Joint AFREC-NP4SE Methane MMRV Programme

 

What’s changing

The 2024 EU Methane Regulation has set requirements for fossil fuel imports that will be implemented gradually from 2025 to 2027. These build on the Oil and Gas Methane Partnership 2.0 (OGMP) framework that supports a shift from methane estimates to direct ‘source-level’ measurements of methane emissions, reconciled against ‘site-level’ measurements across the value chain. Exporters will need to provide data on how they measured methane, then demonstrate equivalence in measurement standards, followed by reporting, and finally ensure that imports stay below the methane intensity thresholds. Significantly, rules are emerging in other importing jurisdictions, such as Japan and Korea (CLEAN initiative), that will align with EU regulation.

Consequently, any producer intending to export oil and gas to the EU, and gas to Japan and Korea will be required to prove that it has measured the methane intensity of its cargo and will face penalties if measurements rules are not followed. Currently, no oil producer has achieved the highest gold standard in MMRV (OGMP Level 5) that will be required from January 2027 and many national oil companies are between Levels 1-3. The New Producers for Sustainable Energy (NP4SE) and the African Energy Commission (AFREC) of the African Union are working together to help African oil and gas producers prepare for these new standards.

How we will tackle the problem

The first step will be to establish a credible emissions baseline because this will enable operators and regulators to quantify any gains in methane abatement or avoidance against a starting point. Measured gains enable access to external finance for the required investments. Second, the NP4SE and its partners will build the capacity of exporting country governments and national oil companies on the highest standard methods for measuring, monitoring, reporting and validating emissions and provide guidance on how to update regulations. This will help governments design the new rules that will require oil operators to measure, monitor, report and verify methane and CO2 emissions to the gold standard that will be required by importers. Higher capacity will also enable governments to enforce these rules and to engage credibly with importing countries to demonstrate they are adopting rules aligned with the new higher standards.

What are the risks of inaction?

• Low-income exporting countries allow oil companies to operate under a business-as-usual model
• Their oil and gas production will likely be/remain more polluting, with avoidable methane leakage
• Their exports will be subject to penalties that importing markets will collect (instead of exporting governments collecting these from their oil operators)
• They risk being shut out of markets, as cleaner oil and gas becomes available from developed exporting countries.

Goal of the programme

The objectives are to align methane emissions from the oil and gas sector in new producer countries with new international import regulations, and successfully replicate the programme in mature producers.

We are fundraising for this programme. The NP4SE and AFREC, together with key technical partners, can execute a fast-paced and targeted programme to get low-income gas exporters ready for the new rules that will enable them to produce at near-zero methane.

 

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