COP26: Methane Takes Center Stage

One of the most important legacies of the COP26 climate conference will likely be its central focus on reducing methane emissions around the world. The Biden Administration made addressing methane emissions a major priority at COP26, helping to secure a number of important outcomes, including:

• A Global Methane Pledge, involving more than 100 countries;
• An all-of-government U.S. Methane Emissions Reduction Action Plan, involving multiple federal agencies; and
• China’s explicit commitment to address methane emissions.

These developments have important ramifications not only for companies in the energy and agricultural sectors who will be required to reduce their methane intensity, but also for companies at the vanguard of developing and implementing technology solutions in this space.

Methane is the second largest greenhouse gas by both mass and global warming significance after carbon dioxide. It is the simplest hydrocarbon, the primary component of natural gas, and is released into the atmosphere from many sources, including oil and natural gas operations (including extraction, processing and distribution), landfills, livestock, and thawing permafrost. According to the Intergovernmental Panel on Climate Change (IPCC), methane has a global warming potential (GWP) between 84-86 times greater than carbon dioxide when considering its impact over a 20-year period. Indeed, the IPCC estimates that methane emissions have caused about one-half of the 1 degree Celsius global increase in temperatures since the pre-industrial era. Because it remains in the atmosphere for a much shorter time than carbon dioxide, methane emissions—and controlling them—has an outsize effect on global temperatures in the near term.

Laser focused on the methane issue, the United States was instrumental, along with the European Union, in securing a Global Methane Pledge to collectively cut methane emissions across all sectors by at least 30% below 2020 levels by 2030. Thus far, 109 nations, representing nearly 50% of the sources of global methane emissions, have joined the pledge. The pledge focuses on action to advance technical and policy work to reduce methane emissions and recognizes the importance of the private sector, development banks, financial institutions, and philanthropy to achieve its goal. The signatories seek to prevent “more than 8 gigatons of carbon dioxide equivalent emissions from reaching the atmosphere annually by 2030.”

Although not signing onto the Global Methane Pledge, China did make a surprise announcement during COP26 related to methane. Special Presidential Envoy John Kerry helped to secure a Joint Glasgow Declaration on Enhancing Climate Action in the 2020s between China and the United States. The declaration included a commitment by China “to develop a comprehensive and ambitious National Action Plan on methane, aiming to achieve a significant effect on methane emissions control and reductions in the 2020s.” Although China’s pledge was notably light on specifics (including the baseline it would use to measure reductions), it was still a significant development because according to the Global Methane Initiative China is currently the largest methane emitting nation.

During COP26, President Biden also released the U.S. Methane Emissions Reduction Action Plan, focused on cutting pollution from the largest sources of methane emissions through an “all of government” approach. The plan highlights available tools to reduce methane emissions including regulations, financial incentives, transparency and disclosure of data, and public and private partnerships. It focuses on the largest sources of methane emissions in the US, including the oil and gas sector, landfills, abandoned coal mines, and agriculture. The plan features initiatives by various federal agencies, including:

• Environmental Protection Agency proposing updated rules for methane from new oil and gas sources and for the first time proposing to regulate methane from existing sources. EPA projects this rulemaking will reduce about 41 million short tons of methane emissions from 2023 to 2035 (920 million metric tons of carbon dioxide equivalent calculated using a GWP of 25 taking into account impacts over 100 years);
• Department of the Interior tackling venting and flaring of methane from oil and gas operations on federal land;
• Department of Transportation upgrading and expanding pipeline rules to cut methane leaks;
• Department of Agriculture leveraging and expanding incentive-based and voluntary partnership programs, such as the climate-smart agriculture program that will reward farmers for reducing methane emissions; and
• Department of Energy advancing methane emissions reduction through its Industrial Assessment Centers, which offer energy assessments to heavy industry to identify opportunities to improve productivity.

The methane discussions at COP26 and at side events also highlighted progress on the development and implementation of innovative emissions control technologies. Participants focused not just on avoiding and reducing methane emissions, but also removing methane from the atmosphere. There is no consensus yet on whether methane removal technologies will prove feasible or economic, but the discussions demonstrate that this field continues to be dynamic and rapidly evolving.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.