The IEA’s Net Zero Emissions by 2050 (NZE) Scenario limits the global average surface temperature rise to 1.5 °C with no or low overshoot while achieving universal access to modern energy by 2030. This scenario relies on a huge scaling up of clean energy to drive down fossil fuel use and emissions while ensuring uninterrupted access to energy services.

The scale up in clean energy technologies cuts oil and natural gas demand by around 20% to 2030 and coal use by around 45%, with further declines out to 2050. These reductions in fossil fuel use to 2030 would cut methane emissions in aggregate by around 30%. However, this decline is not big enough to limit warming to 1.5 °C. The NZE Scenario therefore includes additional, targeted actions to tackle methane emissions that would lead to even larger reductions. In total, methane emissions from fossil fuel production and use are cut by around 75% from today’s levels by 2030.

In the NZE Scenario, all fossil fuel producers achieve near zero methane emissions intensity by 2030. Operations with high emissions intensities where methane abatement measures cannot be systematically deployed, such as marginal oil and gas wells with emissions-prone equipment, are decommissioned. There is a greater reduction in coal supply from surface mines that produce steam coal – where there are fewer opportunities to deploy abatement technologies – than from underground coal mines that produce coking coal.

In the oil and gas sector, around 40 Mt of methane reductions come from the deployment of abatement solutions. Just over 10 Mt of methane is avoided by replacing pumps, controllers, compressors and other equipment with low- or zero-emissions alternatives, such as instrument air systems and electric pumps. Another 10 Mt is avoided through regular or continuous leak detection and repair (LDAR) programmes that ensure fugitive leaks are addressed rapidly and prevent large emissions events by identifying malfunctioning parts or processes before they fail. A further 10 Mt is avoided using vapour recovery units and related systems, which direct waste flows of methane and vents to productive uses, enabling the end of routine venting and flaring. The remainder is avoided through additional processes and measures such as blowdown capture, reduced emissions completion and improved combustion systems.

In coal mines, mitigation measures reduce emissions by around 10 Mt. Abatement of ventilation air methane helps to cut 5 Mt through on-site recovery, the use of this methane to provide heat to mine facilities, or destroying the methane through thermal oxidation. Degasification wells and drainage boreholes help capture methane from coal deposits, reducing close to 5 Mt of emissions during production. There are some smaller reductions from efficiency improvements, such as maintaining a high combustion efficiency at gas engines and related equipment through process control systems, and from measures to capture fugitive emissions and route them to abatement systems.

In the Net Zero Emissions by 2050 Scenario, the global average methane intensity of oil and natural gas supply falls from around 1.3% in 2023 to 0.4% in 2030. After 2030, further technological and operational improvements help to nearly eliminate all non-emergency methane emissions by 2040 and continuous monitoring systems ensure large leaks are prevented and minor ones quickly addressed. As a result, the global average methane intensity of oil and natural gas supply falls to 0.2% in 2040 and 0.1% in 2050.

These improvements depend on rapid action to address known sources of methane such as flaring and venting; work to uncover unknown sources, including fugitives (i.e. leaks); and the development of comprehensive management plans. These plans involve action to properly close or substitute high-emissions assets, measures to monitor emissions and avoid leaks, use of no- or low-emissions equipment, and the electrification of facilities.

No technological breakthroughs are required to achieve the 75% cut in methane emissions from oil and gas operations to 2030. All technologies and measures are well known and have been deployed in multiple locations around the world. The sustained, low methane emissions intensity seen in major oil and gas producers for many years – for example, in Norway and the Netherlands – demonstrates what is already achievable. Further, many abatement measures can save money because the outlays required to deploy them are less than the market value of the methane that is captured and can be sold.

We estimate that around 40% of methane emissions from fossil fuel operations could have been avoided at no net cost in 2023, based on 2023 energy prices. This share is smaller than in 2022, when gas prices were much higher around the world and when 80% of the options to reduce methane emissions in the oil and gas sector could have been deployed at no net cost. Still, over 45 Mt of emissions could have been reduced in 2023 while generating savings for countries and companies. A key question is therefore why these measures were not deployed.

There is no single explanation for the failure to act; the reasons vary from country to country and company to company. Possible causes include a lack of awareness about the scale of the problem or the solutions available; the absence of regulations and policies compelling companies to act; the variety of investment opportunities available to companies, with leadership perceiving the payback period for abatement measures as too long (our analysis of the costs of methane mitigation measures assumes an 8% rate of return); the risk of split incentives, where the owner of the equipment does not directly benefit from reducing leaks, or the owner of the gas does not see its full value; the difficulty in deploying sufficient staff or obtaining the services needed to tackle the problem; the lack of pathways or businesses to bring captured gas to productive use; or that the wellhead gas or energy price used in our analysis does not reflect what operators believe they would receive.

Reducing methane leaks from the energy sector remains one of the most readily implementable and cost-effective measures available in any sector of the economy to reduce greenhouse gas (GHG) emissions. For example, even if the avoided methane were to have no value at all, we estimate that nearly all methane abatement options could be deployed at a GHG price of less than USD 20 per tonne of CO₂-eq.

We estimate that around USD 170 billion in spending is needed to deliver the methane abatement measures deployed by the fossil fuel industry in the NZE Scenario. This includes just over USD 100 billion spending in the oil and gas sector and USD 70 billion in the coal industry. These costs include roughly USD 135 billion in capital expenditures and USD 35 billion in operational expenditures to 2030; most of the operational costs are associated with LDAR programmes at oil and gas operations and coal mine degasification systems.

There have been some efforts in the past to increase financing for methane abatement. These include international emissions pricing schemes, regional emissions trading markets, sustainability-linked financing, and direct public funding. Recent initiatives aim to implement new mechanisms, such as emissions standards for market access or price premiums for low-emissions fuels.

Nonetheless, financing for methane abatement in the fossil fuel industry has been very limited to date. A group of committed actors is looking to change that through targeted initiatives such as the World Bank’s Global Methane and Flaring Reduction Fund, which holds USD 255 million, and JPMorgan Chase’s offer of support for accelerated efforts to reduce methane emissions and flaring in their engagement with the oil and gas sector.

Investors and insurers are also starting to establish methane performance requirements as a condition for future lending. This includes requests for improved disclosures to promote transparency on emissions reporting and underwriting standards that include methane reductions. For example, Chubb’s insurance coverage is now contingent on clients adopting evidence-based plans to reduce methane emissions, while Barclays announced that starting from 2026, energy clients will be required to have 2030 methane emissions reduction targets and a commitment to end all routine venting and flaring by 2030.

Private sources of finance can provide capital where internal financing options are limited. These can be paired with public financing, either directly from governments or through multilateral development banks, to help catalyse private investments and fill gaps where private sources of finance may not be willing or able to invest at the levels needed.

Fossil fuel companies carry primary responsibility for financing abatement measures. However, in the oil and gas sector, we estimate that about USD 30 billion needs particular attention to ensure that adequate sources of finance are available. This includes the spending required to cut emissions in low- and middle-income countries, especially those without strong methane reduction policies and regulations, as well as spending at facilities owned and operated by smaller companies and on measures that do not generate meaningful return over their lifetimes.