There is growing awareness of the role of methane in global warming, with more than 100 signatories to a pledge to reduce emissions of the GHG. Methane, the main component of natural gas, has global warming potential around 85 times that of CO2 over a 20-year period.
The recent launch by Platts of methane performance certificate (MPC) price assessments now enables trading of lower-emission natural gas production in the US. Importantly, the certificates use dynamic sets of measured data monitored and audited by an independent third party, moving away from predecessor standards based on self-reported data.
MPCs are the beginning of a journey to reduce methane intensity along the entire value chain.
Broader standards for natural gas are also emerging in the US, encompassing not only methane but other ESG attributes. And amid growing interest among both consumers and end-users, several midstream operators announced recently that they would start dedicating physical pipeline capacity for certified gas.
Armed with more reliable and comprehensive information about the carbon footprint and methane emissions of specific crude and natural gas resources, market participants will be able to identify and use the lowest emitting assets.
A host of new standards and price indicators for sustainable and renewable fuels, voluntary carbon credits, and carbon-credit pricing and allowance assessments now exist, enabling the renewables and sustainable fuels markets to be monetized more easily.
Technologies like artificial intelligence and blockchain can help improve processes and speed of trading in commodity and energy markets.
