Net Zero Industry Tracker 2024

PolicyOIL AND GAS To achieve net zero in the oil and gas sector, key actions include accelerating methane emission reductions in line with the Global Methane Pledge; providing incentives for adopting zero-methane and zero-flaring technologies; and stimulating investments in electrification to help operators manage costs. Enhancing CCUS deployment through risk mitigation policies and performance- based payments for CO2 avoidance is also necessary. Additionally, creating a market for low-emissions hydrogen will not only require production- based incentives and regulatory measures, such as cap-and-trade systems, but also incentives to stimulate demand for hydrogen. Establishing robust measurement and reporting frameworks is essential for ensuring clear eligibility criteria for support programmes and for effective governance of imports. While policies supporting methane abatement in the EU and US are quite advanced, efforts are required to scale up such policies in the rest of the world. Oil and gas industry policy summary TABLE 19 Policy typePolicy instrumentsKey examples Impact Market-based Carbon price EU-ETS Incentivizes oil refiners to reduce emissions.567 Mandate-basedTargets Canada’s target to reduce methane emissions from oil and gasThe new policy mandates a 75% reduction in methane emissions by 2030 compared to 2012 levels. This includes requirements for better leak detection, venting limits and equipment upgrades to capture fugitive methane emissions.568 Nigeria’s targets to eliminate routine flaring and fugitive methane emissionsNigeria’s emissions mitigation and reduction targets include the elimination of routine gas flaring by 2030 and a 60% reduction in fugitive methane emissions/leakages from oil and gas operations by 2031.569 Direct taxes/feesMethane fee under the IRA570Establishes a maximum annual methane waste emission rate of 25,000 tonnes of CO2e (vented, released or flared) for a facility and imposes penalty charges starting at $900 per tonne in 2024, increasing to $1,500 per tonne by 2026 for facilities emitting more.571 National roadmapsNational Methane Action Plan – the EU, the US, Norway and Canada572As part of the Global Methane Pledge, 150 countries have committed to work together to collectively reduce methane emissions by at least 30% below 2020 levels by 2030.573 MRV guidelines Colombia’s national MRV standardsTechnical standards and guidelines for fugitive and flaring emissions MRV for upstream oil and gas operations.574 Standards and frameworksGIIGNL framework for GHG neutral LNG MRVComprehensive framework for a consistent industry approach to declaring GHG neutral LNG cargoes.575 Incentive-BasedInternational collaborationOil and gas companies have joined the Oil and Gas Decarbonization Charter, a global industry Charter dedicated to high-scale impact, and to speed up climate action within the industryWork towards industry best practices in emission reductions by:576 –Investing in renewables, low-carbon fuels and negative emissions technologies –Enhancing transparency through better measurement, reporting, and verification of emissions and progress –Aligning with best practices to cut emission intensity and aiming to implement these by 2030 –Reducing energy poverty while ensuring secure, affordable energy for all economies US and United Arab Emirates’ Partnership to Accelerate Transition to Clean EnergyA new bilateral Partnership for Accelerating Clean Energy (PACE) aims to fight climate change by deploying $100 billion and 100 GW of green energy by 2035.577 Infrastructure capacity expansion plansNorway government electricity capacity upgrade targets to support electrification of LNG assetsTargets grid expansion and renewables capacity by 2030 to support electrification of Norway’s only LNG plant.578 Direct technology fundingMethane Emissions Reduction ProgramThe initiative provides $1.36 billion in financial and technical assistance through various funding opportunities. It introduces a Waste Emissions Charge (WEC) for methane and mandates the EPA to update the Greenhouse Gas Reporting Program (GHGRP) subpart W regulations for the oil and gas sector.579 Net-Zero Industry Tracker: 2024 Edition 129