Cross-Industry Methane Challenges
Methane reductions will feature prominently at the 2023 UN Climate Change Conference (COP28) this fall. Policymakers and environmental organizations will be looking for concrete progress and financial commitments related to the Global Methane Pledge—a collective global agreement to cut methane emissions by 30 percent by 2030 from 2020 levels. Regulatory and policy efforts are mainly focusing on the oil and gas industry, which presents the most rapid, cost-effective abatement solutions. But cutting emissions from other anthropogenic sources such as agriculture and waste will be critical as well.
Methane emissions challenges vary across these industries. There is a strong economic case for natural gas producers to reduce their emissions since they can capture more volumes to sell. In contrast, methane abatement in agriculture and landfills imposes costs but creates few immediate commercial benefits. These are generally lower-margin industries than oil and gas, with a wider array of small stakeholders. For these reasons, the agriculture and waste sectors do not yet face the same intensity of investor, shareholder, and societal pressure for methane reductions as the oil and gas sector.
However, emerging regulations, market forces, and technological progress are enabling better measurement of oil and gas methane emissions, and these advancements will affect other industries. Satellite surveillance, for example, will soon put methane emissions data in the hands of many policymakers, companies, and environmental organizations. Institutions tasked with collecting and integrating methane data are beginning to increase their outreach to the agricultural and landfill industries. And with large food and beverage companies seeking to monitor and reduce greenhouse gas emissions associated with their supply chains, these demands will gradually filter downstream.
Scale and Sources of Methane Emissions
In the United States, the energy, agriculture, and waste industries are by far the largest sources of methane emissions. While methane emissions from natural gas and petroleum systems have dropped since 2017 and fallen substantially since 2005, according to U.S. Environmental Protection Agency (EPA) inventory data, the same is not true for most agriculture and waste segments. EPA inventory data are imperfect, of course. Some studies estimate that methane emissions across oil and natural gas supply chains may be up to 60 percent higher than EPA estimates. But the agency’s Greenhouse Gas Reporting Program provides a baseline for cross-industry comparisons.
Aside from the energy sector—including natural gas and petroleum systems as well as coal mining—agriculture is the largest methane-emitting sector. The EPA estimates that livestock agricultural methane accounts for 36 percent of total U.S. methane emissions and four percent of total greenhouse gas emissions. Enteric fermentation produces 70 percent of total methane emissions from agriculture, with manure management making up another 24 percent. Methane abatement in the meat and dairy industries tends to emphasize responsible management of livestock waste, including manure processing for fertilizer and compost or renewable natural gas production from anaerobic digesters. Many existing strategies to address enteric methane, however, are expensive and may be only modestly effective at reducing emissions. Among the proposed solutions are methane-mitigating feed supplements and vaccines. Genetic research and selective breeding of cows with lower methane emission rates could hold some longer-term promise as well.
Waste decomposition at landfills accounts for 17 percent of national methane emissions and 1.9 percent of total greenhouse gas emissions. Compared with the agricultural sector, waste methane abatement strategies may be more cost effective since the industry’s methane sources are more concentrated. One study suggests that 12 percent of potential methane mitigation in the waste sector can be achieved at no net cost. Three common methane abatement tools in solid waste are waste diversion or recycling, collection of landfill gas (LFG) and flaring, and LFG utilization systems. LFG recovery for direct use and for electricity generation could have the highest abatement potential and the lowest associated costs.
Policy Support and Corporate Drivers in Agriculture and Waste
Federal government support for agricultural methane reductions has typically focused on subsidies or tax incentives for biogas, feed additives, and alternative manure management practices. These approaches, however, tend to raise the cost of production per animal and rarely provide revenue for farmers, even with subsidies in place. More recent federal grants focus on technological innovation to improve methane management. In September 2022, the U.S. Department of Agriculture (USDA) announced $2.8 billion in new investments as part of its Partnerships for Climate-Smart Commodities, with $500 million allocated to projects supporting methane reduction. The Inflation Reduction Act also granted the USDA an additional $300 million to improve agricultural emissions quantification. Still, much more funding is required, especially in enteric methane emissions measurement.
Corporate climate commitments in the agriculture sector are gathering speed, including the livestock and dairy industries. As of September 2022, 32 of the largest 50 U.S. and European meat and dairy companies had set greenhouse gas emissions reduction targets, and at least 13 have net-zero targets. Shareholder demands, as well as environmental, social, and governance (ESG) mandates for investors in the industry, will encourage more robust emissions reduction plans.
The waste industry has also been attracting more regulatory attention and federal funding. In 2016, new EPA performance standards reduced the threshold requirements for landfills to capture LFG from 50 metric tons of non-methane organic compounds per year to 34 metric tons. The rule was applicable to municipal solid waste landfills built, modified, or reconstructed after July 2014. The EPA performance standard also allowed for new approved uses of LFG and increased emissions monitoring requirements. The EPA’s Landfill Methane Outreach Program aspires to a 70 percent methane emissions capture rate at all U.S. landfill sites. Although the program is voluntary, it has assisted more than 700 LFG projects since its inception. Another priority is to address food loss and waste. The USDA, EPA, and the U.S. Food and Drug Administration are collaborating to cut food loss and waste by 50 percent by 2030 and the USDA is investing up to $90 million in food loss and waste reduction. The Infrastructure Investment and Jobs Act provides the EPA with $275 million for grant programs to improve solid waste management infrastructure and recycling.
As in agriculture, investor engagement on methane mitigation in the waste industry is increasing. A recent engagement brief for investors in the food and beverage industry includes considerations for methane mitigation, mainly concentrating on food waste but touching on waste-to-energy projects. Other groups have published recommendations on wastewater treatment and suggested reporting guidelines for the waste industry to bolster management approaches and disclosure guidelines.
Benefits of Cross-Industry Learning
Methane challenges vary in each sector, but oil and gas companies are generally farther along in the methane journey, and more cross-industry collaboration with agriculture and waste industry stakeholders could be helpful. This could take several forms. Technical exchanges on fast-developing methane detection technology and quantification could hasten the operational changes that will cut methane emissions. The voluntary industry initiatives and certification programs that have proliferated in oil and gas may be relevant for companies in other sectors seeking to cut emissions and differentiate their operations. The massive methane data collection process that is picking up steam in the oil and gas industry is creating systems and architecture that should accommodate new data from agriculture and waste. Collaborations between academia and industry to interpret greenhouse gas emissions data could be replicated for these other industries.
Methane abatement is a global challenge, and one that is hardly exclusive to the oil and gas sector. Breaking down silos and sharing lessons learned between industries could help policymakers, investors, and architects of international climate accords to reach shared goals.
Ben Cahill is a senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C. Kjersti Swanson is an intern with the Energy Security and Climate Change Program.