[C Tech Now] Catching the Accomplice of Global Warming 'Methane'... Tax Regulation on 'So Trims' Too

Methane, 80 Times the Global Warming Potential
US and Europe Gradually Implement Regulations
Bezos Donates to Methane Satellite
Denmark Imposes Tax on Cow Burps
EU Regulates Imported Fossil Fuels

Image source=Getty Images Bank

At the ‘Summit on Super Pollutant Greenhouse Gases’ held at the White House on the 23rd of last month, the Bezos Earth Fund announced a donation of $10 million (approximately 13.7 billion KRW) to MethaneSAT. MethaneSAT is a project by the nonprofit environmental organization Environmental Defense Fund (EDF) that launches a satellite into Earth's orbit to measure where and how much methane is being emitted.

The satellite, successfully launched in March, orbits the Earth 15 times a day, tracking and monitoring methane emissions worldwide. EDF plans to make the methane emission data collected by MethaneSAT accessible to anyone on the internet. The Bezos Earth Fund was established in 2020 by Jeff Bezos, the founder of Amazon, who invested $1 billion to address climate issues.

The Environmental Defense Fund (EDF) launched the MethaneSAT in March to measure and publicly disclose detailed methane emissions worldwide. Image source=methaneSAT.org

Major countries' focus on solving global warming is rapidly expanding from carbon dioxide to methane emission reductions. This year, the United States and Europe have successively announced regulations on methane emissions. As a major importer of liquefied natural gas (LNG), which primarily consists of methane, and with a developed petrochemical industry, South Korea cannot be exempt from the global trend of strengthening methane regulations.

Global Warming Potential 80 Times That of Carbon Dioxide

Methane (CH4) is a colorless, odorless asphyxiant gas. It is the main component of natural gas commonly encountered in daily life. The smell in natural gas is due to an added odorant for safety purposes. Methane is produced in various places, such as wetlands, reservoirs, farmland, food waste treatment plants, sewage, and wastewater treatment facilities, where organic matter decomposes. Additionally, large amounts of methane gas are released into the air during flaring or venting processes at oil and gas production facilities. Methane gas can also leak from petrochemical plants.

According to the report "Invisible Mission: The Methane Problem in the Oil and Gas Industry" published by energy consulting firm Wood Mackenzie, 33% of methane emissions worldwide occur naturally. The remaining 67% are attributed to human activities. Among human activities, agriculture accounts for 27% and the oil and gas sector for 17% of methane emissions.

The world is paying attention to methane because it is the second most influential greenhouse gas on global warming after carbon dioxide among the six major greenhouse gases. According to the Sixth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), the Earth's surface temperature has risen by 1.09 degrees Celsius from 1850 to the present (2020), with carbon dioxide contributing 0.8 degrees and methane 0.5 degrees.

Carbon dioxide remains in the atmosphere for 100 to 300 years, whereas methane's atmospheric lifetime is about 12 years. However, methane's global warming potential (GWP) is approximately 80 times that of carbon dioxide over a 20-year period. Therefore, reducing methane emissions is expected to have a significant effect in slowing global warming.

At the 26th Conference of the Parties on Climate Change (COP26) held in 2021, the Global Methane Pledge (GMP) was signed to reduce global methane emissions by at least 30% by 2030 compared to 2020 levels. So far, over 150 countries, including South Korea, the United States, and Canada, have joined this pledge.

However, very few are fulfilling the pledge. According to an aerial survey report released by EDF on the 31st of last month, 7.5 million tons of methane leak annually from oil and gas operations in the United States. This is four times higher than the estimate by the U.S. Environmental Protection Agency (EPA) and equivalent to the amount half of all U.S. households would use in a year. It is eight times the amount voluntarily announced by 50 oil companies, including BP, Shell, and ExxonMobil, at last year's United Nations (UN) Climate Summit.

U.S. and Europe Introduce Methane Regulations One After Another

Regulatory movements on methane emissions are also emerging. Denmark, a leading dairy country in Europe, introduced the world’s first ‘Trimse’ at the end of June. The name comes from the fact that burps from livestock account for 90% of methane emissions in livestock farming.

Under this measure, Danish farmers will have to pay a tax of 300 kroner (approximately 60,000 KRW) per ton of carbon dioxide equivalent emitted by livestock such as cattle and pigs starting in 2030. From 2035, the tax will increase to 750 kroner (approximately 150,000 KRW) per ton. However, a 60% tax credit will be provided, so the effective tax in 2030 will be 120 kroner (approximately 24,000 KRW) per ton of carbon dioxide equivalent.

In addition to the tax, the Danish government plans to provide subsidies worth 40 billion kroner (approximately 8 trillion KRW) to support the transition to eco-friendly systems in agriculture. The government estimates that this will reduce methane emissions by 70% compared to 1990 levels. Denmark’s measures may expand to other European countries. Danish farmers argue that uniform regulations across all European countries are necessary for fair competition.

The United States and Europe are intensifying methane regulations on the energy industry. The European Union (EU) adopted methane emission reduction regulations for the energy sector in May. Fossil fuel companies must measure, report, and verify (MRV) methane emissions. Additionally, flaring and venting from wells will be banned by 2027.

What draws particular attention to the EU’s measures is the plan to apply methane regulations to imported fossil fuels as well. Starting next year, companies importing oil, gas, or coal into the EU must report the annual methane emissions of the producing companies to EU authorities and submit methane reduction plans. From 2030, the methane intensity of fossil fuels imported into the EU must not exceed the maximum methane intensity limit set by the EU. This is expected to act as a kind of import regulation. There are also forecasts that methane regulations could become a second carbon border adjustment mechanism (CBAM).

Earlier, the U.S. EPA announced at COP28 held in Dubai last December that it would reduce 80% (58 million tons) of methane emissions from the U.S. oil and gas industry by 2038. Specifically, U.S. oil and gas companies must regularly monitor and report greenhouse gas and air pollutant leaks. Third parties are authorized to detect emissions, and remote sensing technologies using satellites and aircraft are permitted.

The Indo-Pacific Economic Framework (IPEF), which includes South Korea, the United States, Japan, Australia, New Zealand, Singapore, and 14 other countries, also includes methane reduction commitments. According to the IPEF agreement, participating countries must strive to reduce methane emissions by 2030. It specifically states the need to reduce methane flaring, venting, and leaks in the oil and gas value chain.

◆Terminology

Six Major Greenhouse Gases and Global Warming Potential = The 1997 Kyoto Protocol defined six major greenhouse gases as carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). The global warming potential (GWP) indicates the extent to which other greenhouse gases contribute to global warming relative to carbon dioxide. Based on a 100-year timeframe, methane’s GWP is 21 (80 based on a 20-year timeframe), and nitrous oxide’s is 310.