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About Commodity Insights
08 Nov 2023 | 11:15 UTC
By Analyst Cindy Liang and Eric Yep
Highlights
Plan issued after China-US climate talks, ahead of COP28 climate talks
Covers 14th and 15th Five-Year Plan period up to 2030
Includes plan to tackle emissions from oil, gas and coal extraction
China has issued an action plan to control methane emissions that establishes a broad framework for measurement and identifies selected industries for future implementation, according to a notice published on the website of the Ministry of Ecology and Environment late Nov. 7.
The plan, which was published on the last day of the China-US climate talks in California held between climate envoys Xie Zhenhua and John Kerry, over Nov. 4-7, could have major implications for the expansion of gas demand in China, which is one of the world's largest natural gas markets.
China's main targets under the plan are to gradually establish a system for its methane emissions policy, including existing technologies and other industry standards. The plan will improve basic capabilities such as methane emission statistics and accounting, monitoring and supervision, and work towards methane resource utilization as well as emissions control during the 14th Five-Year Plan period (2021-2025), according to the plan document posted on the ministry's website.
China aims to reduce methane emissions from the agriculture and livestock industries, and better utilize energy sources like urban domestic waste while ensuring its non-hazardous disposal before 2025, the plan said.
During the 15th Five-Year Plan period (2026-2030), China will further improve the system and existing capabilities, increase the utilization level of coal mine gas, and further reduce methane emissions from the agriculture, livestock, and oil and gas mining industries, the plan added.
China plans to promote methane emissions control in the energy sector and strengthen the overall supply chain, control of venting of methane from oil and gas fields, as well as encourage oil and gas companies to recycle associated gas and vented gas based on local conditions.
The plan expects to encourage coal mining companies to increase the extraction and utilization of coal mine gas, with the annual utilization of the gas reaching 6 Bcm by 2025, and the gas collection rate of oilfield associated gas reaching an international level by 2030, the plan said.
China will actively participate in global methane governance and carry out exchanges and cooperation on global methane emission reduction issues, according to the plan.
While the plan lacks formal targets and deadlines, most of the country's national level policies are first drafted at the federal level as a broad framework, which can later be fine-tuned. Beijing's guidelines are also typically meant as a broad directive and the specifics of implementation are later defined by provinces and local departments.
China's methane plans have been one of the key items the country will be taking to COP28 as part of its updated commitments, along with a strong push for renewables capacity additions and demand for wider debate on issues like cross-border carbon taxes and transition finance.
Policies on methane emissions are closely linked to the natural gas and coal sectors, which are a significant source of this form of emissions from upstream processes where gas that cannot be captured is leaked into the atmosphere, and from the supply chain infrastructure like pipelines and storage terminals.
The Biden administration launched a plan to reduce methane emissions at the climate summit in Glasgow in 2021, pledging to work with other nations to cut global methane emissions by 30% by 2030.