belching

The Biden administration’s global initiative to cut methane emissions by 30 per cent by the end of the decade will affect Australian industry despite Prime Minister Scott Morrison refusing to sign on to the pledge, investor groups and analysts say.

But they caution the initiative – endorsed by more than 100 other countries – will wash through the Australian economy inefficiently, meaning industry will be forced to act, but less consistently and productively than might have been possible via a nationally adopted approach.

Australia is the world’s fifth-largest methane emitter not to sign up to the agreement, according to 2020 data from Climate Watch. The rebel pack is led by major fossil fuel and agriculture economies China, Russia, India and Iran.

Emma Herd, partner of climate change and sustainability at EY, rejected the idea that Australia could gain a competitive advantage by opting out of the pledge, telling the Australian Financial Review the global initiative would shape Australian industry through trading relationships, international standards and access to capital.

“Demand dynamics ... are complex. Global commitments like these will impact Australian business as much as our own domestic targets.

“We know the actions our trading partners are taking to decarbonise will flow through to economic and financial implications for Australian industry,” she said, pointing to research from EY and the Reserve Bank of Australia.

Agriculture is by far the largest emitter of methane in Australia, according to data from the Commonwealth Department of Industry, followed by the fugitive emissions from coal mining, land clearing, food and sewage waste, then the oil and gas sectors.

The challenge for agriculture is that it is one of the sectors most vulnerable to climate change, yet it faces difficulty in reducing emissions, which mostly come from grazing cattle and sheep.

Tony Wood, energy and climate change program director at the Grattan Institute think tank, said at the moment “materially cutting those emissions is simply not currently possible”.

On Wednesday, the Biden administration made its move to immediately propose methane reduction regulations targeted at the US oil and gas industry via the Environmental Protection Agency (EPA).

A Woodside Petroleum spokeswoman said the major LNG exporter backed global action on methane but would not be drawn on whether the Morrison government should have signed the pledge.

“Woodside welcomes global action to reduce methane emissions, as evidenced by our commitment in 2018 to the Guiding Principles for reducing methane emissions across the natural gas value chain.”

Morné Engelbrecht, acting chief executive officer of Beach Energy, a major domestic gas producer that is also poised to start LNG exports, said the company “fully accepts” that reducing emissions, including methane, is a priority but wouldn’t be drawn on whether he supported the government’s move.

“We are also reducing our equity emissions through our involvement in the Moomba Carbon Capture and Storage project, with operator Santos, which reached final investment decision earlier this week,” he said.

The Investor Group on Climate Change, which represents members with $2 trillion under management, says that if agriculture, coal and oil and gas companies fail to cut methane emissions in line with this pledge, they may still face investor pressure and risk forcing up the cost of borrowing.

“I think it’s a fair assumption that quality capital will flee investments that aren’t offering that credible transition plan with targets and actions committed across all types of emissions including methane,” IGCC director of corporate engagement Lauren Hill said.

Read more:

https://www.afr.com/policy/energy-and-climate/global-methane-deal-will-shape-australia-despite-morrison-experts-20211103-p595pl

The article in The Financial Review goes on saying: "Methane is more than 80 times more potent than carbon dioxide over a 20-year period, although its greenhouse impact fades much faster." 

My understanding which could be wrong is that methane is 30 times more potent than CO2. Nitrogen oxides are about 400 times more potent than CO2. Nitrogen oxides form from the usage of fertiliser for cultivation. 

Russia's problem in regard methane emissions is that it is freed by the melting of permafrost which compounds the problem over huge areas. Meanwhile Russia sells a lot of gas (methane) to Europe — which of all things cannot get enough of the Russian gas. Go figure....

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