油气行业甲烷减排债务融资指引 Guidance for Including Methane Abatement in Oil and Gas Debt Structuring 202506

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring

AProductoftheMethaneFinanceWorkingGroup

JUNE2025

Tableof

Contents

Introduction

IntroductiontotheGuidance

4

Guidance:Use-of-ProceedsInstruments

GuidanceforIncludingMethaneandFlaringAbatementinUse-of-ProceedsInstruments

22

Guidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneandFlaringAbatementinKPI-LinkedInstruments

44

Clickbuttonsandunderlinedtexttonavigatetoyourchosendestination.

ANotetotheReader

Thethreemainpartsofthisdocument—theIntroduction,the

UseofProceedsGuidance,

andthe

KPI-LinkedInstruments

Guidance

—aredesignedtobereadasrelatedbutself-

containedsections.Toensureeachpartcanbeunderstoodindependently,keybackgroundinformation,acronym

definitions,andnumberingrestartaccordingly.

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring2

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring3

Acknowledgements

ThedevelopmentandrefinementofthisGuidancewouldnothavebeenpossiblewithouttheinsightfulcontributionsofthefollowingreviewers:

Allianz

Amundi

BlaylockVan

BofASecuritiesCalPERS

CalSTRS

CarbonLimits

Ceres

ColumbiaUniversity’sCenteronGlobalEnergyPolicy

CleanAirTaskForce

ClimateBondsInitiative

EnvironmentalDefenseFundFIÙTUR

GlobalFlaringandMethane

ReductionPartnership

InternationalEnergyAgency

InstitutionalInvestorsGrouponClimateChange

IOGP

IslamicDevelopmentBankLoanMarketAssociation

McKinsey†

MiQ

Moody’sRatings

NewYorkStateTeachers’RetirementSystem

OGCI

OGDCPectenPGIM

PIMCORMI

SLB

SOCAR

StandardCharteredBank

†Asaknowledgepartner

“Reviewer”indicatesparticipationinworkinggroupdiscussionsanddraftreviews,andnotanendorsementofanyparticulardeliverable.

ividl

BOLD

DocumentdesignedandproducedbytheteamatVividlyBold

Guidance:KPI-LinkedInstruments

Introduction

Guidance:Use-of-ProceedsInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring4

AnIntroductiontotheGuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring

1.

ExecutiveSummary

2.

TheCaseforUsingtheDebtCapitalMarketstoFacilitateMethaneAbatement

3.

TheOpportunitiesandChallengesforDebtCapitalMarkets

4.

GuidanceforIncludingMethaneAbatementActivitiesinOilandGasDebtStructuring

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring5

1

EXECUTIVESUMMARY

COP28producedaseachangeintheoilandgasindustry’scommitmentstotheglobaleforttoreducemethaneand

laringemissions.Fiftycompaniesresponsiblefor40%ofglobaloilproductionjoinedtheOilandGasDecarbonization

Charter(OGDC),committingtovirtuallyeliminatemethaneandlaringpollution.Amongthecompanieswere29NationalOilCompanies(NOCs),asegmentoftheindustrythatproducesmorethanhalftheworld’soilandgasand,untilOGDC,hadbeenlargelyabsentfromindustryemissionreductioninitiatives.Sincethe28thConferenceoftheParties(COP28),

OGDChasgrowntoinclude56companiesandstandstobeapotentiallypowerfuldriveroffutureindustry-ledeforts.

AtCOP28,theWorldBankalsointroducedtheGlobalFlaringandMethaneReductionPartnership’sTrustFund(GFMR),designedspecificallytohelpNOCsaccesstechnicalexpertisetobuildinternalcapacityandseedfundingformethaneandlaringabatementprojects.

Giventhesedevelopments,theMethaneFinanceWorkingGroup(theWorkingGroup)wasformedtoassesshow

ACentralRoleforNOCs

debtcapitalmarketscouldadaptexistingfinancing

structurestodeploycapitaltowardemissionreduction

WhiletheGuidanceisdesignedto

accommodatearangeofcapitalseekers,

itisparticularlyapplicabletoNationalOil

Companies(NOCs).Asthebackboneofthe

globaloilandgasindustry,NOCscontrolmorethanhalfoftheworld’sreserves,production,

andmethaneemissions.

strategiesacrossoilandgascompanyoperations.The

GuidanceforIncludingMethaneAbatementinOiland

GasDebtStructuring(theGuidance)isaconsolidation

oftheWorkingGroup’sfindingsandrecommendations,

suggestingapathforfinancialfirmsandoilandgas

companiestocreatecredible,practical,andmutually

beneficialarrangementsthatprioritizemethaneandlaringreductionprojects.

MostNOCsarecriticaltotheirnational

economies,andpreventingunnecessary

productlossthroughmethaneabatement

ofersadirectpathforNOCstostrengthen

globalcompetitiveadvantage,improve

operationalsafety,andenhancestewardshipofnationalresources.Yetmanyface

challengesinaccessingcapitalmarketsfor

emissionmitigation.1Additionally,manyNOCsarelocatedinemergingandfrontiermarkets

thataredisproportionatelyafectedbyclimatechange.Mitigatingfurtherwarmingpresents

anopportunityforthesecompaniesandtheirhostcountriestoavoidsignificantlosses.2

1Conway,CuttingThroughtheNoise:LooktoMarketForcesforMethane

Momentum(Boulder:RMI,2025),

/cutting-through-the-noise-

look-to-market-forces-for-methane-momentum/.

2Fujeetal.,FiscalImpactsofClimateDisastersinEmergingMarketsand

DevelopingEconomies(Washington,D.C.:InternationalMonetaryFund,2023),

/en/Publications/WP/Issues/2023/12/15/Fiscal-Impacts-of-

Climate-Disasters-in-Emerging-Markets-and-Developing-Economies-542408

.

TheGuidanceaimstofacilitatetherapiddeployment

ofcapitalatscaleformethaneandlaringemissions

reductionsbycreatinganecosystemwherecapital

seekers,capitalproviders,andstructuringagentscan

confidentlyengageintransactionsthatfulfillfiduciary

responsibilities,alignwithscientificconsensus,andareoperationallyachievable.

TheGuidancedrawsoninputfromtheWorkingGroup,a

multi-stakeholdergroupcomposedoffinancialinstitutions,oilandgascompanies,civilsocietyorganizations,

academics,andclimatescienceexperts.Thisgroup

discussestheopportunitiesandchallengesofprioritizingandscalingmethaneandlaringemissionsabatement

globally.WhiletheGuidanceisapplicableformanytypesofoilandgasproducers,itmaybeparticularlyhelpful

forNOCsandcertainindependentproducersthatfaceeconomicandoperationalchallengesdistinctfrom

InternationalOilCompanies(IOCs).

Guidance:KPI-LinkedInstruments

Introduction

Guidance:Use-of-ProceedsInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring6

WHYDIDTHISWORKINGGROUPCOMETOGETHER?

Technologyforabatingmethaneandlaringemissionshasbecomeincreasinglyavailableandcost-efective.Deployingknownsolutionsacrosssectorscouldcuttheamountofmethanefromhumansourcesinhalfby2030,avoiding0.25°Cbymidcentury,andmorethan0.5°Cby2100.Around80%oftheno-costactionstoaddressmethaneinthisscenario

wouldcomefromtheoilandgasindustry.3Noothersectorcouldcutemissionsthismuchsolelybyaddressingits

ownoperationalineficiencies.McKinseyestimatesthatiftheoilandgassectorweretomeetitsexistingreductioncommitmentsundertheOGDCanddeliveronallnetpresentvaluereductionopportunities,itwouldrepresenta4%reductioninglobalgreenhousegas(GHG)emissions.4

Figure1:GlobalOilandGasMarginalAbatementCostCurves,by2030

Thepotentialforupstreamoilandgasemissionabatementisupto50percentif2030

commintmentsaremetandnoncommittedplayersimplementsolutions.

Globaloilandgasmarginalabatementcostcurves,by2030

Abatement,$pertonofCO2equivalent

500

400

300

200

100

0

-100

-200

-300

-15%

under2030

commitments

M

-35%

additionalabatement

fromimplementingnet-

present-value-neutral

andlow-costleversby

noncommittedplayers

00.51.01.52.02.53.03.54.0

Upstreamoilandgasemissions,gigatonsofCO2equivalentperyear

EnergyEficiencyMethaneReduction●FlaringReductionCCUS1Eletrification

1Carboncapture,utilization,andstorage.

Source:McKinseyEnergySolutions:AssetDecarbonizationMcKinsey&Company

●SwitchtoLow-CarbonFuelAbatementpotential-50%

EmissionsdificulttoabateincludingmethaneandnonroutineflaringemissionsandCCUSeficiencylosses10%

MethaneEmissions:APowerfulShort-TermClimateImpact

Over20years,methaneis80timesaspowerfulascarbondioxideattrappingheat.Asaresult,itis

responsibleforover30%ofhuman-causedwarmingandiscriticaltoreducingtheimpactsofclimate

change.5TheIntergovernmentalPanelonClimateChange(IPCC)hasstatedthatthereisnoplausiblepathwaytolimittemperatureriseto1.5°Cwithoutdeepreductionsinmethaneemissionsaswellascarbondioxide.6

3IlissaB.Ockoetal.,Actingrapidlytodeployreadilyavailablemethanemitigationmeasuresbysectorcanimmediatelyslowglobalwarming(Bristol:IOPPublishing,2021),

/

article/10.1088/1748-9326/abf9c8

.

4GustawSzareketal.,Thetruecostofmethaneabatement:acrucialstepinoilandgasdecarbonization(NewYork:McKinsey&Company,2024),

/~/media/mckinsey/

industries/oil%20and%20gas/our%20insights/the%20true%20cost%20of%20methane%20abatement%20a%20crucial%20step%20in%20oil%20and%20gas%20decarbonization/the-true-cost-of-

methane-abatement-a-crucial-step-in-oil-and-gas-decarbonization.pdf?shouldIndex=false.

5IntergovernmentalPanelonClimateChange.,ClimateChange2021:ThePhysicalScienceBasis.ContributionofWorkingGroupItotheSixthAssessmentReportoftheIntergovernmentalPanelonClimateChange,2021.

https://www.ipcc.ch/report/ar6/wg1

.

6IntergovernmentalPanelonClimateChange.,“SummaryforPolicymakers,”inGlobalWarmingof1.5°C.AnIPCCSpecialReportontheimpactsofglobalwarmingof1.5°Cabovepre-industriallevelsandrelatedglobalgreenhousegasemissionpathways,inthecontextofstrengtheningtheglobalresponsetothethreatofclimatechange,sustainabledevelopment,andefortstoeradicatepoverty(Geneva:WorldMeteorologicalOrganization,2018),

https://www.ipcc.ch/sr15/chapter/spm/

.

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring7

Inalmostallscenarios,naturalgasdemandisprojected

toeitherpersistor,often,increaseoverthenextfivetoten

years.7However,S&PGlobalestimatesthatmorethan70%of112billioncubicmeters(bcm)ofpotentialnaturalgassupplyduetolostmethaneandlarednaturalgascouldbecapturedwithapositivenetpresentvalue(NPV),helpingtoreduce

emissionsandofsettheneedforadditionalsupplywithoutnewdrilling.8

TheInternationalEnergyAgency(IEA)’sNetZeroEmissions

(NZE)scenariorecommendsa75%reductioninmethane

emissionsfromtheoilandgassectorby2030asonekeylevertopreventthemostcostlyanddangerousclimateimpacts.

RemainingalignedwiththeNZErequiresrapidreductions

inbothmethaneandcarbondioxideemissions.However,

methaneemissionsfromtheenergysectorremainedatrecordhighsin2023,driveninlargepartbytheoilandgasindustry.9

Figure2:ProjectedGlobalGasDemandScenariosto2040

bcm

6000

5000

4000

3000

2000

1000

0

2010202020302040

NetZero●AnnouncedPledgesStatedPolicies●HigherGrowthCase●Historical

Methaneregulationsandemergingpoliciesseekingtomeasureandlimitemissionsacrossthevaluechainareonthe

riseinkeyimportmarkets.Yetdespitefavorableeconomicsandemergingpolicysupport,theindustryhasdeployedfarlesscapitalformethaneabatementthanisrequiredtoachievereductionsneededby2030.Tocapturepossibleclimategains,newstrategiesareneededtodrivefasterandsteeperemissionsreductions.Therefore,climate-alignedfinancial

intermediariesandtheirstakeholdersshouldconsiderapplyingmarket-testedfinancemechanismsthathavebeenusedbyothersectorsforoveradecadetodrivedecarbonization.

TheWorkingGroupwasformedtoaddressthesechallenges,focusingonhowcertaindebtcapitalmarketmechanismsmaysupporttheirdecarbonizationeforts.Bydevelopingguidancebasedonclimatescience,currentmarketpractices,andarigorousunderstandingofmethanereductiontechnologies,theWorkingGroupaimstooferrecommendations

thatarebothcredibleandpracticalformarketparticipants.

Ultimately,itisatthecapitalprovider’sdiscretiontodecideifanabatementprogramorprojectisambitious

enoughrelativetoitspoliciesandalignedwithitsfiduciaryduty.TheGuidanceisoferedasaroadmaptohelpcapitalseekersclearlyconveytheirambitionandimpacttoallstakeholders.

7InternationalEnergyAgency.WorldEnergyOutlook2024.Paris:IEA,2024.

/reports/world-energy-outlook-2024

.

8S&PGlobal,Leversforcapturinglaredgasandmethaneemissions(NewYork:S&PGlobal,2022),

/www/pdf/1222/EDFExecutive-SummaryLevers-for-capturing-lared

-gas-and-methane-emissions.pdf.

9InternationalEnergyAgency,UnitedNationsEnvironmentProgramme,andEnvironmentalDefenseFund,TurningPledgesintoProgress:AnAccountabilityFrameworkforReducingEmissionsfromtheOilandGasIndustry.

/AssetLink/803l8k237h22hmv1r720s23tf5514636.pdf

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring8

WHYSHOULDMARKETPARTICIPANTSCONSIDERUSINGTHISGUIDANCE?

Thereisapowerfulnear-term

opportunitytodrivechangeinhow

methaneandflaringemissionsare

addressedacrossasubstantialportionoftheoilandgasindustry.

Almosttwo-thirdsofoilandgascompanydebtwillmatureinthenextfiveyears,

whichmeansmanycompanieswillbe

approachingthedebtmarketanewbefore2030.Thiscreatesatimelyopportunityforfinancialintermediariestoencouragetheprioritizationofspendingonabatement

byattachingconditionsrelatedtonewdebtobligationsandtherefinancingofcurrentobligations(seeFigure3).

Figure3:MaturityProfileofOutstandingDebtofOilandGasCompanies10

1000

800

600

400

200

0

1Year2.5Year>5Year

IntegratedOil&GasE&PPipelinesRefining&Marketing●Equipment&ServicesNote:Ofthe$3.2trillionoutstandingdebtoftheoilandgassector,maturitybreakdownisavailablefor$2.3trillion,whichisshowninthisfigure

TheIEAestimatesthat$175billionininvestmentswillberequiredby2030todeploymethaneabatementmeasuresinlinewiththeNZE,withjustover$100billionneededtomonitorandplugabandonedwellswithsignificantlevelsofemissions.11McKinseyestimatesthisnumberis$200billion,ofwhich$120billionwouldbeforupstreaminfrastructuretobring

recoveredmethanetothenearestgasdemandcenters.12Theseestimatestranslatetoaround$30billion–$40billioninannualcapitaldeploymentinthesector,orlessthan1%ofthenetincomereceivedbytheoilandgasindustryin2022.13

ThisGuidancealsohelpscapitalseekersprepareforevolvinggasimportmarketrequirements.TheEuropeanUnion(EU)

leadsinrequiringemissionsintensitydatafortradedoilandnaturalgas,withotherregionspotentiallyfollowing.In2023,

JapanandSouthKorealaunchedtheCoalitionforLiquefiedNaturalGas(LNG)EmissionsAbatementtowardNet-zero

(CLEAN),ledbymajorLNGbuyersJERAandKogasandtheirrespectivegovernmentministries.CLEANfocusesoncollectingdatafromgassuppliersregardingtheirmonitoring,reporting,andverification(MRV)practicesandmethanereductionplans.ThefirstCLEANannualreportwasreleasedinOctober2024,withover20companiesparticipatingrepresentingover90%

ofKoreanandJapaneseimports.AstheEUrampsupregulation,CLEANofersJapanandKoreaaplatformtocoordinateregionalefortsandprepareforfuturemandatorypolicies.This,inturn,encouragesglobalgassupplierstodiscloseandimprovetheirupstreamproductionemissionstomeetrisingexpectationsfromtheEUandNortheastAsianmarkets.14

TheGuidanceprovidesaroadmapforcapitalseekersacrosstheoilandgasvaluechaintodriverapid,meaningfulmethaneandlaringemissionsreductionsfromtheirassetsinatransparentandverifiablemanner.Followingthisroadmapallows

themtoimproveassetquality,supportlong-termcompetitivenessbyaligningwithcriticalcustomerbases,andpositively

contributetodecarbonization.Tobemostefective,methaneandlaringabatementefortsshouldbeintegratedwithina

company’sbroaderdecarbonizationand/ortransitionstrategytoensureconsistencywithlong-termdecarbonizationgoals.

10CenteronGlobalEnergyPolicy,ARoadmaptoCatalyzeMethaneAbatementintheOilandGasSectorUsingDebtFinancing(NewYork:ColumbiaUniversity,2025),basedondatafromBloombergL.P.,accessedJune2025.

11InternationalEnergyAgency,Overcomingbarrierstoabatement,inGlobalMethaneTracker2025(Paris:IEA,2025),

/reports/global-methane-tracker-2025/overcoming-barriers-to-

abatement

.

12GustawSzareketal.,Thetruecostofmethaneabatement.

13DatafromtheBloombergTerminal,accessedJune2025.

14Book,Kevin,BenCahill,KyleDanish,CarrieJenks,andBobStout.WillTrumpMendorEndFederalMethaneRules?Whitepaper.CenterforEnergyandEnvironmentalSystemsAnalysis,UniversityofTexasatAustin.

/static/66f440245e8cad0f685673ec/t/6792b95bba2c704e76780b96/1737668958638/Jan+2025+White+Paper_FINAL_V3.pdf

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring9

WHICHMARKETPARTICIPANTSDOESTHISGUIDANCETARGET?

ThisvoluntaryGuidanceisforcapitalseekersandcapitalproviderstostructuredebtfinancetransactionsthatprioritizethequickdeploymentofcapitaltoreducemethaneandflaringemissions.

TheGuidancehasbeendesignedtoaccommodatetheheterogeneityofthesector,takingthevariedgovernance,capitalstructures,andtechnicalcapacityofcapitalseekersandtheircounterpartiesintoaccount.While

theGuidancehasaparticularfocusonindependentproducersandNOCsinemergingandfrontiermarkets,

giventheirfinancingneedsandbarrierstoentry,itsprinciplesarebroadlyapplicable.Itcanbeusedtoassistemissionreductionefortsacrosstheentireoilandgasvaluechain,including:

•Well-capitalizedNOCsandIOCs•Incorporatedjointventures(JVs),operating

•Oilfieldserviceproviderscompanies(OpCos)andspecialpurposevehicles(SPVs)

•Midstreamoperators•Independentproducers

TheGuidanceisalsorelevantforfinancialintermediaries,suchasoilandgasinvestors,financialassetmanagers,financialassetowners,andmultilateraldevelopmentinstitutions.

WHATISINCLUDEDINTHEGUIDANCE?

TheGuidancesupportstheinclusionofmethaneandflaringabatementactivitiesthroughtheuseofproceeds(UoP)andkeyperformanceindicator(KPI)-linkedbondandloanstructures.Giventhescaleandmarket

familiarityoftheseinstruments,primarilythroughtheGreen,Sustainability,Social,andSustainability-linked(GSSS)bondmarket,thetechnicalrecommendationshavebeendesignedtointegratewithprevailingindustryandregulatorystandards.

Withtheongoingevolutionofnamingconventions,suchastheSustainableDevelopmentGoal(SDG)Bonds

andTransitionBonds,thisGuidancetakesanagnostic

approachtonamingconventions.Ratherthanfocusing

onlabels,itprioritizesaligningfinancialinstrumentswiththeoverarchingprinciplessetforthbytheInternational

CapitalMarketsAssociation15(ICMA)intheircapacityastheSecretariatfortheGreenBondPrinciples(GBP)andSustainabilityBondGuidelines(SBG).16

Theframeworkfocusesonshort-tomid-term

emissionsreductionsrequiredby2030butalsooutlinesconsiderationsforlonger-datedprojectsandmaturitiestoallowlexibilityforbothcapitalseekersandcapital

providers.WhileitprimarilyalignswithICMAGSSS

bondguidance,therecommendationsarealsobroadlyapplicabletoprivatecredit,projectfinance,andloans.

Anoteonterminology:Forthepurposesofbrevity,

thisdocumentreferstobothborrowersandissuersas

“capitalseekers.”Whilethediferencesbetweenbonds

(andtheircouponpayments)andloans(andtheirinterestpayments)arecriticalfactorsinstructuringspecific

transactions,thisguidanceismeanttobeillustrativeand,therefore,usestheseconceptsinterchangeably.

FeedbackiswelcomeonhowtheGuidanceshouldmorespecificallyaddressloansinsubsequentiterations.

Stakeholdersinterestedinleveragingthisguidanceformethaneandlaringabatementinloaninstruments

mayconsiderreferencingtherecentlyupdatedGreen

LoanPrinciples(GLP)andSustainability-LinkedLoan

Principles(SLLP),alongwiththeirsupportingguidance,whicharejointlydevelopedandpublishedbytheLSTA,theLoanMarketAssociation(LMA),andtheAsiaPacificLoanMarketAssociation(APLMA).

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring10

WHYISSPECIFICGUIDANCENEEDEDFORMETHANEINTHEOILANDGASSECTOR?

DespitetheGSSSbondmarket’ssuccessinfacilitatingtransactionsacrosssectors,theoilandgassectorhasbeenchallengedinaccessingthismarketinawaythatisviewedbystakeholdersascredibleandambitious.

Toaddressthis,theGuidanceisstructuredtomitigate

actualandperceivedgreenwashingrisks(discussed

furtherin

Section3

)throughbestpracticesandguardrails.

Bydeliveringrecommendationsforaccountability,the

WorkingGroupaimstofosteranecosystemthatenablesthedeploymentofcapitalatscaletosignificantlyreducemethaneandlaringemissionsintherealeconomy.TheGuidance’srobusttechnicalstandardsandoperating

proceduresarefoundedonthebestavailableclimate

science,industrystandards,andregulatoryframeworks,incorporatingthereal-worldexperienceofabatement

practitioners.Thisdevelopmentprocesswascenteredoninputfromclimatescientistsandtechnicalexperts,whilethebroaderperspectivesofthinktanks,non-profitadvocacygroups,multilateraldevelopmentbanks,andenergymarketmodelerswereessentialtodesigning

credibleguardrailsagainstgreenwashing.

TheGuidanceprovidesaroadmapforcapitalseekersacrosstheoilandgasvaluechaintodriverapid,meaningfulmethaneandlaringemissions

reductionsfromtheirassetsina

transparentandverifiablemanner.

15InternationalCapitalMarketAssociation,SustainableFinance(Zurich:ICMA,2025),

/sustainable-finance/

.

16InternationalCapitalMarketAssociation,GreenBondPrinciples,(Zurich:ICMA,2024),

/sustainable-finance/the-principles-guidelines-and-handbooks/green-bond-

principles-gbp/

.

IntroductionGuidance:Use-of-ProceedsInstrumentsGuidance:KPI-LinkedInstruments

GuidanceforIncludingMethaneAbatementinOilandGasDebtStructuring11

2

THECASEFORUSINGTHEDEBTCAPITALMARKETSTOFACILITATEMETHANEABATEMENT

2.1TheNZEremainstheprimaryreferencescenarioforglobalinvestorsfocusedon

reducingtheclimatewarmingimpactsoftheirportfolios.Aimingforanetzero

economyhasbeencitedasanimperativebyglobalinvestors,financialinstitutions,companies,andsovereigngovernments.

Figure4:GlobalRenewablePowerCapacity,PrimaryEnergyIntensityImprovements,andEnergySectorMethaneEmissionsintheNZEScenario

12000

10000

8000

GW

6000

4000

2000

0

Renewables

20222030

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

EnergyEfficiencyImprovements

20222030

140

120

100

80

60

40

20

0

MethaneEmissionReduction

20222030

Manycompaniesacrossfinanceandoilandgashavesetnetzeroemissionsby2050targets.TheIEANZEprovidesguidancetoachievenetzerogreenhousegasemissionsby2050inlinewiththegoalssetbytheParisAgreement,whichaimstolimitglobalwarmingto1.5°Cabovepre-industriallevels.

Tostayonthispathway,theIEAlistsseveralactionsthatmustbetakenby2030fortheglobalenergysectortoachievenetzeroemissionsby2050.Centralamongthemisa75%reductioninmethaneemissionsfromtheoilandgassector.TheIEAconsidersthislevelofmethanereductiontobeasvitalastriplingrenewables-basedelectric