• Atmospheric CO2 /Parts per Million /Annual Averages /Data Source: noaa.gov

  • 1980338.91ppm

  • 1981340.11ppm

  • 1982340.86ppm

  • 1983342.53ppm

  • 1984344.07ppm

  • 1985345.54ppm

  • 1986346.97ppm

  • 1987348.68ppm

  • 1988351.16ppm

  • 1989352.78ppm

  • 1990354.05ppm

  • 1991355.39ppm

  • 1992356.1ppm

  • 1993356.83ppm

  • 1994358.33ppm

  • 1995360.18ppm

  • 1996361.93ppm

  • 1997363.04ppm

  • 1998365.7ppm

  • 1999367.8ppm

  • 2000368.97ppm

  • 2001370.57ppm

  • 2002372.59ppm

  • 2003375.14ppm

  • 2004376.96ppm

  • 2005378.97ppm

  • 2006381.13ppm

  • 2007382.9ppm

  • 2008385.01ppm

  • 2009386.5ppm

  • 2010388.76ppm

  • 2011390.63ppm

  • 2012392.65ppm

  • 2013395.39ppm

  • 2014397.34ppm

  • 2015399.65ppm

  • 2016403.09ppm

  • 2017405.22ppm

  • 2018407.62ppm

  • 2019410.07ppm

  • 2020412.44ppm

  • 2021414.72ppm

  • 2022418.56ppm

  • 2023421.08ppm

78% of methane emissions reduction in the fossil fuel sector can be achieved at no net cost.
News & Views

The methane menace: low-hanging fruit or stalled progress?

Reducing methane emissions is both cheap and technologically feasible. Yet, the current trajectory is off-track

Much of the conversation around energy transition tends to focus on carbon-dioxide. Partly, this reflects the cognitive bias of the buzzword-like aura of “de-carbon-isation”. Yet, to focus entirely on carbon dioxide is to ignore a third of the problem.

Methane, the bit that gets ignored, is the second-largest contributor to global warming and is responsible for over a third of global temperature increases since the industrial revolution. Over a 20-year period, methane is about 84 times more powerful than CO2.

A new report from the International Energy Agency (IEA) calls for urgent addressal of global methane emissions. In so doing, the IEA’s new research brings up old wisdom: methane abatement in fossil fuel sectors is commercially and technologically feasible. “Low hanging fruit”, as the IEA puts it.

If that is true, the returns from resources invested towards abatement of methane will carry a high probability of success. In their policy advocacy, asset owners have attempted to address methane emissions from fossil fuel companies. Progress, however, is slower than desired.


We estimate that more than 80 Mt of annual methane emissions from fossil fuels can be avoided by 2030 using existing technologies, often at low – or even negative – cost


Methane emissions

The IEA’s latest thinking suggests that 580 million tons of methane is emitted each year. 60% of these emissions are anthropogenic i.e. attributable to human activity. By 2030, if current trajectories continue – these could rise by 13%. This is tangential to net zero emissions pathways. To limit temperature rise to desired levels, anthropogenic emissions need to fall by over 30% by 2030.

The majority of methane emissions have two sources – agriculture and the fossil fuel sector. Addressing the latter is low hanging fruit, according to the IEA.

The IEA says, “we estimate that more than 80 Mt of annual methane emissions from fossil fuels can be avoided by 2030 using existing technologies, often at low – or even negative – cost”.

The argument about methane being the low-hanging fruit of energy transitions hinges on two pillars – cost and technology. Slashing methane emissions from oil, gas and coal production can be done at low costs using technology that exists. The IEA estimates the share of abatement possible at around 78%, of which 39% can be achieved at no net cost.

Solutions such as leak detection, emission control devices, reduced flaring and component replacements are not only available but also widely deployed. Additionally, once captured, methane emissions can be sold – an additional revenue stream to address upfront costs of abatement.

The conclusion, in the IEA’s own words is that “methane abatement in the oil and gas industry is one of the cheapest options to reduce greenhouse gas emissions anywhere in the economy”.

How cheap is it? IEA scenarios estimate the total investment needed by 2030 at around $75 bn – that’s less than 2% of the fossil fuel industry’s net income in 2022.


The debate is not whether there should be methane regulations, it’s about how strong the methane regulations should be and how strongly they should be enforced

Brian Rice, portfolio manager, CalSTRS

Asset Owners and Methane Regulation

On their part, asset owners have primarily relied on collective policy advocacy to address the issue of methane emissions in the fossil fuel sector.

In terms of incentivizing corporate action on methane emissions reduction, regulations go a long way.

If reducing methane emissions in fossil fuel sectors is low hanging fruit, the persistent high levels of methane emissions seem surprising. A regulatory push perhaps, can achieve what voluntary corporate actions have not.

There is some truth to this. In 2022 the United States environmental regulator proposed an update to the Clean Air Act, broadening the scope of methane reduction rules was part of the new package. This was a major win for asset owners’ advocacy efforts.

That same year, the investment committee at the California State Teachers' Retirement System (CalSTRS) noted the rule change as direct result of the fund’s policy advocacy:

“The rule comes after years of CalSTRS’ advocacy for tighter methane regulations”, the committee affirmed. Broadening the scope of methane rules was a particular investor interest that CalSTRS advocated for. “We encouraged the EPA to make low production wells in scope for the rule since collectively they account for a significant portion of methane emissions”, the committee said.

As part of its advocacy efforts, CalSTRS also signed up to an investor statement calling on governments to prioritise methane emissions guidelines.

“The debate is not whether there should be methane regulations, it’s about how strong the methane regulations should be and how strongly they should be enforced.” said Brian Rice, portfolio manager, CalSTRS.

Fossil fuel companies have also lobbied regulators. In a letter addressed to the US Environmental Protection Agency in February 2023, Exxon Mobil says it cut methane emissions by nearly 50% compared to 2016 levels. Its support for methane emissions rules seems conditional: “reasonable, cost-effective and legally sound federal methane emissions regulations”, the letter says is what Exxon has asked for.

In 2020, a group of fossil fuel companies including BP, Eni, Shell and Total lobbied European lawmakers to “consider the overall cost to industry and society, as well as societal and climate benefits of reducing [methane] emissions”.

Earlier this year, the American Petroleum Institute – the national trade association representing American fossil fuel companies - raised concerns with the EPA’s proposed rule. “While we support an effective federal regulatory framework, we are concerned the proposed rule as drafted could create barriers to innovation and hamper U.S. energy production”, said API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola.

A battle for regulatory influence between asset owners and companies seems to shape how methane abatement is incentivised and monitored.

Methane abatement always featured in some form at COP. At COP26 for instance, 100 countries signed up to reduce methane emissions by 30% by 2030. At COP27, the momentum continued with methane finding its way into more nationally determined contribution targets.

At COP28, the IEA’s clarion call for methane abatement could find an audience. Amidst it all, the battle for regulatory influence over the proverbial “low hanging fruit” will be on full display. What the IEA calls an easy win, might not be so easy after all.

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