Financing initiative to release billions to curb methane leaks

LONDON: A global group of about 50 organisations, including the Climate Bonds Initiative (CBI) and the International Energy Agency, is working on new guidelines that could enable oil and gas producers seeking to reduce their methane emissions to access transition finance.

According to CBI Executive Director Sean Kidney, the organizations intend to publish financing recommendations at the annual United Nations climate conference COP29 in November and hope to present two demonstration agreements.

The nonprofit that assesses sustainable debt would then certify methane reduction projects that meet the criteria.

The aim of these efforts is to provide a critical source of financing for reducing methane emissions from the oil and gas industry, particularly for state-owned operators in emerging markets.

Fossil fuels are responsible for about 35 percent of the methane produced by human activities, but received less than 1 percent of the average $13.7 billion spent on methane mitigation measures in 2021 and 2022, according to the Climate Policy Initiative.

Transition bonds are among the fastest-growing subsets of sustainable debt, especially in Asia, with issuance rising to $20 billion this year, more than four times the total for 2023, according to BloombergNEF. Fossil fuel companies and institutions typically sell transition bonds to finance emissions-cutting efforts. — Bloomberg