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Measurement, Reporting and Verification of Methane Emissions from Natural Gas and LNG Trade

The Global Methane Pledge to reduce emissions by at least 30 percent by 2030, signed by more than 100 countries at the COP26 Conference in November 2021, moved methane on to the global political agenda and gave it a much sharper public focus. Atmospheric concentrations of methane are rising much faster than those of carbon dioxide, and it is a much more powerful greenhouse gas.[1]

Urgency to reduce methane emissions from fossil fuels by at least 75 percent by 2030 (relative to 2020) has been recognized and recommended by both UNEP’s Climate and Clean Air Coalition and the International Energy Agency as an essential contribution towards achieving net zero global energy emissions by 2050, and as the fastest and lowest cost means of reducing the rate of climate warming. The EU Methane Strategy proposed the establishment of a methane intensity standard for domestically produced and imported fossil fuels, with an initial focus on emissions from natural gas and LNG imports. However, in the proposed EU Regulation, the intensity standard was replaced by an obligation on importers to provide information for the establishment of a methane transparency database. Not until the end of 2025 will the EU have gathered sufficient data on emissions to develop a methane standard which endangers the 2030 targets for reducing emissions; and dictates that methane emission frameworks need to be negotiated on a much shorter time scale. 

Measurement Reporting and Verification (MRV) of Data 

MRV of emissions from imported gas and LNG are best divided into three supply chain segments:

  • From production (upstream) to the border of the exporting country.
  • From the border of the exporting country to the border of the importing country.
  • Emissions from within the importing country.

It should be expected that emissions from each of these segments will change over time with changes in the sources of production, supply routes (especially for LNG), and end-uses of gas in the energy balance of importing countries.

Three major requirements for creating credible MRV of emissions are:

  • To move measurement and reporting of methane emissions from standard factors – either engineering-based or from U.S. EPA data – to empirical (Tier 3) measurements, and to reconcile bottom-up (ground level) and top-down (satellite/aircraft/drone) observations.
  • To ensure that data measurement and reporting has been verified and certified by accredited bodies.
  • To require asset-level emissions data to be transparent and publicly available. Failure to do so on grounds of ‘commercial confidentiality’ risks being interpreted as evidence that the data is not credible.

The International Methane Emissions Observatory (IMEO), has been given the tasks of collecting, collating, and publishing data submitted by companies from both the EU transparency database and the Oil and Gas Methane Partnership Version 2.0 (OGMP2) framework, recognized by the EU as the ‘gold standard’ for MRV of methane emissions. The European Commission and the IMEO are proposing to develop and publish a Methane Supply Index from the data, which is collected, but for this to allow meaningful comparisons all the major companies involved in exporting gas and LNG to Europe would need to report emissions on a similar basis to OGMP2 which currently has very few members outside Europe.

Data Sources and Export Supply Chains

The UNFCCC and the IEA are major sources of public domain data on methane emissions for the six most important exporters of pipeline gas and LNG to Europe. Submissions to the UNFCCC database are not compiled using common methodologies, and data for non-Annex 1 countries are not up to date. 

The IEA Methane Tracker has current data which is regularly updated using a consistent (but not entirely transparent) methodology. Data from the Tracker and from companies and governments show that Norway has very low emissions, Nigeria and Algeria have the highest emissions; with the U.S., Russia, and Qatar being somewhere in between. Detailed examination of individual natural gas and LNG export supply chains for these six most important suppliers to Europe shows how Norway has progressed MRV and reduced emissions to a much greater extent than other exporters. Complexity of U.S. LNG export supply chains contrasts with the relative simplicity of Qatari chains. For Russian exports, the focus is on Gazprom’s long transmission pipelines, while Algerian and Nigerian companies are only just beginning to address these issues.

Emissions from Specific Pipeline Gas and LNG Supply Chains

MRV agreements and emission values with each exporting company, based on the specific characteristics of its export supply chain, need to be established. There will need to be multiple values based on different LNG and pipeline export supply chains. Buyers will need to establish these values with exporting companies and, in the case of state-owned companies, possibly also with governments. 

In four out of the six major suppliers to Europe, co-mingling of gas before it reaches the border of the exporting country makes it impossible to trace exported molecules back to the point of production. Qatar and Russia are the only countries where this may be possible for at least some routes. For Norway, Algeria, Nigeria and the U.S., assumptions will need to be made on averages of emissions arriving at their borders prior to onward pipeline transportation or loading on to an LNG tanker. MRV of emissions from onward pipeline and LNG transportation will provide a total value for emissions at the border of the importing country. Emissions from within the importing country are best determined by gas and LNG buyers and their regulator(s).

Taxes, Prices and the GWP Coefficient

How these emission values are used to determine taxes and prices for imported gas and LNG will depend on greenhouse gas legislation and regulation in the importing country. Elements of the EU’s proposed Carbon Border Adjustment Mechanism may provide a useful template. If methane charges are to be based on CO2 prices the global warming potential (GWP) coefficient, for conversion of methane into CO2 equivalent, will be a key consideration for governments with 2050 GHG reduction commitments. Shortening the time horizon for the GWP of methane from 100 to 20-30 years would result in a 2-3-fold increase in CO2 equivalent.

Asia and Imports of `Carbon Neutral’ LNG

The urgency for buyers of natural gas and LNG to provide credible MRV of emissions from imports to Europe – the largest gas importing region with the most climate-sensitive policies - is likely to spread to other major gas and particularly Asian LNG importing countries as it becomes increasingly necessary for companies and governments to account precisely for their emissions. In this context, ‘carbon-neutral’ LNG cargos are a highly problematic construct, lacking in transparency and therefore in environmental credibility. The term `carbon neutral’ needs to be replaced by `greenhouse gas verified’ LNG. The SGE and GIIGNL methodologies, and the study of Cheniere’s 2018 cargos combined with the company’s commitment to provide individual cargo emission tags from 2022, are important milestones in the creation of frameworks for establishing global LNG supply chain emission values. Any claim to carbon or (more precisely) GHG neutrality requires transparent MRV of individual cargo emissions matched with an equally transparent and equivalent offset.

Relevance for the Future of Natural Gas, LNG and All Fossil Fuel Trade

Although this study has focused on natural gas and LNG, the same argument can be made for emissions from imported oil and coal, with methane emissions from oil imports as important as (and in many countries more important than) those from pipeline gas and LNG. With increasing international and civil society pressures on governments and companies to accelerate fossil fuel phase-out, transparent MRV of methane emissions has become a non-negotiable requirement for traded fossil fuels. A lack of this information undermines claims that natural gas and LNG can play a significant ongoing role in the low-carbon energy transition. There are significant obstacles to agreement of enforceable legal and regulatory MRV frameworks, even on a bilateral (let alone a global) basis. 

This paper has described the start of a journey to create credible and transparent documentation of methane emissions from natural gas trade, and emissions of all GHGs from LNG trade. But the longer that the international gas community takes to put transparent MRV frameworks in place, the greater the likelihood this will be construed as either reluctance or inability to reduce emissions, and that countries will adopt alternative energy options.


Methane Emissions:

1.  Standardized methodologies and procedures for empirical measurement, reporting, and verification (MRV) of methane emissions from internationally traded gas and LNG should be agreed as soon as possible, ideally by the end of 2022, between European buyers and their natural gas and LNG suppliers and endorsed by governments and the European Commission. Longer time scales will mean that the 2030 methane reduction targets cannot be achieved. Buyers of global LNG will need to adopt similar frameworks and time scales.

2.  Negotiations on MRV of emissions between European buyers and governments, and their counterparts in exporting countries, should focus on persuasion combined with technical and financial assistance. Attempts to impose (what may be seen as) arbitrary standards are likely to result in prolonged international legal/regulatory disputes.

3.  Corporate responsibilities for MRV of methane emissions should be established for three different segments of export supply chains: the wellhead to the border of the exporting country, the border of the exporting country to the border of the importing country, within the importing country.

4.  Methane emissions values – in absolute terms and intensity per unit of supply – should be stated for the different segments and assets of export supply chains, setting out how these values were calculated. These values should be transparent and publicly available; disclosures of partial or generalized data on grounds of confidentiality risk being dismissed as ‘greenwash’.

5.  Importing governments need to take a position on the most appropriate time horizon, and hence global warming potential (GWP) coefficient, for conversion of methane into CO2 equivalent, especially if charges for methane emissions are related to those of CO2. The adoption of COP21 and net zero GHG reduction targets for 2050 calls into question the continued use of a GWP with a 100-year time horizon.

Emissions from LNG Trade:

1.  The term ‘Carbon Neutral LNG’ is a misnomer and should be replaced by: ‘Greenhouse Gas Verified LNG Cargo’ which should provide a transparent GHG content for the cargo (subject to approved MRV procedures) delivered to the regasification terminal of the importing country.

2.  Any offset of emissions based on the GHG content of an individual cargo of LNG should be a separate and transparent transaction, verified by accredited bodies.


[1] This is the summary and conclusions of a paper of the same title. The full text can be found at: The Oxford Institute for Energy Studies, Measurement, Reporting, and Verification of Methane Emissions from Natural Gas and LNG Trade: Creating Transparent and Credible Frameworks (January 2022).

Jonathan Stern
Jonathan Stern

Jonathan Stern is a Distinguished Research Fellow at the Oxford Institute for Energy Studies.He is honorary professor at the Centre for Energy, Petroleum & Mineral Law & Policy, University of Dundee; visiting professor at the Centre for Environmental Policy, Imperial College London; fellow of the Energy Delta Institute and a Distinguished Research Fellow of the Institute of Energy Economics, Japan (in Tokyo).

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