FILE PHOTO: A pipeline that moves methane gas from the Frank R. Bowerman landfill to an onsite power plant is shown in Irvine, California, California, U.S., June 15, 2021. REUTERS/Mike Blake
LONDON: A global group of about 50 organisations including the Climate Bonds Initiative (CBI) and the International Energy Agency are working on new guidelines that could enable oil and gas producers seeking to reduce their methane emissions to access transition financing.
The organisations intend to release funding recommendations at the COP29 annual United Nations climate conference in November and hope to showcase two demonstration deals, according to CBI chief executive officer Sean Kidney.
The non-profit, which assesses sustainable debt, would then certify methane reduction projects that meet the criteria.
Those efforts aim to unlock a crucial source of financing to help reduce methane emissions from oil and gas, particularly for state-owned operators in emerging markets.
Fossil fuels are responsible for roughly 35% of methane generated from human activity, but received less than 1% of the US$13.7bil annual average directed toward methane mitigation efforts in 2021 and 2022, according to the Climate Policy Initiative.
Transition bonds have been among the fastest-growing subset of sustainable debt, particularly in Asia. Issuance jumped to US$20bil this year, more than four times the amount for all of 2023, according to BloombergNEF. Fossil-fuel firms and institutions typically sell transition bonds to finance emission-abatement efforts. — Bloomberg
