Methane Fund: New financing mechanisms for funding methane abatement in Oil & Gas industry
Context and challenges
Methane emissions from the Oil & Gas (O&G) industry account for ~5% of global GHG emissions.
Since Methane is 80 times1 more potent than CO2 at trapping heat in the atmosphere, it is a critical lever to meet the 1.5oC target by 2030.
It is estimated that 45% of Oil & Gas methane emissions can be cut by 2030 at nearly no net cost and that an investment of USD 100 Bn could achieve Near Zero global methane emissions by 2030.
COP28 have called on O&G companies to commit to Near Zero Upstream Methane by 2030 and Zero Routine Flaring. To support this, COP28 is collaborating with the World Bank (WB) to launch two sister methane funds:
1.World Bank Fund: aims to provide capital for project identification, foundational analytics, capacity building and policy action required to drive methane abatement. Donors include philanthropies, O&G companies, governments and the private sector
2.COP28 Methane Abatement Fund: aims to provide capital for end-to-end execution of methane abatement projects, while establishing commercial viability to unlock financing. Funders include financial institutions, sovereign wealth funds and O&G companies
Both funds are initially targeting investments in the Emerging Markets and Developing Economies (EMDEs), with a focus on the highest emitting countries.
Commitments from Business & Philanthropy
Make a financial commitment:
- To the World Bank’s blended investor fund
- To the COP28 Methane Fund focused on financial institutions, sovereign wealth funds and O&G companies
Support with knowledge
(e.g., share best practices, contribute technical expertise, etc.) by joining or supporting a technical working group
Note – To have access to the COP28 fund, O&G companies must commit to the Oil & Gas Charter
How to get involved?
- Methane is a ~80x more potent GHG in a 20-year timescale. On a 100-year period, Methane is ~30x more potent than CO2 | 2. Initial estimate suggests that ~USD 100 Bn is required to abate ~2.3 GtCO2
Source:IEA;| Energy, Climate change and environment European Commission