combustion of fossil fuels, eliminating flaring and emissions from leaks are, some say, measures that should have been taken years ago, and, as a voluntary pledge there is no form of accountability or enforcement) it marks a significant “first step” toward reducing methane emissions. This is particularly so when coupled with new funding  packages launched at COP28, such as the Global Flaring and Methane Reduction Partnership (GFMR), a USD250 million fund to support methane abatement projects in emerging markets, and USD 100million worth of funding mobilised at the Business & Philanthropy Climate Forum to convert methane data into action. 

So, what is methane and why does it matter? 

Methane is a potent GHG that is roughly 84 times more harmful than an equivalent amount of CO2 (CO2e) (in terms of trapping heat, contributing to global warming) over a 20-year period. It is a ‘short-lived climate pollutant’, meaning it has a shorter atmospheric lifespan and, although it is more harmful, is cleared from the atmosphere much faster than CO2 (in around 12 years compared to centuries). 

After CO2, methane is responsible for approximately 30% of climate change to date. Tackling methane emissions is therefore seen as one of the most effective and immediate ways to avoid further global warming, with studies showing that reducing anthropogenic (meaning caused by human activity) methane emissions by 50% over the next 30 years could mitigate global temperature change by 0.2’c. The flipside of this is that failing to arrest methane emissions could bring us dangerously close to surpassing irreversible tipping points. 

Annual global methane emissions are around 570 metric tonnes. 40% of methane is emitted from natural sources, such as wetlands, lakes, and rivers. The remaining 60% derives from the following anthropogenic sources:   

• Energy: the energy sector (oil, natural gas, coal, and bioenergy) accounts for one third of anthropogenic methane emissions, emitting roughly 135 million tonnes in 2022. Methane is emitted through flaring, venting and leakages (unintentional leaks from valves, pumps or pipe connectors or intentional leaks through pneumatic valves that bleed small quantities of methane to depressurise a system). 

• Agriculture: The agricultural sector is the largest source of methane emissions, responsible for roughly 142.3 million tonnes of methane per year. Most agricultural methane emissions stem from ruminant livestock, particularly cows, and rice paddies.

• Waste: Methane emissions from landfill account for about 14% of anthropogenic methane emissions. Everyday waste is the most significant contributor to landfill, where it undergoes aerobic decomposition, generating methane due to the chemical reaction with oxygen. 

Why is it such a hot topic at COP28? 

Methane has been increasing in atmospheric concentration for decades (concentrations have increased more than 150% since pre-industrial times) – largely without consequence for the businesses and sectors responsible. A panel exploring methane litigation during the Climate Law and Governance Day during COP28 explained that this has largely been due to two factors: first, a lack of data around methane emissions (it is an invisible gas, making leakages hard to detect); second, a weak (or weakly enforced) regulatory framework. 

Both of these factors are changing. 

Developments in monitoring technology, specifically from satellites, have facilitated the collection and access of data relating to methane emissions. New satellite technology can detect leaks at high resolution with increasing accuracy, making it possible to identify specific sites and facilities responsible for emissions. Difficulties remain obtaining accurate readings in offshore, mountainous, or cloud-covered regions (such as rainforests), but monitoring technologies are being continuously developed to provide higher resolution, greater coverage and more accurate detection thresholds (see, for example, NASA SVS | Sources of Methane). 

At the same time, regulations around methane emissions are tightening. The Global Methane Pledge generated unprecedented momentum for methane action. Over 150 countries representing 80% of the global economy have now endorsed the pledge, and more than 50 countries have developed national methane action plans or are in the process of doing so. Tackling methane emissions is a priority of the EU’s Green Deal and its methane strategy published in October 2020, sets Europe’s ambition and aims to curb temperature increases, improve air quality, and reinforce the EU’s global leadership in the fight against climate change. In November 2023, the EU provisionally adopted a new regulation to reduce energy sector methane emissions from Europe and global supply chains, which will oblige the fossil gas, oil and coal industry to properly measure, monitor, report and verify their methane emissions, and take action to reduce them. 

EU President von der Leyen presented this new regulation at COP28, announcing EUR 175 million in funding to methane actions and committing to a roadmap to COP29 incentivising EU companies to commercialise gas that would otherwise go to waste. 

Implications for business

Advancements in methane data and regulation create a risk that corporates will be held liable – for the first time – for failing to address methane emissions. This could be in the form of regulatory action down the line or even strategic lawsuits. Businesses should incorporate methane into their carbon accounting methodologies and will benefit from being ahead of the regulatory curve. 

Further, because methane is itself a valuable commodity, businesses have a natural financial incentive to eliminate wasteful routine flaring and reduce leakages from their operations. Methane captured can be resold or used for energy. Although these measures may have higher up-front cost, they are easy to implement. For example, emissions from oil and gas can be reduced by 75% by implementing existing and well-known measures such as leak detection and repair programmes and upgrading leaky equipment. 

With more attention turning to methane, businesses should keep a close eye on developments in this space, ensuring they benefit from the opportunities and mitigate methane-related risks.